Document:

Exhibit
4.6

 

 

 

CHASE MERGER SUB, INC.

and

(following the merger of Chase Merger Sub, Inc.

with and into RBS Global, Inc.)

RBS GLOBAL, INC.

and

REXNORD CORPORATION,

as Issuers,

and the
Guarantors named herein

     113⁄4% Senior Subordinated Notes due 2016

INDENTURE

Dated
as of July 21, 2006

WELLS
FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

 

 

 

TABLE OF CONTENTS

	
   

  	
   

  	
  Page

  
	
  ARTICLE 1

  	
   

  	
   

  
	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  	
   

  
	
  SECTION 1.01. Definitions

  	
   

  	
  2

  
	
  SECTION 1.02. Other Definitions

  	
   

  	
  77

  
	
  SECTION 1.03. Incorporation by Reference of Trust Indenture
  Act

  	
   

  	
  80

  
	
  SECTION 1.04. Rules of Construction

  	
   

  	
  81

  
	
  ARTICLE 2

  	
   

  	
   

  
	
  THE SECURITIES

  	
   

  	
   

  
	
  SECTION 2.01. Amount of Securities

  	
   

  	
  83

  
	
  SECTION 2.02. Form and Dating

  	
   

  	
  85

  
	
  SECTION 2.03. Execution and Authentication

  	
   

  	
  86

  
	
  SECTION 2.04. Registrar and Paying Agent

  	
   

  	
  87

  
	
  SECTION 2.05. Paying Agent to Hold Money in Trust

  	
   

  	
  89

  
	
  SECTION 2.06. Holder Lists

  	
   

  	
  90

  
	
  SECTION 2.07. Transfer and Exchange

  	
   

  	
  90

  
	
  SECTION 2.08. Replacement Securities

  	
   

  	
  92

  
	
  SECTION 2.09. Outstanding Securities

  	
   

  	
  93

  
	
  SECTION 2.10. Temporary Securities

  	
   

  	
  94

  
	
  SECTION 2.11. Cancellation

  	
   

  	
  94

  
	
  SECTION 2.12. Defaulted Interest

  	
   

  	
  95

  
	
  SECTION 2.13. CUSIP Numbers, ISINs, etc.

  	
   

  	
  95

  
	
  SECTION 2.14. Calculation of Principal Amount of Securities

  	
   

  	
  96

  
	
  ARTICLE 3

  	
   

  	
   

  
	
  REDEMPTION

  	
   

  	
   

  
	
  SECTION 3.01. Redemption

  	
   

  	
  97

  
	
  SECTION 3.02. Applicability of Article

  	
   

  	
  97

  
	
  SECTION 3.03. Notices to Trustee

  	
   

  	
  97

  
	
  SECTION 3.04. Selection of Securities to Be Redeemed

  	
   

  	
  98

  
	
  SECTION 3.05. Notice of Optional Redemption

  	
   

  	
  98

  
	
  SECTION 3.06. Effect of Notice of Redemption

  	
   

  	
  100

  
	
  SECTION 3.07. Deposit of Redemption Price

  	
   

  	
  101

  
	
  SECTION 3.08. Securities Redeemed in Part

  	
   

  	
  101

  

 

i

 

	
  ARTICLE 4

  	
   

  	
   

  
	
  COVENANTS

  	
   

  	
   

  
	
  SECTION 4.01. Payment of Securities

  	
   

  	
  102

  
	
  SECTION 4.02. Reports and Other Information

  	
   

  	
  102

  
	
  SECTION 4.03. Limitation on Incurrence of
  Indebtedness and Issuance of Disqualified Stock and Preferred Stock

  	
   

  	
  106

  
	
  SECTION 4.04. Limitation on Restricted Payments

  	
   

  	
  120

  
	
  SECTION 4.05. Dividend and Other Payment Restrictions
  Affecting Subsidiaries

  	
   

  	
  133

  
	
  SECTION 4.06. Asset Sales

  	
   

  	
  137

  
	
  SECTION 4.07. Transactions with Affiliates

  	
   

  	
  144

  
	
  SECTION 4.08. Change of Control

  	
   

  	
  151

  
	
  SECTION 4.09. Compliance Certificate

  	
   

  	
  156

  
	
  SECTION 4.10. Further Instruments and Acts

  	
   

  	
  156

  
	
  SECTION 4.11. Future Guarantors

  	
   

  	
  157

  
	
  SECTION 4.12. Liens

  	
   

  	
  157

  
	
  SECTION 4.13. Limitation on Other Senior Subordinated
  Indebtedness

  	
   

  	
  158

  
	
  SECTION 4.14. Maintenance of Office or Agency

  	
   

  	
  158

  
	
  ARTICLE 5

  	
   

  	
   

  
	
  SUCCESSOR COMPANY

  	
   

  	
   

  
	
  SECTION 5.01. When Company May Merge or Transfer Assets

  	
   

  	
  160

  
	
  ARTICLE 6

  	
   

  	
   

  
	
  DEFAULTS AND REMEDIES

  	
   

  	
   

  
	
  SECTION 6.01. Events of Default

  	
   

  	
  167

  
	
  SECTION 6.02. Acceleration

  	
   

  	
  172

  
	
  SECTION 6.03. Other Remedies

  	
   

  	
  173

  
	
  SECTION 6.04. Waiver of Past Defaults

  	
   

  	
  173

  
	
  SECTION 6.05. Control by Majority

  	
   

  	
  174

  
	
  SECTION 6.06. Limitation on Suits

  	
   

  	
  174

  
	
  SECTION 6.07. Rights of the Holders to Receive Payment

  	
   

  	
  175

  
	
  SECTION 6.08. Collection Suit by Trustee

  	
   

  	
  176

  
	
  SECTION 6.09. Trustee May File Proofs of Claim

  	
   

  	
  176

  
	
  SECTION 6.10. Priorities

  	
   

  	
  177

  
	
  SECTION 6.11. Undertaking for Costs

  	
   

  	
  178

  
	
  SECTION 6.12. Waiver of Stay or Extension Laws

  	
   

  	
  178

  

 

 

ii

 

	
  ARTICLE 7

  	
   

  	
   

  
	
  TRUSTEE

  	
   

  	
   

  
	
  SECTION 7.01. Duties of Trustee

  	
   

  	
  179

  
	
  SECTION 7.02. Rights of Trustee

  	
   

  	
  182

  
	
  SECTION 7.03. Individual Rights of Trustee

  	
   

  	
  184

  
	
  SECTION 7.04. Trustee’s Disclaimer

  	
   

  	
  185

  
	
  SECTION 7.05. Notice of Defaults

  	
   

  	
  185

  
	
  SECTION 7.06. Reports by Trustee to the Holders

  	
   

  	
  186

  
	
  SECTION 7.07. Compensation and Indemnity

  	
   

  	
  186

  
	
  SECTION 7.08. Replacement of Trustee

  	
   

  	
  189

  
	
  SECTION 7.09. Successor Trustee by Merger

  	
   

  	
  190

  
	
  SECTION 7.10. Eligibility; Disqualification

  	
   

  	
  191

  
	
  SECTION 7.11. Preferential Collection of Claims Against the
  Issuers

  	
   

  	
  192

  
	
  ARTICLE 8

  	
   

  	
   

  
	
  DISCHARGE OF INDENTURE; DEFEASANCE

  	
   

  	
   

  
	
  SECTION 8.01. Discharge of Liability on Securities;
  Defeasance

  	
   

  	
  192

  
	
  SECTION 8.02. Conditions to Defeasance

  	
   

  	
  195

  
	
  SECTION 8.03. Application of Trust Money

  	
   

  	
  198

  
	
  SECTION 8.04. Repayment to Company

  	
   

  	
  198

  
	
  SECTION 8.05. Indemnity for Government Obligations

  	
   

  	
  199

  
	
  SECTION 8.06. Reinstatement

  	
   

  	
  199

  
	
  ARTICLE 9

  	
   

  	
   

  
	
  AMENDMENTS AND WAIVERS

  	
   

  	
   

  
	
  SECTION 9.01. Without Consent of the Holders

  	
   

  	
  200

  
	
  SECTION 9.02. With Consent of the Holders

  	
   

  	
  202

  
	
  SECTION 9.03. Compliance with Trust Indenture Act

  	
   

  	
  205

  
	
  SECTION 9.04. Revocation and Effect of Consents and Waivers

  	
   

  	
  205

  
	
  SECTION 9.05. Notation on or Exchange of Securities

  	
   

  	
  206

  
	
  SECTION 9.06. Trustee to Sign Amendments

  	
   

  	
  207

  
	
  SECTION 9.07. Payment for Consent

  	
   

  	
  207

  
	
  SECTION 9.08. Additional Voting Terms; Calculation of
  Principal Amount

  	
   

  	
  207

  
	
  ARTICLE 10

  	
   

  	
   

  
	
  SUBORDINATION OF THE SECURITIES

  	
   

  	
   

  
	
  SECTION 10.01. Agreement to Subordinate

  	
   

  	
  208

  
	
  SECTION 10.02. Liquidation, Dissolution, Bankruptcy

  	
   

  	
  209

  

 

iii

 

	
  SECTION 10.03. Default on Designated Senior Indebtedness

  	
   

  	
  210

  
	
  SECTION 10.04. Acceleration of Payment of Securities

  	
   

  	
  213

  
	
  SECTION 10.05. When Distribution Must Be Paid Over

  	
   

  	
  213

  
	
  SECTION 10.06. Subrogation

  	
   

  	
  213

  
	
  SECTION 10.07. Relative Rights

  	
   

  	
  214

  
	
  SECTION 10.08. Subordination May Not Be Impaired by Company

  	
   

  	
  214

  
	
  SECTION 10.09. Rights of Trustee and Paying Agent

  	
   

  	
  214

  
	
  SECTION 10.10. Distribution or Notice to Representative

  	
   

  	
  215

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

  	
   

  	
  215

  
	
  SECTION 10.12. Trust Monies Not Subordinated

  	
   

  	
  216

  
	
  SECTION 10.13. Trustee Entitled to Rely

  	
   

  	
  216

  
	
  SECTION 10.14. Trustee to Effectuate Subordination

  	
   

  	
  217

  
	
  SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
  Indebtedness

  	
   

  	
  218

  
	
  SECTION 10.16. Reliance by Holders of Senior Indebtedness
  on Subordination Provisions

  	
   

  	
  218

  
	
  ARTICLE 11

  	
   

  	
   

  
	
  GUARANTEES

  	
   

  	
   

  
	
  SECTION 11.01. Guarantees

  	
   

  	
  219

  
	
  SECTION 11.02. Limitation on Liability

  	
   

  	
  224

  
	
  SECTION 11.03. Successors and Assigns

  	
   

  	
  227

  
	
  SECTION 11.04. No Waiver

  	
   

  	
  227

  
	
  SECTION 11.05. Modification

  	
   

  	
  227

  
	
  SECTION 11.06. Execution of Supplemental Indenture for
  Future Guarantors

  	
   

  	
  228

  
	
  SECTION 11.07. Non-Impairment

  	
   

  	
  228

  
	
  ARTICLE 12

  	
   

  	
   

  
	
  SUBORDINATION OF THE GUARANTEES

  	
   

  	
   

  
	
  SECTION 12.01. Agreement to Subordinate

  	
   

  	
  229

  
	
  SECTION 12.02. Liquidation, Dissolution, Bankruptcy

  	
   

  	
  229

  
	
  SECTION 12.03. Default on Designated Senior Indebtedness of
  a Guarantor

  	
   

  	
  230

  
	
  SECTION 12.04. Demand for Payment

  	
   

  	
  233

  
	
  SECTION 12.05. When Distribution Must Be Paid Over

  	
   

  	
  234

  
	
  SECTION 12.06. Subrogation

  	
   

  	
  234

  
	
  SECTION 12.07. Relative Rights

  	
   

  	
  234

  
	
  SECTION 12.08. Subordination May Not Be Impaired by a
  Guarantor

  	
   

  	
  235

  
	
  SECTION 12.09. Rights of Trustee and Paying Agent

  	
   

  	
  235

  
	
  SECTION 12.10. Distribution or Notice to Representative

  	
   

  	
  236

  
	
  SECTION 12.11. Article 12 Not to Prevent Events of Default
  or Limit Right to Accelerate

  	
   

  	
  236

  
	
  SECTION 12.12. Trustee Entitled to Rely

  	
   

  	
  237

  
	
  SECTION 12.13. Trustee to Effectuate Subordination

  	
   

  	
  238

  
	
  SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
  Indebtedness of a Guarantor

  	
   

  	
  238

  

 

iv

 

	
  SECTION 12.15. Reliance by Holders of Senior Indebtedness
  of a Guarantor on  Subordination
  Provisions 

  	
   

  	
  238

  
	
  SECTION 12.16. Trust Monies Not Subordinated

  	
   

  	
  240

  
	
  ARTICLE 13

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
   

  
	
  SECTION 13.01. Trust Indenture Act Controls

  	
   

  	
  240

  
	
  SECTION 13.02. Notices

  	
   

  	
  241

  
	
  SECTION 13.03. Communication by the Holders with Other
  Holders

  	
   

  	
  242

  
	
  SECTION 13.04. Certificate and Opinion as to Conditions
  Precedent

  	
   

  	
  242

  
	
  SECTION 13.05. Statements Required in Certificate or
  Opinion

  	
   

  	
  243

  
	
  SECTION 13.06. When Securities Disregarded

  	
   

  	
  244

  
	
  SECTION 13.07. Rules by Trustee, Paying Agent and Registrar

  	
   

  	
  244

  
	
  SECTION 13.08. Legal Holidays

  	
   

  	
  244

  
	
  SECTION 13.09.Governing
  Law

  	
   

  	
  245

  
	
  SECTION 13.10. No Recourse Against Others

  	
   

  	
  245

  
	
  SECTION 13.11. Successors

  	
   

  	
  245

  
	
  SECTION 13.12. Multiple Originals

  	
   

  	
  246

  
	
  SECTION 13.13. Table of Contents; Headings

  	
   

  	
  246

  
	
  SECTION 13.14. Indenture Controls

  	
   

  	
  246

  
	
  SECTION 13.15. Severability

  	
   

  	
  246

  

 

Appendix A          —            Provisions
Relating to Initial Securities, Additional Securities and
                                                Exchange
Securities

EXHIBIT INDEX

Exhibit A               —            Initial
Security

Exhibit B               —            Exchange
Security

Exhibit C               —            Form
of Transferee Letter of Representation

Exhibit D               —            Form of Supplemental Indenture

 

v

 

CROSS-REFERENCE TABLE

 

	
  TIA

  Section

  	
   

  	
   

  	
  Indenture

  Section

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  7.08;
  7.10

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.06

  
	
   

  	
  (b)

  	
   

  	
  13.03

  
	
   

  	
  (c)

  	
   

  	
  13.03

  
	
  313

  	
  (a)

  	
   

  	
  7.06

  
	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (b)(2)

  	
   

  	
  7.06

  
	
   

  	
  (c)

  	
   

  	
  7.06

  
	
   

  	
  (d)

  	
   

  	
  4.02;
  4.09

  
	
  314

  	
  (a)

  	
   

  	
  4.02;
  4.09

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
   

  	
  13.04

  
	
   

  	
  (c)(2)

  	
   

  	
  13.04

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  13.05

  
	
   

  	
  (f)

  	
   

  	
  4.10

  
	
  315

  	
  (a)

  	
   

  	
  7.01

  
	
   

  	
  (b)

  	
   

  	
  7.05

  
	
   

  	
  (c)

  	
   

  	
  7.01

  
	
   

  	
  (d)

  	
   

  	
  7.01

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316

  	
  (a)(last sentence)

  	
   

  	
  13.06

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.07

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
  (b)

  	
   

  	
  2.05

  
	
  318

  	
  (a)

  	
   

  	
  13.01

  
	
   

  	
   

  	
   

  	
   

  

N.A. Means Not
Applicable.

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

 

vi

 

INDENTURE dated as of July 21, 2006 among CHASE MERGER
SUB, INC., a Delaware
corporation (“Merger Sub”), the Guarantors (as defined herein), WELLS FARGO
BANK, NATIONAL ASSOCIATION, a national banking association, as trustee (the “Trustee”),
and, upon execution and delivery of a supplemental indenture, RBS GLOBAL,
INC., a Delaware
corporation (the “Company”) and REXNORD CORPORATION, a Delaware corporation (“Rexnord”).

Each party agrees
as follows for the benefit of the other parties and for the equal and ratable
benefit of the Holders of (a) $300,000,000 aggregate principal amount of the
Issuers’ 113⁄4% Senior Subordinated Notes due 2016 (the “Original Securities”)
issued on the date hereof, (b) any Additional Securities (as defined herein)
that may be issued after the date hereof in the form of Exhibit A (all such
securities in clauses (a) and (b) being referred to collectively as the “Initial
Securities”) and (c) if and when issued as provided in the Registration
Agreement (as defined in Appendix A hereto (the “Appendix”)) or otherwise
registered under the Securities Act and issued, the Issuers’ 113⁄4% Senior
Subordinated Notes due 2016 (the “Exchange Securities” and, together with the
Initial Securities, the “Securities”) issued in the Registered Exchange Offer
(as defined in the Appendix) in exchange for any Initial Securities or
otherwise registered under the Securities Act and issued in the form of Exhibit
B.  Subject to the conditions and
compliance with the covenants set forth herein, the Issuers may issue an
unlimited aggregate principal amount of Additional Securities.

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.   Definitions.

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

(1)           Indebtedness of any other Person
existing at the time such other Person is merged, consolidated or amalgamated
with or into or became 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 acquisition by Affiliates of the Sponsors of substantially all of the
outstanding shares of capital stock of the Company pursuant to the terms of the
Merger Agreement.

“Acquisition
Documents” means the Merger Agreement and any other document entered
into in connection therewith, in each case as amended, supplemented or modified
from time to time prior to the Issue Date or thereafter (so long as any
amendment, supplement or modification after the Issue Date, together with all
other amendments, supplements and modifications after the Issue Date, taken as
a whole, is not more disadvantageous to the holders of the Securities in any
material respect than the Acquisition Documents as in effect on the Issue
Date).

 

“Additional Securities” means 113⁄4% Senior Subordinated
Notes due 2016 issued under the terms of this Indenture subsequent to the Issue
Date.

“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, means 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.

“Applicable
Premium” means, with respect to any Security on any applicable
redemption date, the greater of:

(1)           1% of the then outstanding principal
amount of the Security; and

(2)           the excess of:

(a)           the present value at
such redemption date of (i) the redemption price of the Security, at August 1,
2011 as set forth in Paragraph 5 of the applicable Security plus (ii) all required
interest payments due on such Security through August 1, 2011 (excluding
accrued but unpaid interest), computed using a discount rate equal to the
Treasury Rate as of such redemption date plus 50 basis points; over

(b)           the then outstanding
principal amount of the Security.

“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/Leaseback Transaction) outside the ordinary course of business of the
Company or any Restricted Subsidiary of the Company (each referred to in this
definition as a “disposition”) or

(2)           the issuance or sale
of Equity Interests (other than directors’ qualifying shares and shares issued
to foreign nationals or other third parties to the extent required by
applicable law) of any Restricted Subsidiary (other than to the Company or
another Restricted Subsidiary of the Company) (whether in a single transaction
or a series of related transactions),

in each case other than:

(a)           a disposition of
Cash Equivalents or Investment Grade Securities or obsolete or worn out
property or equipment in the ordinary course of business;

 

2

 

(b)           the disposition of all
or substantially all of the assets of the Company in a manner permitted
pursuant to Section 5.01 or any disposition that constitutes a Change of
Control;

(c)           any Restricted
Payment or Permitted Investment that is permitted to be made, and is made,
under Section 4.04;

(d)           any disposition of
assets or issuance or sale of Equity Interests of any Restricted Subsidiary,
which assets or Equity Interests so disposed or issued have an aggregate Fair
Market Value of less than $7.5 million;

(e)           any disposition of property
or assets, or the 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 a Restricted Subsidiary of the Company;

(f)            any exchange of
assets (including a combination of assets and Cash Equivalents) for assets
related to a Similar Business of comparable or greater market value or
usefulness to the business of the Company and its Restricted Subsidiaries as a
whole, as determined in good faith by the Issuers, which in the event of an
exchange of assets with a Fair Market Value in excess of (A) $7.5 million shall
be evidenced by an Officers’ Certificate, and (B) $15 million shall be set
forth in a resolution approved in good faith by at least a majority of the
Board of Directors of the Company;

(g)           foreclosure on
assets of the Company or any of its Restricted Subsidiaries;

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

(i)            the lease,
assignment or sublease of any real or personal property in the ordinary course
of business;

(j)            any sale of
inventory or other assets in the ordinary course of business;

(k)           any grant in the
ordinary course of business of any license of patents, trademarks, know-how or
any other intellectual property;

(l)            a transfer of
accounts receivable and related assets of the type specified in the definition
of “Receivables Financing” (or a fractional undivided interest therein) by a
Receivables Subsidiary in a Qualified Receivables Financing;

(m)          the sale of any
property in a Sale/Leaseback Transaction within six months of the acquisition
of such property; and

(n)           the conversion of
Rexnord into a Delaware limited liability company.

“Bank
Indebtedness” means any and all amounts payable under or in respect of
the Credit Agreement and the other Senior Credit Documents as amended,
restated, supplemented, waived, replaced, restructured, repaid, refunded,
refinanced or otherwise modified 

 

3

 

from time to time (including after termination of the
Credit Agreement), including principal, premium (if any), interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to either of the Issuers whether or not a claim for
post-filing interest is allowed in such proceedings), fees, charges, expenses,
reimbursement obligations, guarantees and all other amounts payable thereunder
or in respect thereof.

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

“Business Day”
means a day other than a Saturday, Sunday or other day on which banking
institutions are authorized or required by law to close in New York City or the
city in which the Trustee’s principal office is located.

“Capital
Stock” means:

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

(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.

“Cash
Contribution Amount” means the aggregate amount of cash contributions
made to the capital of the Company described in the definition of “Contribution
Indebtedness.”

“Cash
Equivalents” means:

(1)           U.S. Dollars, pounds
sterling, euros, the national currency of any member state in the European
Union or, in the case of any Foreign Subsidiary that is a Restricted
Subsidiary, such local currencies held by it from time to time in the ordinary
course of business;

(2)           securities issued or
directly and fully guaranteed or insured by the U.S. government or any country
that is a member of the European Union or any agency or instrumentality thereof
in each case maturing, not more than two years from the date of acquisition;

 

4

 

(3)           certificates of
deposit, time deposits and eurodollar time deposits with maturities of one year
or less from the date of acquisition, bankers’ acceptances, in each case with
maturities not exceeding one year and overnight bank deposits, in each case
with any commercial bank having capital and surplus in excess of $250 million
and whose long-term debt is rated “A” or the equivalent thereof by Moody’s or
S&P (or reasonably equivalent ratings of another internationally recognized
ratings agency);

(4)           repurchase
obligations for underlying securities of the types described in clauses (2) and
(3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;

(5)           commercial paper
issued by a corporation (other than an Affiliate of the Company) rated at least
“A-1” or the equivalent thereof by Moody’s or S&P (or reasonably equivalent
ratings of another internationally recognized ratings agency) and in each case
maturing within one year after the date of acquisition;

(6)           readily marketable
direct obligations issued by any state of the United States of America or any
political subdivision thereof having one of the two highest rating categories
obtainable from either Moody’s or S&P (or reasonably equivalent ratings of
another internationally recognized ratings agency) in each case with maturities
not exceeding two years from the date of acquisition;

(7)           Indebtedness issued
by Persons (other than the Sponsors or any of their Affiliates) with a rating
of “A” or higher from S&P or “A-2” or higher from Moody’s in each case with
maturities not exceeding two years from the date of acquisition; and

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

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

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

(ii)   the Issuers become 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 any of 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 more than 50% of the total voting power of the Voting Stock of
the Company or any direct or indirect parent of the Company; or

 

5

 

(iii)   individuals who on the Issue Date constituted
the Board of Directors of the Company (together with any new directors whose
election by such Board of Directors of the Company or whose nomination for
election by the shareholders of the Company was approved by (a) a vote of a
majority of the directors of the Company then still in office who were either
directors on the Issue Date or whose election or nomination for election was
previously so approved or (b) the Permitted Holders) cease for any reason to
constitute a majority of the Board of Directors of the Company then in office.

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

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

“consolidated” means, with respect to any Person, such
Person consolidated with its Restricted Subsidiaries, and shall not include any
Unrestricted Subsidiary, but the interest of such Person in an Unrestricted
Subsidiary shall be accounted for as an Investment.

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

(1)           consolidated
interest expense of such Person and its Restricted Subsidiaries for such
period, to the extent such expense was deducted in computing Consolidated Net
Income (including amortization of original issue discount, the interest component
of Capitalized Lease Obligations, and net payments and receipts (if any)
pursuant to interest rate Hedging Obligations and excluding amortization of
deferred financing fees and expensing of any bridge or other financing fees);
plus

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

(3)           commissions,
discounts, yield and other fees and charges Incurred in connection with any
Receivables Financing which are payable to Persons other than the Company and
its Restricted Subsidiaries; minus

(4)           interest income for
such period.

“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; provided, however, that:

(1)           any net after-tax
extraordinary, nonrecurring or unusual gains or losses or income, expenses or
charges (less all fees and expenses relating thereto), including, without
limitation, any severance expenses, and fees, expenses or charges related to
any Equity Offering, Permitted Investment, acquisition or Indebtedness
permitted to be Incurred by this Indenture (in each case, whether or not
successful), including any such 

 

6

 

fees, expenses, charges or change in control payments
made under the Acquisition Documents or otherwise related to the Transactions,
in each case, shall be excluded;

(2)           any increase in
amortization or depreciation or any one-time non-cash charges increases or
reductions in Net Income, in each case resulting from purchase accounting in
connection with the Transactions or any acquisition that is consummated after
the Issue Date shall be excluded;

(3)           the Net Income for
such period shall not include the cumulative effect of a change in accounting
principles during such period;

(4)           any net after-tax
income or loss from discontinued operations and any net after-tax gains or
losses on disposal of discontinued operations shall be excluded;

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

(6)           any net after-tax
gains or losses (less all fees and expenses or charges relating thereto)
attributable to the early extinguishment of indebtedness shall be excluded;

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

(8)           solely for the
purpose of determining the amount available for Restricted Payments under
clause (1) of the definition of Cumulative Credit, 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 such 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 restrictions with respect to the
payment of dividends or similar distributions have been legally waived; provided that the Consolidated Net Income of such Person
shall be increased by the amount of dividends or other distributions or other
payments actually paid in cash (or converted into cash) by any such Restricted
Subsidiary to such Person, to the extent not already included therein;

(9)           an amount equal to
the amount of Tax Distributions actually made to any parent of such Person in
respect of such period in accordance with Section 4.04(b)(xii) shall be
included as though such amounts had been paid as income taxes directly by such
Person for such period;

 

7

 

(10)         any non-cash
impairment charges resulting from the application of Statement of Financial
Accounting Standards (“SFAS”) Nos. 142 and 144 and the amortization of
intangibles arising pursuant to SFAS No. 141 shall be excluded;

(11)         any non-cash expense
realized or resulting from employee benefit plans or post-employment benefit
plans, grants of stock appreciation or similar rights, stock options or other
rights to officers, directors and employees of such Person or any of its
Restricted Subsidiaries shall be excluded;

(12)         any (a) severance or
relocation costs or expenses, (b) one-time non-cash compensation charges, (c)
the costs and expenses after the Issue Date related to employment of terminated
employees, (d) costs or expenses realized in connection with, resulting from or
in anticipation of the Transactions or (e) costs or expenses realized in
connection with or resulting from stock appreciation or similar rights, stock
options or other rights existing on the Issue Date of officers, directors and
employees, in each case of such Person or any of its Restricted Subsidiaries,
shall be excluded;

(13)         accruals and reserves
that are established within 12 months after the Issue Date and that are so
required to be established in accordance with GAAP shall be excluded;

(14)         solely for purposes
of calculating EBITDA, (a) the Net Income of any Person and its Restricted
Subsidiaries shall be calculated without deducting the income attributable to,
or adding the losses attributable to, the minority equity interests of third
parties in any non-wholly-owned Restricted Subsidiary except to the extent of
dividends declared or paid in respect of such period or any prior period on the
shares of Capital Stock of such Restricted Subsidiary held by such third
parties and (b) any ordinary course dividend, distribution or other payment
paid in cash and received from any Person in excess of amounts included in
clause (7) above shall be included;

(15)         (a)(i) the non-cash
portion of “straight-line” rent expense shall be excluded and (ii) the cash
portion of “straight-line” rent expense which exceeds the amount expensed in
respect of such rent expense shall be included and (b) non-cash gains, losses,
income and expenses resulting from fair value accounting required by Statement
of Financial Accounting Standards No. 133 shall be excluded;

(16)         unrealized gains and
losses relating to hedging transactions and mark-to-market of Indebtedness
denominated in foreign currencies resulting from the applications of Financial
Accounting Standards 52 shall be excluded; and

(17)         solely for the
purpose of calculating Restricted Payments, the difference, if positive, of the
Consolidated Taxes of the Company calculated in accordance with GAAP and the
actual Consolidated Taxes paid in cash by the Company during any Reference
Period shall be included.

Notwithstanding the foregoing, for the purpose of
Section 4.04 only, there shall be excluded from Consolidated Net Income any
dividends, repayments of loans or advances or other transfers of assets from
Unrestricted Subsidiaries of the Company or a Restricted 

 

8

 

Subsidiary of the Company to the extent such
dividends, repayments or transfers increase the amount of Restricted Payments
permitted under clauses (D) and (E) of the definition of “Cumulative Credit.”

“Consolidated
Non-cash Charges” means, with respect to any Person for any period, the
aggregate depreciation, amortization and other non-cash expenses of such Person
and its Restricted Subsidiaries reducing Consolidated Net Income of such Person
for such period on a consolidated basis and otherwise determined in accordance
with GAAP, but excluding any such charge which consists of or requires an
accrual of, or cash reserve for, anticipated cash charges for any future
period.

“Consolidated
Taxes” means provision for taxes based on income, profits or capital,
including, without limitation, state, franchise and similar taxes and any Tax
Distributions taken into account in calculating Consolidated Net Income.

“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,

(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.

“Contribution Indebtedness” means Indebtedness of the Company or any Guarantor in an aggregate principal amount not greater than twice
the aggregate amount of cash contributions (other than Excluded Contributions)
made to the capital of the Company or any Guarantor after the Issue Date; provided
that:

(1)           such cash contributions have not been used to
make a Restricted Payment,

(2)           if the aggregate principal amount of such
Contribution Indebtedness is greater than the aggregate amount of such cash contributions
to the capital of the Company or any Guarantor, as the case may be, the amount in excess shall be Indebtedness
(other than Secured Indebtedness) with a Stated Maturity later than the Stated
Maturity of the Securities, and

 

9

 

(3)           such Contribution Indebtedness (a) is
Incurred within 180 days after the making of such cash contributions and (b) is
so designated as Contribution Indebtedness pursuant to an Officers’ Certificate
on the Incurrence date thereof.

“Credit
Agreement” means (i) the credit agreement entered into in connection
with, and on or prior to, the consummation of the Acquisition, as amended,
restated, supplemented, waived, replaced (whether or not upon termination, and
whether with the original lenders or otherwise), restructured, repaid,
refunded, refinanced or otherwise modified from time to time, including any
agreement or indenture extending the maturity thereof, refinancing, replacing
or otherwise restructuring all or any portion of the Indebtedness under such
agreement or agreements or indenture or indentures or any successor or
replacement agreement or agreements or indenture or indentures or increasing
the amount loaned or issued thereunder or altering the maturity thereof, among
the Issuers, the guarantors named therein, the financial institutions named
therein, and Merrill Lynch Capital Corporation, as Administrative Agent, and
(ii) whether or not the credit agreement referred to in clause (i) remains
outstanding, if designated by the Company to be included in the definition of “Credit
Agreement,” one or more (A) debt facilities or commercial paper facilities,
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to lenders or to special purpose
entities formed to borrow from lenders against such receivables) or letters of
credit, (B) debt securities, indentures or other forms of debt financing
(including convertible or exchangeable debt instruments or bank guarantees or
bankers’ acceptances), or (C) instruments or agreements evidencing any other
Indebtedness, in each case, with the same or different borrowers or issuers
and, in each case, as amended, supplemented, modified, extended, restructured,
renewed, refinanced, restated, replaced or refunded in whole or in part from
time to time.

“Cumulative
Credit” means the sum of (without duplication):

(A)          50% of the
Consolidated Net Income of the Company for the period (taken as one accounting
period, the “Reference Period”) from July 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 proceeds, including cash and the Fair Market Value (as determined in
accordance with the next succeeding sentence) of property other than cash,
received by the Company after the Issue Date from the issue or sale of Equity
Interests of the Company (excluding Refunding Capital Stock, Designated
Preferred Stock, Excluded Contributions, Disqualified Stock and the Cash
Contribution Amount), including Equity Interests issued upon conversion of
Indebtedness or Disqualified Stock or upon exercise of warrants or options
(other than an issuance or sale to a Restricted Subsidiary of the Company or an
employee stock ownership plan or trust established by the Company or any of its
Subsidiaries), plus

(C)          100% of the aggregate
amount of contributions to the capital of the Company received in cash and the
Fair Market Value (as determined in accordance with the next succeeding
sentence) of property other than cash after the Issue Date (other than 

 

10

 

Excluded Contributions, Refunding Capital Stock,
Designated Preferred Stock, Disqualified Stock and the Cash Contribution
Amount), plus

(D)          the principal amount
of any Indebtedness, or the liquidation preference or maximum fixed repurchase
price, as the case may be, of any Disqualified Stock of the Company or any
Restricted Subsidiary thereof issued after the Issue Date (other than
Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has
been converted into or exchanged for Equity Interests in the Company (other
than Disqualified Stock) or any direct or indirect parent of the Company
(provided in the case of any parent, such Indebtedness or Disqualified Stock is
retired or extinguished), plus

(E)           100% of the
aggregate amount received by the Company or any Restricted Subsidiary in cash
and the Fair Market Value (as determined in accordance with the next succeeding
sentence) of property other than cash received by the Company or any Restricted
Subsidiary from:

(I)            the sale or other
disposition (other than to the Company or a Restricted Subsidiary of the
Company) of Restricted Investments made by the Company and its Restricted
Subsidiaries and from repurchases and redemptions of such Restricted
Investments from the Company and its Restricted Subsidiaries by any Person
(other than the Company or any of its Restricted Subsidiaries) and from
repayments of loans or advances which constituted Restricted Investments (other
than in each case to the extent that the Restricted Investment was made
pursuant to clause (vii) or (x) of Section 4.04(b)),

(II)          the sale (other than
to the Company or a Restricted Subsidiary of the Company) of the Capital Stock
of an Unrestricted Subsidiary, or

(III)        a distribution or
dividend from an Unrestricted Subsidiary, plus

(F)           in the event any
Unrestricted Subsidiary of the Company has been redesignated as a Restricted
Subsidiary or has been merged, consolidated or amalgamated with or into, or
transfers or conveys its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company, the Fair Market Value (as determined in
accordance with the next succeeding sentence) of the Investment of the Company
in such Unrestricted Subsidiary at the time of such redesignation, combination
or transfer (or of the assets transferred or conveyed, as applicable), after
taking into account any Indebtedness associated with the Unrestricted
Subsidiary so designated or combined or any Indebtedness associated with the
assets so transferred or conveyed (other than in each case to the extent that
the designation of such Subsidiary as an Unrestricted Subsidiary was made
pursuant to clause (vii) or (x) of Section 4.04(b) or constituted a Permitted
Investment).

The Fair Market Value of property other than cash
covered by clauses (B), (C), (D), (E) and (F) of this definition of “Cumulative
Credit” shall be determined in good faith by the Company and

(x)           in the event of
property with a Fair Market Value in excess of $7.5 million, shall be set forth
in an Officers’ Certificate or

 

11

 

(y)           in the event of
property with a Fair Market Value in excess of $15 million, shall be set forth
in a resolution approved by at least a majority of the Board of Directors of
the Company.

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

“Designated
Non-cash Consideration” means the Fair Market Value of non-cash
consideration received by the Company or one of its Restricted Subsidiaries in
connection with an Asset Sale that is so designated as Designated Non-cash
Consideration pursuant to an Officers’ Certificate, setting forth the basis of
such valuation, less the amount of Cash Equivalents received in connection with
a subsequent sale of such Designated Non-cash Consideration.

“Designated
Preferred Stock” means Preferred Stock of the Company or any direct or
indirect parent of the Company, as applicable (other than Disqualified Stock),
that is issued for cash (other than to the Company or any of its Subsidiaries
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 Officers’ Certificate, on the issuance date thereof.

“Designated
Senior Indebtedness” means, with respect to the Company or a Guarantor:

(1)           the Bank
Indebtedness; and

(2)           any other Senior
Indebtedness of the Company or such Guarantor which, at the date of
determination, has an aggregate principal amount outstanding of, or under
which, at the date of determination, the holders thereof are committed to lend
up to, at least $25.0 million and is specifically designated by the Issuers or
such Guarantor in the instrument evidencing or governing such Senior
Indebtedness as “Designated Senior Indebtedness” for purposes of this
Indenture.

“Disqualified
Stock” means, with respect to any Person, any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is redeemable or exchangeable), or upon the
happening of any event:

(1)           matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control
provisions, taken as a whole, are no more favorable in any material respect to
holders of such Capital Stock than the asset sale and change of control
provisions applicable to the Securities and any purchase requirement triggered
thereby may not become operative until compliance with the asset sale and
change of control provisions applicable to the Securities (including the
purchase of any Securities tendered pursuant thereto)),

(2)           is convertible or
exchangeable for Indebtedness or Disqualified Stock of such Person, or

 

12

 

(3)           is redeemable at the
option of the holder thereof, in whole or in part,

in each case prior to 91 days after the maturity date
of the Securities; provided, however, that only the portion of Capital Stock which so
matures or is mandatorily redeemable, is so convertible or exchangeable or is
so redeemable at the option of the holder thereof prior to such date shall be
deemed to be Disqualified Stock; provided, further, however, that
if such Capital Stock is issued to any employee or 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 in order to satisfy
applicable statutory or regulatory obligations or as a result of such employee’s
termination, death or disability; provided, further, that any class of Capital Stock of such Person that
by its terms authorizes such Person to satisfy its obligations thereunder by
delivery of Capital Stock that is not Disqualified Stock shall not be deemed to
be Disqualified Stock.

“Domestic
Subsidiary” means a Restricted Subsidiary that is not a Foreign
Subsidiary.

“EBITDA”
means, with respect to any Person for any period, the Consolidated Net Income
of such Person for such period plus, without duplication, to the extent the
same was deducted in calculating Consolidated Net Income:

(1)           Consolidated Taxes;
plus

(2)           Consolidated
Interest Expense; plus

(3)           Consolidated
Non-cash Charges; plus

(4)           business
optimization expenses and other restructuring charges or expenses (which, for
the avoidance of doubt, shall include, without limitation, the effect of
inventory optimization programs, plant closures, retention, systems
establishment costs and excess pension charges); provided that with respect to each business optimization
expense or other restructuring charge, the Company shall have delivered to the
Trustee an Officers’ Certificate specifying and quantifying such expense or
charge and stating that such expense or charge is a business optimization
expense or other restructuring charge, as the case may be; plus

(5)           the amount of
management, monitoring, consulting and advisory fees and related expenses paid
to the Sponsors (or any accruals relating to such fees and related expenses)
during such period pursuant to the terms of the agreements between the Sponsors
and the Company and its Subsidiaries as described with particularity in the
Offering Circular and as in effect on the Issue Date;

less, without duplication,

(6)           non-cash items
increasing Consolidated Net Income for such period (excluding the recognition
of deferred revenue or any items which represent the reversal of any accrual
of, or cash reserve for, anticipated cash charges in any prior period and any
items for which cash was received in a prior period).

 

13

 

“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 after the Issue Date of
common stock or Preferred Stock of the Company or any direct or indirect parent
of the Company, as applicable (other than Disqualified Stock), other than:

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

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

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

“Exchange Offer Registration Statement” means the
registration statement filed with the SEC in connection with the Registered
Exchange Offer.

“Excluded
Contributions” means the Cash Equivalents or other assets (valued at
their Fair Market Value as determined in good faith by senior management or the
Board of Directors of the Company) received by the Company after the Issue Date
from:

(1)           contributions to its
common equity capital, and

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

in each case designated as Excluded Contributions
pursuant to an Officers’ Certificate on or promptly after the date such capital
contributions are made or the date such Capital Stock is sold, as the case may
be.

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

“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 of its Restricted Subsidiaries Incurs, repays,
repurchases or redeems any Indebtedness (other than in the case of revolving
credit borrowings or revolving advances under any Qualified Receivables
Financing, in which case interest expense shall be computed based upon the
average daily balance of such Indebtedness during the applicable period) or
issues, repurchases 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 the event for which the calculation of the Fixed
Charge Coverage 

 

14

 

Ratio is made (the “Calculation Date”), then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect to such
Incurrence, repayment, repurchase or redemption of Indebtedness, or such
issuance, repurchase 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
discontinued operations (as determined in accordance with GAAP), in each case
with respect to an operating unit of a business, and any operational changes
that the Company or any of its Restricted Subsidiaries has both determined to
make and made after the Issue Date and during the four-quarter reference period
or subsequent to such reference period and on or prior to or simultaneously
with the Calculation Date (each, for purposes of this definition, a “pro forma
event”) shall be calculated on a pro forma basis assuming that all such
Investments, acquisitions, dispositions, mergers, consolidations (including the
Transactions) discontinued operations and operational changes (and the change
of 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 Restricted Subsidiary since the
beginning of such period shall have made any Investment, acquisition,
disposition, merger, consolidation, discontinued operation or operational
change, in each case with respect to an operating unit of a business, 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, discontinued
operation, merger, consolidation or operational change 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 any pro forma event, the pro forma calculations shall
be made in good faith by a responsible financial or accounting officer of the
Company.  Any such pro forma calculation
may include adjustments appropriate, in the reasonable good faith determination
of the Issuers as set forth in an Officers’ Certificate, to reflect (1)
operating expense reductions and other operating improvements or synergies
reasonably expected to result from the applicable pro forma event (including,
to the extent applicable, from the Transactions), and (2) all adjustments of
the nature used in connection with the calculation of “Adjusted EBITDA” as set
forth in footnote 3 to the “Summary Historical and Unaudited Pro Forma
Financial Data” under “Offering Circular Summary” in the Offering Circular to
the extent such adjustments, without duplication, continue to be applicable to
such four-quarter period.

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 Calculation Date had been the
applicable rate for the entire period (taking into account any Hedging
Obligations applicable to such Indebtedness if such Hedging Obligation has a
remaining term in excess of 12 months). 
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 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 

 

15

 

applicable period. 
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 Issuers may designate.

“Fixed
Charges” means, with respect to any Person for any period, the sum,
without duplication, of:

(1)           Consolidated
Interest Expense of such Person for such period, and

(2)           all cash dividend
payments (excluding items eliminated in consolidation) on any series of
Preferred Stock or Disqualified Stock of such Person and its Restricted
Subsidiaries.

“Foreign
Subsidiary” means a Restricted Subsidiary not organized or existing
under the laws of the United States of America or any state or territory or the
District of Columbia thereof and any direct or indirect subsidiary of such
Restricted Subsidiary.

“GAAP”
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the Issue Date.  For the purposes of this Indenture, the term “consolidated”
with respect to any Person shall mean such Person consolidated with its
Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but
the interest of such Person in an Unrestricted Subsidiary will be accounted for
as an Investment.

“Guarantee”
means any guarantee of the obligations of the Company under this Indenture and
the Securities by any Person in accordance with the provisions of this
Indenture.

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

“Guarantor” means any Person that Incurs a Guarantee; provided that upon the release or
discharge of such Person from its Guarantee in accordance with this Indenture,
such Person ceases to be a Guarantor.

“Hedging
Obligations” means, with respect to any Person, the obligations of such
Person under:

(1)           currency exchange,
interest rate or commodity swap agreements, currency exchange, interest rate or
commodity cap agreements and currency exchange, interest rate or commodity
collar agreements; and

 

16

 

(2)           other agreements or
arrangements designed to protect such Person against fluctuations in currency
exchange, interest rates or commodity prices.

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

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

“Indebtedness”
means, with respect to any Person:

(1)           the principal and
premium (if any) of 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
deferred and unpaid purchase price of any property, except any such balance
that constitutes a trade payable or similar obligation to a trade creditor due
within six months from the date on which it is Incurred, in each case Incurred
in the ordinary course of business, which purchase price is due more than six
months after the date of placing the property in service or taking delivery and
title thereto, (d) in respect of Capitalized Lease Obligations, or (e)
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 on a balance sheet (excluding the footnotes
thereto) of such Person prepared in accordance with GAAP;

(2)           to the extent not
otherwise included, any obligation of such Person to be liable for, or to pay,
as obligor, guarantor or otherwise, on the Indebtedness of another Person
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business);

(3)           to the extent not
otherwise included, Indebtedness of another Person secured by a Lien on any
asset owned by such Person (whether or not such Indebtedness is assumed by such
Person); provided, however,
that the amount of such Indebtedness will be the lesser of: (a) the Fair Market
Value of such asset at such date of determination, and (b) the amount of such
Indebtedness of such other Person; and

(4)           to the extent not
otherwise included, with respect to the Company and its Restricted
Subsidiaries, the amount then outstanding (i.e., advanced,
and received by, and available for use by, the Company or any of its Restricted
Subsidiaries) under any Receivables Financing (as set forth in the books and
records of the Company or any Restricted Subsidiary and confirmed by the agent,
trustee or other representative of the institution or group providing such Receivables
Financing);

provided, however, that
notwithstanding the foregoing, Indebtedness shall be deemed not to include (1)
Contingent Obligations incurred in the ordinary course of business and not in
respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price
holdbacks in respect of 

 

17

 

a portion of the purchase price of an asset to satisfy
warranty or other unperformed obligations of the respective seller; (4)
Obligations under or in respect of Qualified Receivables Financing or (5)
obligations under the Acquisition Documents.

                                Notwithstanding
anything in this Indenture to the contrary, Indebtedness shall not include, and
shall be calculated without giving effect to, the effects of Statement of
Financial Accounting Standards No. 133 and related interpretations to the
extent such effects would otherwise increase or decrease an amount of
Indebtedness for any purpose under this Indenture as a result of accounting for
any embedded derivatives created by the terms of such Indebtedness; and any
such amounts that would have constituted Indebtedness under this Indenture but
for the application of this sentence shall not be deemed an Incurrence of
Indebtedness under this Indenture.

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

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

“Investment
Grade Securities” means:

(1)           securities issued or
directly and fully guaranteed or insured by the U.S. government or any agency
or instrumentality thereof (other than Cash Equivalents),

(2)           securities that have
a rating equal to or higher than Baa3 (or equivalent) by Moody’s or BBB- (or
equivalent) by S&P, or an equivalent rating by any other Rating Agency, but
excluding any debt securities or loans or advances between and 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 and/or distribution, and

(4)           corresponding
instruments in countries other than the United States customarily utilized for
high quality investments and in each case with maturities not exceeding two
years from the date of acquisition.

“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
and advances to customers and commission, travel and similar advances to
officers, employees and consultants 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 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 4.04:

 

18

 

(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 equal to 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 Board of Directors of the Company.

“Issue Date”
means July 21, 2006, the date on which the Original Securities are issued.

“Issuer” or “Issuers” mean
(i) Merger Sub only, prior to the merger of Merger Sub with and into the
Company pursuant to the Merger Agreement (the “merger”), and (ii) the
Company and Rexnord, but not any of their respective Subsidiaries, following
the merger.

 

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

 

“Management
Group” means the group consisting of the directors, executive officers
and other management personnel of the Company or any direct or indirect parent
of the Company, as the case may be, on the Issue Date together with (1) any new
directors whose election by such boards of directors or whose nomination for
election by the shareholders of the Company or any direct or indirect parent of
the Company, as applicable, was approved by a vote of a majority of the
directors of the Company or any direct or indirect parent of the Company, as
applicable, then still in office who were either directors on the Issue Date or
whose election or nomination was previously so approved and (2) executive
officers and other management personnel of the Company or any direct or
indirect parent of the Company, as applicable, hired at a time when the
directors on the Issue Date together with the directors so approved constituted
a majority of the directors of the Company or any direct or indirect parent of
the Company, as applicable.

 

19

 

“Merger Agreement” means the agreement and plan of
merger, dated as of May 24, 2006, by and among Chase Acquisition I, Inc., a
Delaware corporation, Merger Sub, the Company and TC Group, L.L.C., a Delaware
limited liability company, as amended, supplemented or modified from time to
time prior to the Issue Date or thereafter (so long as any amendment,
supplement or modification after the Issue Date, together with all other
amendments, supplements and modifications after the Issue Date, taken as a
whole, is not more disadvantageous to the Holders of the Securities in any
material respect than the Merger Agreement as in effect on the Issue Date).

“Moody’s”
means Moody’s Investors Service, Inc. or any successor to the rating agency
business thereof.

“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.

“Net Proceeds”
means the aggregate cash proceeds received by the Company or any of its
Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received in respect of or upon the sale or other
disposition of any Designated Non-cash Consideration received in any Asset Sale
and any cash payments received by way of deferred payment of principal pursuant
to a note or installment receivable or otherwise, but only as and when
received, but excluding the assumption by the acquiring Person of Indebtedness
relating to the disposed assets or other consideration received in any other
non-cash form), net of the direct costs relating to such Asset Sale and the
sale or disposition of such Designated Non-cash Consideration (including,
without limitation, legal, accounting and investment banking fees, and
brokerage and sales commissions), and 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 related thereto), amounts required to be applied to the repayment
of principal, premium (if any) and interest on Indebtedness required (other
than pursuant to Section 4.06(b)(i)) to be paid as a result of such transaction,
and any deduction of appropriate amounts to be provided by the Company as a
reserve in accordance with GAAP against any liabilities associated with the
asset disposed of in such transaction and retained by the Company after such
sale or other disposition thereof, including, without limitation, pension and
other post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated
with such transaction.

“Obligations”
means any principal, interest, penalties, fees, indemnifications,
reimbursements (including, without limitation, reimbursement obligations with
respect to letters of credit and bankers’ acceptances), damages and other
liabilities payable under the documentation governing any Indebtedness; provided that Obligations with respect to the Securities
shall not include fees or indemnifications in favor of the Trustee and other
third parties other than the Holders of the Securities.

“Offering Circular” means the offering circular relating
to the offering of the Original Securities dated July 14, 2006.

 

20

 

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

“Officers’
Certificate” means a certificate signed on behalf of the Issuer by two
Officers of the Issuer, one of whom must be the principal executive officer,
the principal financial officer, the treasurer or the principal accounting
officer of the 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 or the Trustee.

“Pari Passu
Indebtedness” means:

(1)           with respect to the
Company, the Securities and any Indebtedness which ranks pari passu in right of
payment to the Securities; and

(2)           with respect to any
Guarantor, its Guarantee and any Indebtedness which ranks pari passu in right
of payment to such Guarantor’s Guarantee.

“Permitted
Holders” means, at any time, each of (i) the Sponsors and (ii) the
Management Group.  Any person or group
whose acquisition of beneficial ownership constitutes a Change of Control in
respect of which a Change of Control Offer is made in accordance with the
requirements of this Indenture will thereafter, together with its Affiliates,
constitute an additional Permitted Holder.

“Permitted
Investments” means:

(1)           any Investment in
the Company or any Restricted Subsidiary;

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

(3)           any Investment by
the Company or any Restricted Subsidiary of the Company in a Person if as a
result of such Investment (a) such Person becomes a Restricted Subsidiary of
the Company, or (b) such Person, in one transaction or a series of related
transactions, is merged, consolidated or amalgamated with or into, or transfers
or conveys all or substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary of the Company;

(4)           any Investment in
securities or other assets not constituting Cash Equivalents and received in
connection with an Asset Sale made pursuant to the provisions of Section 4.06
or any other disposition of assets not constituting an Asset Sale;

(5)           any Investment
existing on, or made pursuant to binding commitments existing on, the Issue
Date;

 

21

 

(6)           advances to
employees not in excess of $15 million outstanding at any one time in the
aggregate;

(7)           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;

(8)           Hedging Obligations
permitted under Section 4.03(b)(x);

(9)           any Investment by
the Company or any of its Restricted Subsidiaries in a Similar Business having
an aggregate Fair Market Value, taken together with all other Investments made
pursuant to this clause (9) that are at that time outstanding, not to exceed
the greater of (x) $100.0 million and (y) 4.5% 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, however, that
if any Investment pursuant to this clause (9) is made in any Person that is not
a Restricted Subsidiary of the Company at the date of the making of such
Investment and such Person becomes a Restricted Subsidiary of the Company after
such date, such Investment shall thereafter be deemed to have been made
pursuant to clause (1) above and shall cease to have been made pursuant to this
clause (9) for so long as such Person continues to be a Restricted Subsidiary;

(10)         additional
Investments by the Company or any of its Restricted Subsidiaries having an aggregate
Fair Market Value, taken together with all other Investments made pursuant to
this clause (10) that are at that time outstanding, not to exceed the greater
of (x) $100.0 million and (y) 4.5% 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);

(11)         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;

(12)         Investments the
payment for which consists of Equity Interests of the Company (other than
Disqualified Stock) or any direct or indirect parent of the Company, as
applicable; provided, however,
that such Equity Interests will not increase the amount available for
Restricted Payments under clause (C) of the definition of “Cumulative Credit”;

(13)         any transaction to
the extent it constitutes an Investment that is permitted by and made in
accordance with the provisions of Section 4.07(b) (except transactions
described in clauses (ii), (vi), (vii) and (xi)(b) of such Section);

 

22

 

(14)         Investments
consisting of the licensing or contribution of intellectual property pursuant
to joint marketing arrangements with other Persons;

(15)         guarantees issued in accordance with Sections
4.03 and 4.11;

(16)         Investments
consisting of purchases and acquisitions of inventory, supplies, materials and
equipment or purchases of contract rights or licenses or leases of intellectual
property, in each case in the ordinary course of business;

(17)         any Investment in a
Receivables Subsidiary or any Investment by a Receivables Subsidiary in any
other Person in connection with a Qualified Receivables Financing, including
Investments of funds held in accounts permitted or required by the arrangements
governing such Qualified Receivables Financing or any related Indebtedness; provided, however, that
any Investment in a Receivables Subsidiary is in the form of a Purchase Money
Note, contribution of additional receivables or an equity interest;

(18)         additional
Investments in joint ventures of the Company or any of its Restricted
Subsidiaries existing on the Issue Date not to exceed $15 million at any one
time; and

(19)         Investments of a
Restricted Subsidiary of the Company acquired after the Issue Date or of an
entity merged into, amalgamated with, or consolidated with a Restricted
Subsidiary of the Company in a transaction that is not prohibited by Section
5.01 after the Issue Date to the extent that such Investments were not made in
contemplation of such acquisition, merger, amalgamation or consolidation and
were in existence on the date of such acquisition, merger, amalgamation or
consolidation.

“Permitted
Junior Securities” shall mean unsecured debt or equity securities of the
Company or any Guarantor or any successor corporation issued pursuant to a plan
of reorganization or readjustment of the Company or any Guarantor, as
applicable, that are subordinated to the payment of all then outstanding Senior
Indebtedness of the Company or any Guarantor, as applicable, at least to the
same extent that the Securities are subordinated to the payment of all Senior
Indebtedness of the Company or any Guarantor, as applicable, on the Issue Date,
so long as to the extent that any Senior Indebtedness of the Company or any
Guarantor, as applicable, outstanding on the date of consummation of any such
plan of reorganization or readjustment 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 or readjustment.

“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 

 

23

 

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 due 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;

(3)           Liens for taxes, assessments
or other governmental charges not yet due or payable or subject to penalties
for nonpayment or which are being contested in good faith by appropriate
proceedings;

(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)           (A) Liens securing
Senior Indebtedness, and Liens on assets of a Restricted Subsidiary that is not
a Guarantor securing Indebtedness of such Restricted Subsidiary, in each case
permitted to be Incurred pursuant to Section 4.03 and (B) Liens securing
Indebtedness permitted to be Incurred pursuant to clause (iv), (xii) or (xx) of
Section 4.03(b) (provided that in the case of
clause (xx), such Lien does not extend to the property or assets of any
Subsidiary of the Company other than a Foreign Subsidiary);

(7)           Liens existing on
the Issue Date;

(8)           Liens on assets,
property or shares of stock of a Person at the time such Person becomes a
Subsidiary; provided, however,
that 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 Restricted Subsidiary of the Company);

(9)           Liens on assets or
property at the time the Company or a Restricted Subsidiary of the Company
acquired the assets or property, including any acquisition by means of a
merger, amalgamation or consolidation with or into the Company or any
Restricted Subsidiary of the Company; 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
Restricted Subsidiary of the Company;

 

24

 

(10)         Liens securing
Indebtedness or other obligations of a Restricted Subsidiary owing to the
Company or another Restricted Subsidiary of the Company permitted to be
Incurred in accordance with Section 4.03;

(11)         Liens securing
Hedging Obligations not incurred in violation of this Indenture; provided that with respect to Hedging
Obligations relating to Indebtedness, such Lien extends only to the property
securing such Indebtedness;

(12)         Liens on specific
items of inventory or 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;

(13)         leases and subleases
of real property which do not materially interfere with the ordinary conduct of
the business of the Company or any of its Restricted Subsidiaries;

(14)         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;

(15)         Liens in favor of the
Company or any Guarantor;

(16)         Liens on accounts
receivable and related assets of the type specified in the definition of “Receivables
Financing” Incurred in connection with a Qualified Receivables Financing;

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

(18)         Liens on the Equity
Interests of Unrestricted Subsidiaries;

(19)         grants of software
and other technology licenses in the ordinary course of business;

(20)         Liens to secure any
refinancing, refunding, extension, renewal or replacement (or successive
refinancings, refundings, extensions, renewals or replacements) as a whole, or
in part, of any Indebtedness secured by any Lien referred to in the foregoing
clauses (6)(B), (7), (8), (9), (10), (11) and (15); provided,
however, that (x) 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 (y) the Indebtedness secured by such
Lien at such time is not increased to any amount greater than the sum of (A)
the outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clauses (6)(B), (7), (8), (9), (10), (11) and (15)
at the time the original Lien became a Permitted Lien under this Indenture, and
(B) an amount necessary to pay any fees and expenses, including premiums,
related to such refinancing, refunding, extension, renewal or replacement;

 

25

 

(21)         Liens on equipment of
the Company or any Restricted Subsidiary granted in the ordinary course of
business to the Company’s or such Restricted Subsidiary’s client at which such
equipment is located; and

(22)         judgment and
attachment Liens not giving rise to an Event of Default and notices of lis
pendens and associated rights related to litigation being contested in good
faith by appropriate proceedings and for which adequate reserves have been
made;

(23)         Liens arising out of
conditional sale, title retention, consignment or similar arrangements for the
sale of goods entered into in the ordinary course of business;

(24)         Liens incurred to
secure cash management services in the ordinary course of business; and

(25)         other Liens securing
obligations incurred in the ordinary course of business which obligations do
not exceed $20 million at any one time outstanding.

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

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

“Purchase
Money Note” means a promissory note of a Receivables Subsidiary
evidencing a line of credit, which may be irrevocable, from the Company or any
Subsidiary of the Company to a Receivables Subsidiary in connection with a
Qualified Receivables Financing, which note is intended to finance that portion
of the purchase price that is not paid by cash or a contribution of equity.

“Qualified
Receivables Financing” means any Receivables Financing of a Receivables
Subsidiary that meets the following conditions:

(1)           the Board of
Directors of the Company shall have determined in good faith that such
Qualified Receivables Financing (including financing terms, covenants,
termination events and other provisions) is in the aggregate economically fair
and reasonable to the Company and the Receivables Subsidiary;

(2)           all sales of
accounts receivable and related assets to the Receivables Subsidiary are made
at Fair Market Value (as determined in good faith by the Company); and

(3)           the financing terms,
covenants, termination events and other provisions thereof shall be market
terms (as determined in good faith by the Company) and may include Standard
Securitization Undertakings.

 

26

 

The grant of a security interest in any accounts
receivable of the Company or any of its Restricted Subsidiaries (other than a
Receivables Subsidiary) to secure Bank Indebtedness shall not be deemed a
Qualified Receivables Financing.

“Rating Agency” means (1) each of Moody’s and S&P
and (2) if Moody’s or S&P ceases to rate the Securities for reasons outside
of the Issuers’ control, a “nationally recognized statistical rating
organization” within the meaning of Rule 15cs-1(c)(2)(vi)(F) under the Exchange
Act selected by the Issuers or any direct or indirect parent of the Issuers as
a replacement agency for Moody’s or S&P, as the case may be.

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

“Receivables
Financing” means any transaction or series of transactions that may be
entered into by the Company or any of its Subsidiaries pursuant to which the
Company or any of its Subsidiaries may sell, convey or otherwise transfer to
(a) a Receivables Subsidiary (in the case of a transfer by the Company or any of
its Subsidiaries); and (b) any other Person (in the case of a transfer by a
Receivables Subsidiary), or may grant a security interest in, any accounts
receivable (whether now existing or arising in the future) of the Company or
any of its Subsidiaries, and any assets related thereto including, without
limitation, all collateral securing such accounts receivable, all contracts and
all guarantees or other obligations in respect of such accounts receivable,
proceeds of such accounts receivable and other assets which are customarily
transferred or in respect of which security interests are customarily granted
in connection with asset securitization transactions involving accounts
receivable and any Hedging Obligations entered into by the Company or any such
Subsidiary in connection with such accounts receivable.

“Receivables
Repurchase Obligation” means any obligation of a seller of receivables
in a Qualified Receivables Financing to repurchase receivables arising as a
result of a breach of a representation, warranty or covenant or otherwise,
including as a result of a receivable or portion thereof becoming subject to
any asserted defense, dispute, off-set or counterclaim of any kind as a result
of any action taken by, any failure to take action by or any other event
relating to the seller.

“Receivables
Subsidiary” means a Wholly Owned Restricted Subsidiary of the Company
(or another Person formed for the purposes of engaging in Qualified Receivables
Financing with the Company in which the Company or any Subsidiary of the
Company makes an Investment and to which the Company or any Subsidiary of the
Company transfers accounts receivable and related assets) which engages in no
activities other than in connection with the financing of accounts receivable
of the Company and its Subsidiaries, all proceeds thereof and all rights
(contractual or other), collateral and other assets relating thereto, and any
business or activities incidental or related to such business, and which is
designated by the Board of Directors of the Company (as provided below) as a
Receivables Subsidiary and:

 

27

 

(a)           no portion of the
Indebtedness or any other obligations (contingent or otherwise) of which (i) is
guaranteed by the Company or any other Subsidiary of the Company (excluding
guarantees of obligations (other than the principal of and interest on,
Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is
recourse to or obligates the Company or any other Subsidiary of the Company in
any way other than pursuant to Standard Securitization Undertakings, or (iii)
subjects any property or asset of the Company or any other Subsidiary of the
Company, directly or indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to Standard Securitization Undertakings;

(b)           with which neither
the Company nor any other Subsidiary of the Company has any material contract,
agreement, arrangement or understanding other than on terms which the Company
reasonably believes to be no less favorable to the Company or such Subsidiary
than those that might be obtained at the time from Persons that are not
Affiliates of the Company; and

(c)           to which neither the
Company nor any other Subsidiary of the Company has any obligation to maintain
or preserve such entity’s financial condition or cause such entity to achieve
certain levels of operating results.

Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors of the Company
giving effect to such designation and an Officers’ Certificate certifying that
such designation complied with the foregoing conditions.

“Representative”
means the trustee, agent or representative (if any) for an issue of Senior
Indebtedness or Designated Senior Indebtedness, as applicable; provided that if, and for so long as, such Senior
Indebtedness lacks such a Representative, then the Representative for such
Senior Indebtedness shall at all times constitute the holder or holders of a
majority in outstanding principal amount of obligations under such Senior
Indebtedness.

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

“Restricted
Subsidiary” means, with respect to any Person, any Subsidiary of such
Person other than an Unrestricted Subsidiary of such Person.  Rexnord shall be a Restricted Subsidiary of
the Company. Unless otherwise indicated in this Indenture, all references to
Restricted Subsidiaries shall mean Restricted Subsidiaries of the Company.

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

“S&P”
means Standard & Poor’s Ratings Group or any successor to the rating agency
business thereof.

“SEC”
means the Securities and Exchange Commission.

 

28

 

“Secured
Indebtedness” means any Indebtedness secured by a Lien.

“Securities” means the securities issued under this
Indenture.

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

“Senior
Credit Documents” means the collective reference to the Credit
Agreement, any notes issued pursuant thereto and the guarantees thereof, and
the collateral documents relating thereto, as amended, supplemented, restated,
renewed, refunded, replaced, restructured, repaid, refinanced or otherwise
modified from time to time.

“Senior Indebtedness” with respect to the Company or
any of its Restricted Subsidiaries means all Indebtedness and any Receivables
Repurchase Obligation of the Company or any such Restricted Subsidiary,
including interest thereon (including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization relating to the Company or
any Restricted Subsidiary of the Company at the rate specified in the
documentation with respect thereto whether or not a claim for post-filing
interest is allowed in such proceeding) and other amounts (including fees,
expenses, reimbursement obligations under letters of credit and indemnities)
owing in respect thereof, whether outstanding on the Issue Date or thereafter
Incurred, unless in the instrument creating or evidencing the same or pursuant
to which the same is outstanding expressly provides that such obligations are
subordinated in right of payment to any other Indebtedness of the Company or
such Restricted Subsidiary, as applicable; provided, however, that Senior Indebtedness shall not include, as
applicable:

(1)           any obligation of
the Company to any Subsidiary of the Company (other than any Receivables
Repurchase Obligation) or of any Subsidiary of the Company to the Company or
any other Subsidiary of the Company,

(2)           any liability for
Federal, state, local or other taxes owed or owing by the Company or such
Restricted Subsidiary,

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

(4)           any Indebtedness or
obligation of the Company or any Restricted Subsidiary that by its terms is
subordinate or junior in any respect to any other Indebtedness or obligation of
the Company or such Restricted Subsidiary, as applicable, including any Pari
Passu Indebtedness and any Subordinated Indebtedness,

(5)           any obligations with
respect to any Capital Stock, or

(6)           any Indebtedness
Incurred in violation of this Indenture but, as to any such Indebtedness Incurred
under the Credit Agreement, no such violation shall be deemed to exist for
purposes of this clause (6) if the holders of such Indebtedness or their
Representative shall have received an Officers’ Certificate to the effect that
the Incurrence of such Indebtedness does not (or, in the case of a revolving
credit facility 

 

29

 

thereunder, the Incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made would
not) violate this Indenture.

If any Senior Indebtedness is disallowed, avoided or
subordinated pursuant to the provisions of Section 548 of Title 11 of the
United States Code or any applicable state fraudulent conveyance law, such
Senior Indebtedness nevertheless will constitute Senior Indebtedness.

 “Senior Notes”
means the 91⁄2% Senior Notes due 2014 of the Issuers.

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

“Similar
Business” means a business, the majority of whose revenues are derived
from the activities of the Company and its Subsidiaries as of the Issue Date or
any business or activity that is reasonably similar thereto or a reasonable
extension, development or expansion thereof or ancillary thereto.

“Sponsors”
means (1) one or more investment funds controlled by Apollo Management, L.P.
and its Affiliates (collectively, the “Apollo Sponsors”) and (2) any Person
that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2)
of the Exchange Act, or any successor provision) with any Apollo Sponsors, provided that any Apollo Sponsor (x) owns a majority of the
voting power and (y) controls a majority of the Board of Directors of the
Company.

“Standard
Securitization Undertakings” means representations, warranties,
covenants, indemnities and guarantees of performance entered into by the
Company or any Subsidiary of the Company which the Company has determined in
good faith to be customary in a Receivables Financing including without
limitation, those relating to the servicing of the assets of a Receivables
Subsidiary, it being understood that any Receivables Repurchase Obligation
shall be deemed to be a Standard Securitization Undertaking.

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

“Subordinated
Indebtedness” means (a) with respect to either of the Issuers, any
Indebtedness of the Issuer which is by its terms subordinated in right of
payment to the Securities, and (b) with respect to any Guarantor, any
Indebtedness of such Guarantor which is by its terms subordinated in right of
payment to its Guarantee.

“Subsidiary”
means, with respect to any Person, (1) any corporation, association or other
business entity (other than a partnership, joint venture or limited liability
company) 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 

 

30

 

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, and (2) any
partnership, joint venture or limited liability company of which (x) more than
50% of the capital accounts, distribution rights, total equity and voting
interests or general and 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 interests or
otherwise, and (y) such Person or any Subsidiary of such Person is a
controlling general partner or otherwise controls such entity.

“Tax
Distributions” means any distributions described in Section
4.04(b)(xii).

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

“Total Assets”
means the total consolidated assets of the Company and its Restricted
Subsidiaries, as shown on the most recent balance sheet of the Company.

“Transactions”
means the Acquisition and the transactions related thereto, the issuance of the
Securities and Senior Notes, and borrowings made pursuant to the Credit
Agreement on the Issue Date.

“Treasury
Rate” means, as of the applicable 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 such 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 such redemption date to August 1, 2011; provided, however, that
if the period from such redemption date to August 1, 2011 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
Officer” means:

(1)           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

(2)           who shall have
direct responsibility for the administration of this Indenture.

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

 

31

 

 

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

“Unrestricted Subsidiary” means:

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

(2)           any Subsidiary of an
Unrestricted Subsidiary.

The Board of Directors of the Company may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness
of, or owns or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however,
that the Subsidiary to be so designated and its Subsidiaries do not at the time
of designation have and do not thereafter Incur any Indebtedness pursuant to
which the lender has recourse to any of the assets of the Company or any of its
Restricted Subsidiaries; provided, further, however, that
either:

(a)           the Subsidiary to be
so designated has total consolidated assets of $1,000 or less; or

(b)           if such Subsidiary
has consolidated assets greater than $1,000, then such designation would be
permitted under Section 4.04.

The Board of Directors of the Company may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
however, that immediately after giving
effect to such designation:

(x)            (1) the Company
could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.03(a) 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, and

(y)           no Event of Default
shall have occurred and be continuing.

Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by promptly filing with the Trustee a
copy of the resolution of the Board of Directors of the Company giving effect
to such designation and an Officers’ Certificate certifying that such
designation complied with the foregoing provisions.

“U.S. Government Obligations” 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

 

32

 

(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 each case, are not callable or redeemable at
the option of the issuer 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 U.S. Government Obligations or a specific
payment of principal of or interest on any such U.S. Government Obligations
held by such custodian for the account of the holder of such 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 U.S. Government Obligations or the specific payment
of principal of or interest on the U.S. Government Obligations evidenced by
such depository receipt.

“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 or
Disqualified 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 multiplied by the amount of such payment, by (2) the sum of
all such payments.

“Wholly Owned
Restricted Subsidiary” is any Wholly Owned Subsidiary that is a
Restricted Subsidiary.

“Wholly Owned
Subsidiary” of any Person means a Subsidiary of such Person 100% of the
outstanding Capital Stock or other ownership interests of which (other than
directors’ qualifying shares or shares required to be held by Foreign
Subsidiaries) 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

  
	
   

  	
   

  	
   

  
	
  “Additional
  Interest”

  	
   

  	
  Appendix
  A

  
	
  “Affiliate
  Transaction”

  	
   

  	
  4.07

  
	
  “Appendix”

  	
   

  	
  Preamble

  
	
  “Asset Sale Offer”

  	
   

  	
  4.06(b)

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  
	
  “Blockage Notice”

  	
   

  	
  10.03

  
	
  “covenant defeasance option”

  	
   

  	
  8.01(c)

  
	
  “Custodian”

  	
   

  	
  6.01

  
	
  “Definitive Security”

  	
   

  	
  Appendix A

  

 

33

 

	
  “Depository”

  	
   

  	
  Appendix A

  
	
  “Euroclear”

  	
   

  	
  Appendix A

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Excess Proceeds”

  	
   

  	
  4.06(b)

  
	
  “Exchange Securities”

  	
   

  	
  Preamble

  
	
  “Global Securities Legend”

  	
   

  	
  Appendix A

  
	
  “Guarantee Blockage Notice”

  	
   

  	
  12.03

  
	
  “Guarantee Payment Blockage Period”

  	
   

  	
  12.03

  
	
  “Guaranteed Obligations”

  	
   

  	
  11.01(a)

  
	
  “IAI”

  	
   

  	
  Appendix A

  
	
  “incorporated provision”

  	
   

  	
  13.01

  
	
  “Initial Purchasers”

  	
   

  	
  Appendix A

  
	
  “Initial Securities”

  	
   

  	
  Preamble

  
	
  “legal defeasance option”

  	
   

  	
  8.01

  
	
  “Notice of Default”

  	
   

  	
  6.01

  
	
  “Offer Period”

  	
   

  	
  4.06(d)

  
	
  “Original Securities”

  	
   

  	
  Preamble

  
	
  “pay its Guarantee”

  	
   

  	
  12.03

  
	
  “pay the Securities”

  	
   

  	
  10.03

  
	
  “Paying Agent”

  	
   

  	
  2.04(a)

  
	
  “Payment Blockage Period”

  	
   

  	
  10.03

  
	
  “protected purchaser”

  	
   

  	
  2.08

  
	
  “Purchase Agreement”

  	
   

  	
  Appendix A

  
	
  “QIB”

  	
   

  	
  Appendix A

  
	
  “Refinancing Indebtedness”

  	
   

  	
  4.03(b)

  
	
  “Refunding Capital Stock”

  	
   

  	
  4.04(b)

  
	
  “Registered Exchange Offer”

  	
   

  	
  Appendix A

  
	
  “Registration Agreement”

  	
   

  	
  Appendix A

  
	
  “Registrar”

  	
   

  	
  2.04(a)

  
	
  “Regulation S”

  	
   

  	
  Appendix A

  
	
  “Regulation S Securities”

  	
   

  	
  Appendix A

  
	
  “Restricted Payment”

  	
   

  	
  4.04(a)

  
	
  “Restricted Period”

  	
   

  	
  Appendix A

  
	
  “Restricted Securities Legend”

  	
   

  	
  Appendix A

  
	
  “Retired Capital Stock”

  	
   

  	
  4.04(b)

  
	
  “Rule 501”

  	
   

  	
  Appendix A

  
	
  “Rule 144A”

  	
   

  	
  Appendix A

  
	
  “Rule 144A Securities”

  	
   

  	
  Appendix A

  
	
  “Securities Custodian”

  	
   

  	
  Appendix A

  
	
  “Shelf Registration Statement”

  	
   

  	
  Appendix A

  
	
  “Successor Company”

  	
   

  	
  5.01(a)

  
	
  “Successor Guarantor”

  	
   

  	
  5.01(b)

  
	
  “Transfer”

  	
   

  	
  5.01(b)

  

 

34

 

	
  “Transfer Restricted Securities”

  	
   

  	
  Appendix A

  
	
  “Unrestricted Definitive Security

  	
   

  	
  Appendix A

  
	
   

  	
   

  	
   

  

SECTION 1.03.      Incorporation
by Reference of Trust Indenture Act. This Indenture incorporates by
reference certain provisions of the TIA. The following TIA terms have the
following meanings:

“Commission” means the SEC.

“indenture securities” means the Securities and the
Guarantees.

“indenture security holder” means a Holder.

“indenture to be qualified” means this Indenture.

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

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

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

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

(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)           “including” means including without
limitation;

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

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

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

 

35

 

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

(i)            unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required
to be delivered hereunder shall be prepared in accordance with GAAP;

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

(k)           whenever in this Indenture or the
Securities there is mentioned, in any context, principal, interest or any other
amount payable under or with respect to any Securities, such mention shall be
deemed to include mention of the payment of Additional Interest, to the extent
that, in such context, Additional Interest are, were or would be payable in
respect thereof.

ARTICLE 2

THE SECURITIES

SECTION 2.01.      Amount
of Securities. The aggregate principal amount of Original Securities which
may be authenticated and delivered under this Indenture on the Issue Date is
$300,000,000. All Securities shall be substantially identical except as to
denomination.

The Company may from time to time after the Issue Date
issue Additional Securities under this Indenture in an unlimited principal
amount, so long as (i) the Incurrence of the Indebtedness represented by such
Additional Securities is at such time permitted by Section 4.03 and (ii) such
Additional Securities are issued in compliance with the other applicable
provisions of this Indenture. With respect to any Additional Securities issued
after the Issue Date (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities pursuant to Section 2.07, 2.08, 2.09, 2.10, 3.06, 4.06(g), 4.08(c)
or the Appendix), there shall be (a) established in or pursuant to a resolution
of the Board of Directors and (b) (i) set forth or determined in the manner
provided in an Officers’ Certificate or (ii) established in one or more
indentures supplemental hereto, prior to the issuance of such Additional
Securities:

(1)           the aggregate principal amount of
such Additional Securities which may be authenticated and delivered under this
Indenture,

(2)           the issue price and issuance date of
such Additional Securities, including the date from which interest on such
Additional Securities shall accrue;

(3)           if applicable, that such Additional
Securities shall be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the respective depositaries for such
Global Securities, the form of any legend or legends which shall be 

 

36

 

borne by such Global
Securities in addition to or in lieu of those set forth in Exhibit A hereto and
any circumstances in addition to or in lieu of those set forth in Section 2.2
of the Appendix in which any such Global Security may be exchanged in whole or
in part for Additional Securities registered, or any transfer of such Global
Security in whole or in part may be registered, in the name or names of Persons
other than the depositary for such Global Security or a nominee thereof; and

(4)           if applicable, that such Additional
Securities that are not Transfer Restricted Securities shall not be issued in
the form of Initial Securities as set forth in Exhibit A, but shall be issued
in the form of Exchange Securities as set forth in Exhibit B.

If any of the terms of any Additional Securities are
established by action taken pursuant to a resolution of the Board of Directors,
a copy of an appropriate record of such action shall be certified by the
Secretary or any Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Officers’ Certificate or the
indenture supplemental hereto setting forth the terms of the Additional
Securities.

The Securities, including any Additional Securities,
shall be treated as a single class for all purposes under this Indenture,
including, without limitation, waivers, amendments, redemptions and offers to
purchase.

SECTION 2.02.      Form
and Dating. Provisions relating to the Initial Securities and the Exchange
Securities are set forth in the Appendix, which is hereby incorporated in and
expressly made a part of this Indenture. The (i) Initial Securities and the
Trustee’s certificate of authentication and (ii) any Additional Securities (if
issued as Transfer Restricted Securities) and the Trustee’s certificate of
authentication shall each be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
(i) Exchange Securities and the Trustee’s certificate of authentication and
(ii) any Additional Securities issued other than as Transfer Restricted Securities
and the Trustee’s certificate of authentication shall each be substantially in
the form of Exhibit B hereto, which is hereby incorporated in and expressly
made a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company or any Guarantor is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company). Each
Security shall be dated the date of its authentication. The Securities shall be
issuable only in registered form without interest coupons and in denominations
of $2,000 and any integral multiples of $1,000.

SECTION 2.03.      Execution
and Authentication. The Trustee shall authenticate and make available for
delivery upon a written order of the Issuer signed by one Officer (a) Original
Securities for original issue on the date hereof in an aggregate principal
amount of $300,000,000, (b) subject to the terms of this Indenture, Additional
Securities in an aggregate principal amount to be determined at the time of
issuance and specified therein and (c) the Exchange Securities for issue in a
Registered Exchange Offer pursuant to the Registration Agreement for a like
principal amount of Initial Securities exchanged pursuant thereto or otherwise
pursuant to an effective registration statement under the Securities Act. Such
order shall specify the amount of the Securities to be authenticated, the date
on which the original issue of Securities is to be authenticated and whether
the Securities are to be Initial Securities or 

 

37

 

Exchange Securities. Notwithstanding
anything to the contrary in the Indenture or the Appendix, any issuance of
Additional Securities after the Issue Date shall be in a principal amount of at
least $2,000 and integral multiples of $1,000 in excess of $2,000.

One Officer shall sign the Securities for the Issuer
by manual or facsimile signature.

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

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

The Trustee may appoint one or more authenticating
agents reasonably acceptable to the Issuer to authenticate the Securities. Any
such appointment shall be evidenced by an instrument signed by a Trust Officer,
a copy of which shall be furnished to the Issuer. Unless limited by the terms
of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or
agent for service of notices and demands.

SECTION 2.04.      Registrar
and Paying Agent. (a) The Company shall maintain (i) an office or agency
where Securities may be presented for registration of transfer or for exchange
(the “Registrar”) and (ii) an office or agency where Securities may be
presented for payment (the “Paying Agent”). The Registrar shall keep a register
of the Securities and of their transfer and exchange. The Company may have one
or more co-registrars and one or more additional paying agents. The term “Registrar”
includes any co-registrars. The term “Paying Agent” includes the Paying Agent
and any additional paying agents. The Company initially appoints the Trustee as
Registrar, Paying Agent and the Securities Custodian with respect to the Global
Securities.

(b)           The Company may enter into an appropriate agency agreement
with any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall
be entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically organized Wholly Owned Subsidiaries may act
as Paying Agent or Registrar.

(c)           The Company may remove any Registrar or Paying Agent upon
written notice to such Registrar or Paying Agent and to the Trustee; provided, however,
that no such removal shall become effective until (i) if applicable, acceptance
of an appointment by a successor as evidenced by an appropriate agreement
entered into by the Company and such successor Registrar or Paying Agent, as
the case may be, and delivered to the Trustee or (ii) notification to the Trustee
that the Trustee shall serve as Registrar or Paying Agent until the appointment
of a successor in accordance with clause (i) above. The Registrar or Paying
Agent 

 

38

 

may resign at any time upon
written notice to the Company and the Trustee; provided,
however, that the Trustee may
resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee
in accordance with Section 7.08.

SECTION 2.05.      Paying
Agent to Hold Money in Trust. Prior to each due date of the principal of
and interest on any Security, the Company shall deposit with each Paying Agent
(or if the Company or a Wholly Owned Subsidiary is acting as Paying Agent,
segregate and hold in trust for the benefit of the Persons entitled thereto) a
sum sufficient to pay such principal and interest when so becoming due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that a Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by a Paying Agent for the payment of principal of
and interest on the Securities, and shall notify the Trustee of any default by
the Company in making any such payment. If the Company or a Wholly Owned
Subsidiary of the Company acts as Paying Agent, it shall segregate the money
held by it as Paying Agent and hold it in trust for the benefit of the Persons
entitled thereto. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and to account for any funds disbursed by such
Paying Agent. Upon complying with this Section, a Paying Agent shall have no
further liability for the money delivered to the Trustee.

SECTION 2.06.      Holder
Lists. The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish, or
cause the Registrar to furnish, to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders.

SECTION 2.07.      Transfer
and Exchange. The Securities shall be issued in registered form and shall
be transferable only upon the surrender of a Security for registration of
transfer and in compliance with the Appendix. When a Security is presented to
the Registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if its requirements therefor are met. When Securities
are presented to the Registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar’s request. The Company
may require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any transfer or exchange pursuant to
this Section. The Company shall not be required to make, and the Registrar need
not register, transfers or exchanges of Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed) or of any Securities for a period of 15 days before a
selection of Securities to be redeemed.

Prior to the due presentation for registration of transfer
of any Security, the Company, the Guarantors, the Trustee, the Paying Agent and
the Registrar may deem and treat the Person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest, if any, on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none of
the Company, 

 

39

 

any Guarantor, the Trustee, the Paying Agent or the Registrar
shall be affected by notice to the contrary.

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

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

SECTION 2.08.      Replacement
Securities. If a mutilated Security is surrendered to the Registrar or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the requirements of Section 8-405 of the Uniform
Commercial Code are met, such that the Holder (a) satisfies the Company or the
Trustee within a reasonable time after such Holder has notice of such loss,
destruction or wrongful taking and the Registrar does not register a transfer
prior to receiving such notification, (b) makes such request to the Company or
the Trustee prior to the Security being acquired by a protected purchaser as
defined in Section 8-303 of the Uniform Commercial Code (a “protected
purchaser”) and (c) satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Trustee or the Company to
protect the Company, the Trustee, a Paying Agent and the Registrar from any
loss that any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security
(including without limitation, attorneys’ fees and disbursements in replacing
such Security). In the event any such mutilated, lost, destroyed or wrongfully
taken Security has become or is about to become due and payable, the Company in
its discretion may pay such Security instead of issuing a new Security in
replacement thereof.

Every replacement Security is an additional obligation
of the Company.

The provisions of this Section 2.08 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.

SECTION 2.09.  Outstanding
Secrets. Securities outstanding at any time are all Securities
authenticated by the Trustee except for those canceled by it, those delivered
to it for cancellation and those described in this Section as not outstanding. Subject
to Section 13.06, a Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security.

If a Security is replaced pursuant to Section 2.08
(other than a mutilated Security surrendered for replacement), it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a protected purchaser. A 

 

40

 

mutilated Security ceases to be outstanding upon
surrender of such Security and replacement thereof pursuant to Section 2.08.

If a Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and no Paying Agent is prohibited from paying such money to the Holders
on that date pursuant to the terms of this Indenture, then on and after that
date such Securities (or portions thereof) cease to be outstanding and interest
on them ceases to accrue.

SECTION 2.10.      Temporary
Securities. In the event that Definitive Securities are to be issued under
the terms of this Indenture, until such Definitive Securities are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities and make
them available for delivery in exchange for temporary Securities upon surrender
of such temporary Securities at the office or agency of the Company, without
charge to the Holder. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as Definitive Securities.

SECTION 2.11.      Cancellation.
The Company at any time may deliver Securities to the Trustee for cancellation.
The Registrar and each Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Securities surrendered for
registration of transfer, exchange, payment or cancellation and shall dispose
of canceled Securities in accordance with its customary procedures. The Company
may not issue new Securities to replace Securities it has redeemed, paid or
delivered to the Trustee for cancellation. The Trustee shall not authenticate
Securities in place of canceled Securities other than pursuant to the terms of
this Indenture.

SECTION 2.12.      Defaulted
Interest. If the Company defaults in a payment of interest on the
Securities, the Company shall pay the defaulted interest then borne by the
Securities (plus interest on such defaulted interest to the extent lawful) in
any lawful manner. The Company may pay the defaulted interest to the Persons
who are Holders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail or cause to be
mailed to each affected Holder a notice that states the special record date,
the payment date and the amount of defaulted interest to be paid.

SECTION 2.13.      CUSIP
Numbers, ISINs, etc. The Issuer in issuing the Securities may use CUSIP
numbers, ISINs and “Common Code” numbers (if then generally in use) and, if so,
the Trustee shall use CUSIP numbers, ISINs and “Common Code” numbers in notices
of redemption as a convenience to Holders; provided,
however, that any such notice may
state that no representation is made as to the correctness of such numbers,
either as printed on the Securities or as contained in any notice of a
redemption that reliance may be placed only on the other identification numbers
printed on the Securities and that any such redemption shall not be 

 

41

 

affected by any defect in
or omission of such numbers. The Issuer shall advise the Trustee of any change
in the CUSIP numbers, ISINs and “Common Code” numbers.

SECTION 2.14.      Calculation
of Principal Amount of Securities. The aggregate principal amount of the
Securities, at any date of determination, shall be the principal amount of the
Securities at such date of determination. With respect to any matter requiring
consent, waiver, approval or other action of the Holders of a specified
percentage of the principal amount of all the Securities, such percentage shall
be calculated, on the relevant date of determination, by dividing (a) the
principal amount, as of such date of determination, of Securities, the Holders
of which have so consented, by (b) the aggregate principal amount, as of such
date of determination, of the Securities then outstanding, in each case, as
determined in accordance with the preceding sentence, Section 2.09 and Section
13.06 of this Indenture. Any such calculation made pursuant to this Section
2.14 shall be made by the Company and delivered to the Trustee pursuant to an
Officers’ Certificate.

ARTICLE 3

REDEMPTION

SECTION 3.01.      Redemption.
The Securities may be redeemed, in whole, or from time to time in part, subject
to the conditions and at the redemption prices set forth in Paragraph 5 of the
form of Securities set forth in Exhibit A and Exhibit B hereto, which are
hereby incorporated by reference and made a part of this Indenture, together
with accrued and unpaid interest to the redemption date.

SECTION 3.02.      Applicability
of Article. Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall
be made in accordance with such provision and this Article.

SECTION 3.03.      Notices
to Trustee. If the Company elects to redeem Securities pursuant to the
optional redemption provisions of Paragraph 5 of the Security, it shall notify
the Trustee in writing of (i) the Section of this Indenture pursuant to which
the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Securities to be redeemed and (iv) the redemption price. The Company
shall give notice to the Trustee provided for in this paragraph at least 30
days but not more than 60 days before a redemption date if the redemption is
pursuant to Paragraph 5 of the Security, unless a shorter period is acceptable
to the Trustee. Such notice shall be accompanied by an Officers’ Certificate
and Opinion of Counsel from the Company to the effect that such redemption will
comply with the conditions herein. If fewer than all the Securities are to be
redeemed, the record date relating to such redemption shall be selected by the
Company and given to the Trustee, which record date shall be not fewer than 15
days after the date of notice to the Trustee. Any such notice may be canceled
at any time prior to notice of such redemption being mailed to any Holder and
shall thereby be void and of no effect.

SECTION 3.04.      Selection
of Securities to Be Redeemed. In the case of any partial redemption,
selection of the Securities for redemption will be made by the Trustee on a pro
rata basis to the extent practicable; provided
that no Securities of $2,000 or less shall be redeemed in part. The Trustee
shall make the selection from outstanding Securities not 

 

42

 

previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $2,000. Securities and portions
of them the Trustee selects shall be in amounts of $2,000 or any integral
multiple of $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.

SECTION 3.05.      Notice
of Optional Redemption. (a) At least 30 days but not more than 60 days
before a redemption date pursuant to Paragraph 5 of the Security, the Company
shall mail or cause to be mailed by first-class mail a notice of redemption to
each Holder whose Securities are to be redeemed.

Any such notice shall identify the Securities to be
redeemed and shall state:

(i)          the redemption date;

(ii)         the redemption price
and the amount of accrued interest to the redemption date;

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

(iv)       that Securities called
for redemption must be surrendered to the Paying Agent to collect the
redemption price, plus accrued interest;

(v)        if fewer than all the
outstanding Securities are to be redeemed, the certificate numbers and
principal amounts of the particular Securities to be redeemed, the aggregate
principal amount of Securities to be redeemed and the aggregate principal
amount of Securities to be outstanding after such partial redemption;

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

(vii)      the CUSIP number, ISIN
and/or “Common Code” number, if any, printed on the Securities being redeemed;
and

(viii)     that no representation
is made as to the correctness or accuracy of the CUSIP number or ISIN and/or “Common
Code” number, if any, listed in such notice or printed on the Securities.

(b)           At the Company’s request, the Trustee shall give the
notice of redemption in the Company’s name and at the Company’s expense. In
such event, the Company shall provide the Trustee with the information required
by this Section at least one Business Day prior to the date such notice is to
be provided to Holders and such notice may not be canceled.

SECTION 3.06.      Effect
of Notice of Redemption. Once notice of redemption is mailed in accordance
with Section 3.05, Securities called for redemption become due and 

 

43

 

payable on the redemption
date and at the redemption price stated in the notice, except as provided in
the final sentence of paragraph 5 of the Securities. Upon surrender to the
Paying Agent, such Securities shall be paid at the redemption price stated in
the notice, plus accrued interest, to, but not including, the redemption date; provided, however,
that if the redemption date is after a regular record date and on or prior to
the interest payment date, the accrued interest shall be payable to the Holder
of the redeemed Securities registered on the relevant record date. Failure to
give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.

SECTION 3.07.      Deposit
of Redemption Price. With respect to any Securities, prior to 10:00 a.m.,
New York City time, on the redemption date, the Company shall deposit with the
Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying
Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued interest on all Securities or portions thereof
to be redeemed on that date other than Securities or portions of Securities
called for redemption that have been delivered by the Company to the Trustee
for cancellation. On and after the redemption date, interest shall cease to
accrue on Securities or portions thereof called for redemption so long as the
Company has deposited with the Paying Agent funds sufficient to pay the
principal of, plus accrued and unpaid interest on, the Securities to be
redeemed, unless the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture.

SECTION 3.08.      Securities
Redeemed in Part. Upon surrender of a Security that is redeemed in part,
the Company shall execute and the Trustee shall authenticate for the Holder (at
the Company’s expense) a new Security equal in principal amount to the
unredeemed portion of the Security surrendered.

ARTICLE 4

COVENANTS

SECTION 4.01.      Payment
of Securities. The Company shall promptly pay the principal of and interest
on the Securities on the dates and in the manner provided in the Securities and
in this Indenture. An installment of principal of or interest shall be
considered paid on the date due if on such date the Trustee or the Paying Agent
holds as of 12:00 p.m. Eastern time money sufficient to pay all principal and
interest then due and the Trustee or the Paying Agent, as the case may be, is
not prohibited from paying such money to the Holders on that date pursuant to
the terms of this Indenture.

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

SECTION 4.02.      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 

 

44

 

Company shall file with
the SEC (and provide the Trustee and Holders with copies thereof, without cost
to each Holder, within 15 days after it files them with the SEC),

(i)    within 90 days after the end of each fiscal
year (or such shorter period as may be required by the SEC), annual reports on
Form 10-K (or any successor or comparable form) containing the information
required to be filed therein (or required in such successor or comparable
form),

(ii)   within 45 days after the end of each of the
first three fiscal quarters of each fiscal year (or such shorter period as may
be required by the SEC), reports on Form 10-Q (or any successor or comparable
form) containing the information required to be filed therein (or required in
such successor or comparable form),

(iii)  promptly from time to time after the
occurrence of an event required to be therein reported (and in any event within
the time period specified for filing current reports on Form 8-K by the SEC),
such other reports on Form 8-K (or any successor or comparable form), and

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

provided, however, 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 Securities, including
by posting such reports on the primary website of the Company or its
Subsidiaries in addition to providing such information to the Trustee and the
Holders, 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.

(b)           In the event that:

(i)    the rules and regulations of the SEC permit
the Company and any direct or indirect parent of the Company to report at such
parent entity’s level on a consolidated basis and

(ii)   such parent entity of the Company is not
engaged in any business in any material respect other than incidental to its
ownership, directly or indirectly, of the capital stock of the Company,

such consolidated
reporting at such parent entity’s level in a manner consistent with that described
in this Section 4.02 for the Company shall satisfy this Section 4.02.

(c)           The Company shall make such
information available to prospective investors upon request. In addition, the
Company shall, for so long as any Securities remain outstanding during any
period when it is not subject to Section 13 or 15(d) of the Exchange Act, or
otherwise permitted to furnish the SEC with certain information pursuant to
Rule 12g3-2(b) of the Exchange Act, furnish to the Holders of the Securities 

 

45

 

and to prospective
investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.

Notwithstanding the foregoing, the Company will be
deemed to have furnished such reports referred to above to the Trustee and the
Holders if the Company has filed such reports with the SEC via the EDGAR filing
system and such reports are publicly available. In addition, such requirements
shall be deemed satisfied prior to the commencement of the exchange offer
contemplated by the Registration Agreement relating to the Securities or the
effectiveness of the shelf registration statement by the filing with the SEC of
the Exchange Offer Registration Statement and/or shelf registration statement
in accordance with the provisions of such registration rights agreement, and
any amendments thereto and such registration statement and/or amendments
thereto are filed at times that otherwise satisfy the time requirements set
forth in Section 4.02(a).

In the event that any direct or indirect parent of the
Company is or becomes a Guarantor of the Securities, the Company may satisfy
its obligations under this Section 4.02 with respect to financial information
relating to the Company by furnishing financial information relating to such
direct or indirect parent; provided
that the same is accompanied by consolidating information that explains in
reasonable detail the differences between the information relating to such
direct or indirect parent and any of its Subsidiaries other than the Company
and its Subsidiaries, on the one hand, and the information relating to the
Company, the Guarantors and the other Subsidiaries of the Company on a
standalone basis, on the other hand.

SECTION 4.03.      Limitation
on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock. (a) (i) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness
(including Acquired Indebtedness) or issue any shares of Disqualified Stock;
and (ii) the Company shall not permit any of its Restricted Subsidiaries (other
than a Guarantor) to issue any shares of Preferred Stock; provided, however, that the Company and any Restricted Subsidiary
that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including
Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted
Subsidiary may issue shares of Preferred Stock, in each case if the Fixed
Charge Coverage Ratio of the Company for the most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is
Incurred or such Disqualified Stock or Preferred Stock is issued would have
been at least 2.00 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 limitations set forth in Section
4.03(a) shall not apply to:

(i)    the Incurrence by the
Company or its Restricted Subsidiaries of Indebtedness under the Credit
Agreement 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 of $805 million outstanding at any one time;

 

46

 

(ii)   the Incurrence by the Issuers and the
Guarantors of Indebtedness represented by (i) the Original Securities (not
including any Additional Securities) and the Guarantees, as applicable
(including the Exchange Securities and guarantees thereof) and (ii) the Senior
Notes (not including any additional Senior Notes) and the related guarantees
thereof (including exchange Senior Notes and related guarantees thereof);

(iii)  Indebtedness existing on the Issue Date (other
than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b));

(iv)  (a) Indebtedness (including Capitalized Lease
Obligations) Incurred by the Company or any of its Restricted Subsidiaries,
Disqualified Stock issued by the Company or any of its Restricted Subsidiaries
and Preferred Stock issued by any Restricted Subsidiaries of the Company to
finance (whether prior to or within 270 days after) the purchase, lease,
construction or improvement of property (real or personal) or equipment (whether
through the direct purchase of assets or the Capital Stock of any Person owning
such assets (but no other material assets)) and (b) Acquired Indebtedness; in
an aggregate principal amount which, when aggregated with the principal amount
of all other Indebtedness, Disqualified Stock and Preferred Stock then
outstanding that was Incurred pursuant to this clause (iv), does not exceed the
greater of $75.0 million and 4.0% of Total Assets at the time of Incurrence;

(v)   Indebtedness Incurred by the Company or any
of its Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit and bank guarantees issued in the ordinary course
of business, including without limitation letters of credit in respect of
workers’ compensation claims, health, disability or other benefits to employees
or former employees or their families or property, casualty or liability
insurance or self-insurance, or other Indebtedness with respect to
reimbursement type obligations regarding workers’ compensation claims;

(vi)  Indebtedness arising from agreements of the
Company or a Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, Incurred in connection
with the Transactions or any other acquisition or disposition of any business,
assets or a Subsidiary of the Company in accordance with the terms of this
Indenture, other than guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Subsidiary for the
purpose of financing such acquisition;

(vii)     Indebtedness of the
Company to a Restricted Subsidiary; provided that
any such Indebtedness owed to a Restricted Subsidiary that is not a Guarantor
is subordinated in right of payment to the obligations of the Company under the
Securities; provided, further, 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 Indebtedness (except to the Company or
another Restricted Subsidiary) shall be deemed, in each case, to be an
Incurrence of such Indebtedness;

 

47

 

(viii)    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
Restricted Subsidiary that holds such shares of Preferred Stock of another 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 shares of Preferred Stock;

(ix)   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 a Guarantor such Indebtedness is subordinated in right of payment to the
Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any Restricted Subsidiary
holding such Indebtedness 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;

(x)    Hedging Obligations that are not incurred
for speculative purposes and either: (1) for the purpose of fixing or
hedging interest rate risk with respect to any Indebtedness that is permitted
by the terms of this Indenture to be outstanding; (2) for the purpose of fixing
or hedging currency exchange rate risk with respect to any currency exchanges;
or (3) for the purpose of fixing or hedging commodity price risk with respect
to any commodity purchases or sales;

(xi)   obligations (including reimbursement
obligations with respect to letters of credit and bank guarantees) in respect of
performance, bid, appeal and surety bonds and completion guarantees provided by
the Company or any Restricted Subsidiary in the ordinary course of business;

(xii)      Indebtedness or
Disqualified Stock of the Company or any Restricted Subsidiary of the Company
and Preferred Stock of any Restricted Subsidiary of the Company not otherwise
permitted hereunder in an aggregate principal amount, which when aggregated
with the principal amount or liquidation preference of all other Indebtedness,
Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant
to this clause (xii), does not exceed $100.0 million at any one time
outstanding (it being understood that any Indebtedness Incurred under this
clause (xii) shall cease to be deemed Incurred or outstanding for purposes of
this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a)
from and after the first date on which the Company, or the Restricted
Subsidiary, as the case may be, could have Incurred such Indebtedness under
Section 4.03(a) without reliance upon this clause (xii));

(xiii)     any guarantee by the
Company or a Guarantor of Indebtedness or other obligations of the Company or
any of its Restricted Subsidiaries so long as the Incurrence of such
Indebtedness Incurred by the Company or such Restricted Subsidiary is permitted
under the terms of this Indenture; provided that
if such 

 

48

 

Indebtedness
is by its express terms subordinated in right of payment to the Securities or
the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee
of such Guarantor with respect to such Indebtedness shall be subordinated in
right of payment to such Guarantor’s Guarantee with respect to the Securities
substantially to the same extent as such Indebtedness is subordinated to the
Securities or the Guarantee of such Restricted Subsidiary, as applicable;

(xiv)    the Incurrence by the
Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified
Stock or Preferred Stock of a Restricted Subsidiary of the Company which serves
to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock
or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii),
(iii), (iv), (xiv), (xv), (xix) and (xx) of this Section 4.03(b) or any
Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or
refinance such Indebtedness, Disqualified Stock or Preferred Stock, including
any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay
premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity;
provided, however,
that such Refinancing Indebtedness:

(1)           has a Weighted Average Life to
Maturity at the time such Refinancing Indebtedness is Incurred which is not
less than the shorter of (x) the remaining Weighted Average Life to Maturity of
the Indebtedness, Disqualified Stock or Preferred Stock being refunded or
refinanced and (y) the Weighted Average Life to Maturity that would result if
all payments of principal on the Indebtedness, Disqualified Stock and Preferred
Stock being refunded or refinanced that were due on or after the date one year
following the last maturity date of any Securities then outstanding were
instead due on such date one year following the last date of maturity of the
Securities;

(2)           has a Stated Maturity which is not
earlier than the earlier of (x) the Stated Maturity of the Indebtedness being
refunded or refinanced or (y) 91 days following the last maturity date of the
Securities;

(3)           to the extent such Refinancing
Indebtedness refinances (a) Indebtedness equal to or junior to the Securities
or the Guarantee of such Restricted Subsidiary, as applicable, such Refinancing
Indebtedness is equal to or junior, as applicable, to the Securities or the
Guarantee of such Restricted Subsidiary, as applicable, or (b) Disqualified
Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock
or Preferred Stock;

(4)           is Incurred in an aggregate amount
(or if issued with original issue discount, an aggregate issue price) that is
equal to or less than the aggregate amount (or if issued with original issue
discount, the aggregate accreted value) then outstanding of the Indebtedness
being refinanced plus premium, fees and expenses Incurred in connection with
such refinancing;

 

49

 

(5)           shall not include (x) Indebtedness of
a Restricted Subsidiary of the Company that is not a Guarantor that refinances
Indebtedness of the Company or a Restricted Subsidiary that is a Guarantor, or
(y) Indebtedness of the Company or a Restricted Subsidiary that refinances
Indebtedness of an Unrestricted Subsidiary; and

(6)           in the case of any Refinancing
Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv)
or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to
be outstanding under such clause (iv) or (xx) of this Section 4.03(b), as
applicable, and not this clause (xiv) for purposes of determining amounts
outstanding under such clauses (iv) or (xix) of this Section 4.03(b);

provided, further, that
subclauses (1) and (2) of this clause (xiv) shall not apply to any refunding or
refinancing of the Securities or any Senior Indebtedness.

(xv)                 Indebtedness,
Disqualified Stock or Preferred Stock of Persons that are acquired by the
Company or any of its Restricted Subsidiaries or merged or amalgamated into a
Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that
such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in
contemplation of such acquisition, merger or amalgamation or to provide all or
a portion of the funds or credit support required to consummate such
acquisition, merger or amalgamation; provided, further, however, that
after giving effect to such acquisition and the Incurrence of such Indebtedness
either:

(1)           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 the first sentence of Section 4.03(a); or

(2)           the Fixed Charge Coverage Ratio would
be greater than immediately prior to such acquisition;

(xvi)                Indebtedness
Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that
is not recourse to the Company or any Restricted Subsidiary other than a
Receivables Subsidiary (except for Standard Securitization Undertakings);

(xvii)               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 five Business Days of its Incurrence;

(xviii)              Indebtedness
of the Company or any Restricted Subsidiary supported by a letter of credit or
bank guarantee issued pursuant to the Credit Agreement, in a principal amount
not in excess of the stated amount of such letter of credit;

(xix)                 Contribution Indebtedness;

 

50

 

(xx)                  Indebtedness
of Foreign Subsidiaries Incurred for working capital purposes;

(xxi)                 Indebtedness
of the Company or any Restricted Subsidiary consisting of (x) the financing of
insurance premiums or (y) take-or-pay obligations contained in supply
arrangements, in each case, in the ordinary course of business; and

(xxii)                Indebtedness
consisting of customary indemnification, adjustment of purchase price or
similar obligations of the Company or any Restricted Subsidiary, in each case
Incurred in connection with the acquisition or disposition of any assets by the
Company or any Restricted Subsidiary.

                For
purposes of determining compliance with this Section 4.03, in the event that an
item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria
of more than one of the categories of permitted Indebtedness described in
clauses (i) through (xxii) above or is entitled to be Incurred pursuant to
Section 4.03(a), the Issuers shall, in their sole discretion, classify or
reclassify, or later divide, classify or reclassify, such item of Indebtedness
in any manner that complies with this Section 4.03; provided
that all Indebtedness under the Credit Agreement outstanding on the Issue Date
shall be deemed to have been Incurred pursuant to clause (i) of Section 4.03(b)
and the Issuers shall not be permitted to reclassify all or any portion of such
Indebtedness under the Credit Agreement outstanding on the Issue Date. Accrual
of interest, the accretion of accreted value, the payment of interest in the form
of additional Indebtedness with the same terms, the payment of dividends on
Preferred Stock in the form of additional shares of Preferred Stock of the same
class, accretion of original issue discount or liquidation preference and
increases in the amount of Indebtedness outstanding solely as a result of
fluctuations in the exchange rate of currencies shall not be deemed to be an
Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or
obligations in respect of letters of credit relating to, Indebtedness which is
otherwise included in the determination of a particular amount of Indebtedness
shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented
by such guarantee or letter of credit, as the case may be, was in compliance
with this Section 4.03.

                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 or first Incurred
(whichever yields the lower U.S. dollar equivalent), 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 principal amount of such refinancing Indebtedness does not exceed
the principal amount of such Indebtedness being refinanced.

 

51

 

SECTION 4.04.      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
distribution on account of the Company’s or any of its Restricted Subsidiaries’
Equity Interests, including any payment made in connection with any merger,
amalgamation or consolidation involving the Company (other than (A) dividends
or distributions by the Company payable solely in Equity Interests (other than
Disqualified Stock) of the Company; or (B) dividends or distributions by a
Restricted Subsidiary so long as, in the case of any dividend or distribution
payable on or in respect of any class or series of securities issued by a
Restricted Subsidiary other than a Wholly Owned Restricted 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 or otherwise acquire or retire for
value any Equity Interests of the Company or any direct or indirect parent of
the Company;

(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 or scheduled maturity, any Subordinated
Indebtedness of the Company or any of its Restricted Subsidiaries (other than
the payment, redemption, repurchase, defeasance, acquisition or retirement of
(A) Subordinated Indebtedness in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within one
year of the date of such payment, redemption, repurchase, defeasance,
acquisition or retirement and (B) Indebtedness permitted under clauses (vii)
and (ix) of Section 4.03(b)); or

(iv)  make any Restricted Investment

(all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless, at the time of such
Restricted Payment:

(1)           no 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 4.03(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 (i), (iv) (only to the extent of one-half of the
amounts paid pursuant to such clause), (vi) and (viii)of Section 4.04(b), but
excluding all other Restricted Payments permitted by Section 4.04(b)), is less
than the amount equal to the Cumulative Credit.

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

 

52

 

(i)    the payment of any dividend or distribution
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;

(ii)   (A) the repurchase, retirement or other
acquisition of any Equity Interests (“Retired Capital Stock”) of the Company or
any direct or indirect parent of the Company or Subordinated Indebtedness of
the Company, any direct or indirect parent of the Company or any Guarantor in
exchange for, or out of the proceeds of, the substantially concurrent sale of,
Equity Interests of the Company or any direct or indirect parent of the Company
or contributions to the equity capital of the Company (other than any
Disqualified Stock or any Equity Interests sold to a Subsidiary of the Company
or to an employee stock ownership plan or any trust established by the Company
or any of its Subsidiaries) (collectively, including any such contributions, “Refunding
Capital Stock”); and

(B)
the declaration and payment of accrued dividends on the Retired Capital Stock
out of the proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company or to an employee stock ownership plan or any trust
established by the Company or any of its Subsidiaries) of Refunding Capital
Stock;

(iii)  the redemption, repurchase or other
acquisition or retirement of Subordinated Indebtedness of the Company or any
Guarantor made by exchange for, or out of the proceeds of the substantially
concurrent sale of, new Indebtedness of the Company or a Guarantor which is Incurred
in accordance with Section 4.03 so long as

(A)          the principal amount of such new
Indebtedness does not exceed the principal amount of the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired for value
(plus the amount of any premium required to be paid under the terms of the
instrument governing the Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired plus any fees incurred in connection
therewith),

(B)           such Indebtedness is subordinated to
the Securities or the related Guarantee, as the case may be, at least to the
same extent as such Subordinated Indebtedness so purchased, exchanged,
redeemed, repurchased, acquired or retired for value,

(C)           such Indebtedness has a final
scheduled maturity date equal to or later than the earlier of (x) the final
scheduled maturity date of the Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired or (y) 91 days following the maturity date of
the Securities, and

(D)          such Indebtedness has a Weighted
Average Life to Maturity at the time Incurred which is not less than the
shorter of (x) the remaining Weighted Average Life to Maturity of the
Subordinated Indebtedness being so redeemed, repurchased, acquired or retired
and (y) the Weighted Average Life to Maturity 

 

53

 

that would result if all
payments of principal on the Subordinated Indebtedness being redeemed,
repurchased, acquired or retired that were due on or after the date one year
following the last maturity date of any Securities then outstanding were
instead due on such date one year following the last date of maturity of the
Securities;

(iv)  the repurchase, retirement or other
acquisition (or dividends to any direct or indirect parent of the Company to
finance any such repurchase, retirement or other acquisition) for value of
Equity Interests of the Company or any direct or indirect parent of the Company
held by any future, present or former employee, director or consultant of the
Company or any direct or indirect parent of the Company or any Subsidiary of
the Company pursuant to any management equity plan or stock option plan or any
other management or employee benefit plan or other agreement or arrangement; provided, however, that
the aggregate amounts paid under this clause (iv) do not exceed $15.0 million
in any calendar year (with unused amounts in any calendar year being permitted
to be carried over for the two succeeding calendar years subject to a maximum
payment (without giving effect to the following proviso) of $20.0 million in
any calendar year); provided, further, however, that
such amount in any calendar year may be increased by an amount not to exceed:

(A)          the cash proceeds received by the
Company or any of its Restricted Subsidiaries from the sale of Equity Interests
(other than Disqualified Stock) of the Company or any direct or indirect parent
of the Company (to the extent contributed to the Company) to members of
management, directors or consultants of the Company and its Restricted
Subsidiaries or any direct or indirect parent of the Company that occurs after
the Issue Date (provided that the
amount of such cash proceeds utilized for any such repurchase, retirement,
other acquisition or dividend shall not increase the amount available for
Restricted Payments under Section 4.04(a)(3)); plus

(B)           the cash proceeds of key man life
insurance policies received by the Company or any direct or indirect parent of
the Company (to the extent contributed to the Company) or the Company’s Restricted
Subsidiaries after the Issue Date;

provided that the Company may elect to apply all
or any portion of the aggregate increase contemplated by clauses (A) and (B)
above in any calendar year;

(v)   the declaration and payment of dividends or
distributions to holders of any class or series of Disqualified Stock of the
Company or any of its Restricted Subsidiaries issued or incurred in accordance
with Section 4.03;

(vi)  the declaration and payment of dividends or
distributions (a) to holders of any class or series of Designated Preferred
Stock (other than Disqualified Stock) issued after the Issue Date and (b) to
any direct or indirect parent 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 any 

 

54

 

direct
or indirect parent of the Company issued after the Issue Date; provided, however, that,
(A) 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, after giving effect to such issuance (and
the payment of dividends or distributions) on a pro forma basis, the Company
would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (B)
the aggregate amount of dividends declared and paid pursuant to this clause
(vi) does not exceed the net cash proceeds actually received by the Company
from any such sale of Designated Preferred Stock (other than Disqualified
Stock) issued after the Issue Date;

(vii)                 Investments
in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken
together with all other Investments made pursuant to this clause (vii) that are
at that time outstanding, not to exceed $25 million 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);

(viii)                the payment
of dividends on the Company’s common stock (or the payment of dividends to any
direct or indirect parent of the Company, as the case may be, to fund the
payment by such direct or indirect parent of the Company of dividends on such
entity’s common stock) of up to 6% per annum of the net proceeds received by
the Company from any public offering of common stock of the Company or any
direct or indirect parent of the Company;

(ix)   Investments that are made with Excluded
Contributions;

(x)    other Restricted Payments in an aggregate
amount not to exceed $25 million;

(xi)   the distribution, as a dividend or otherwise,
of shares of Capital Stock of, or Indebtedness owed to the Company or a
Restricted Subsidiary of the Company by, Unrestricted Subsidiaries;

(xii)      the payment of
dividends or other distributions to any direct or indirect parent of the
Company in amounts required for such parent to pay federal, state or local
income taxes (as the case may be) imposed directly on such parent to the extent
such income taxes are attributable to the income of the Company and its
Restricted Subsidiaries (including, without limitation, by virtue of such
parent being the common parent of a consolidated or combined tax group of which
the Company and/or its Restricted Subsidiaries are members);

(xiii)         the payment of
dividends, other distributions or other amounts or the making of loans or
advances by the Company, if applicable:

(A)          in amounts required for any direct or
indirect parent of the Company, if applicable, to pay fees and expenses
(including franchise or similar taxes) required to maintain its corporate
existence, customary salary, bonus and other benefits payable to, and
indemnities provided on behalf of, officers and 

 

55

 

employees of any direct
or indirect parent of the Company, if applicable, and general corporate
overhead expenses of any direct or indirect parent of the Company, if
applicable, in each case to the extent such fees and expenses are attributable
to the ownership or operation of the Company, if applicable, and its
Subsidiaries; and

(B)           in amounts required for any direct or
indirect parent of the Company, if applicable, to pay interest and/or principal
on Indebtedness the proceeds of which have been contributed to the Company or
any of its Restricted Subsidiaries and that has been guaranteed by, or is
otherwise considered Indebtedness of, the Company Incurred in accordance with
Section 4.03;

(xiv)                cash dividends or other
distributions on the Company’s Capital Stock used to, or the making of loans to
any direct or indirect parent of the Company to, fund the Transactions and the
payment of fees and expenses incurred in connection with the Transactions or
owed by the Company or any direct or indirect parent of the Company, as the
case may be, or Restricted Subsidiaries of the Company to Affiliates, in each
case to the extent permitted by Section 4.07;

(xv)                 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;

(xvi)                purchases of receivables
pursuant to a Receivables Repurchase Obligation in connection with a Qualified
Receivables Financing and the payment or distribution of Receivables Fees;

(xvii)               payments of cash, or dividends,
distributions or advances by the Company or any Restricted Subsidiary to allow
the payment of cash in lieu of the issuance of fractional shares upon the
exercise of options or warrants or upon the conversion or exchange of Capital
Stock of any such Person;

(xviii)              the repurchase, redemption or
other acquisition or retirement for value of any Subordinated Indebtedness
pursuant to the provisions similar to those described under Sections 4.06 and
4.08; provided that all Securities 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; and

(xix)                 any payments made, including
any such payments made to any direct or indirect parent of the Company to
enable it to make payments, in connection with the consummation of the
Transactions or as contemplated by the Acquisition Documents (other than
payments to any Permitted Holder or any Affiliate thereof);

provided, however, that
at the time of, and after giving effect to, any Restricted Payment permitted
under clauses (vi), (vii), (x) and (xi) of this Section 4.04(b), no Default
shall have occurred and be continuing or would occur as a consequence thereof.

 

56

 

(c)           As of the Issue Date, all of the Company’s Subsidiaries
shall be Restricted Subsidiaries. The Company shall not permit any Unrestricted
Subsidiary to become a Restricted Subsidiary except pursuant to 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 “Investments.”
Such designation shall only be permitted if a Restricted Payment in such amount
would be permitted at such time and if such Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.

SECTION 4.05.      Dividend
and Other Payment Restrictions Affecting Subsidiaries. The Company shall
not, and shall not permit any of its Restricted Subsidiaries 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 to:

(a)           (i) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock; or (2) with respect to any other interest or participation in,
or measured by, its profits; or (ii) pay any Indebtedness owed to the Company
or any of its Restricted Subsidiaries;

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

(c)           sell, lease or transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries; or

(d)           in the case of Rexnord, make any
payments with respect to the Securities;

except in each case for such encumbrances or
restrictions existing under or by reason of:

(1)           contractual encumbrances or
restrictions in effect on the Issue Date, including pursuant to the Credit
Agreement and the other Senior Credit Documents;

(2)           this Indenture and the Securities
(and any Exchange Securities and guarantees thereof) and the indenture relating
to the Senior Notes and the Senior Notes (and any exchange Senior Notes and
guarantees thereof);

(3)           applicable law or any applicable
rule, regulation or order;

(4)           any agreement or other instrument
relating to Indebtedness of a Person acquired by the Company or any Restricted
Subsidiary which was in existence at the time of such acquisition (but not
created in contemplation thereof or to provide all or any portion of the funds
or credit support utilized to consummate such acquisition), which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the property or assets of the Person, so
acquired;

(5)           contracts or agreements for the sale
of assets, including any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for 

 

57

 

the sale or disposition of
the Capital Stock or assets of such Restricted Subsidiary pending the closing
of such sale or disposition;

(6)           Secured Indebtedness otherwise
permitted to be Incurred pursuant to Sections 4.03 and 4.12 that limit the
right of the debtor to dispose of the assets securing such Indebtedness;

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

(8)           customary provisions in joint venture
agreements and other similar agreements entered into in the ordinary course of
business;

(9)           purchase money obligations for
property acquired in the ordinary course of business that impose restrictions
of the nature discussed in clause (c) above on the property so acquired;

(10)         customary provisions contained in
leases, licenses and other similar agreements entered into in the ordinary
course of business that impose restrictions of the type described in clause (c)
above on the property subject to such lease;

(11)         any encumbrance or restriction of a
Receivables Subsidiary effected in connection with a Qualified Receivables
Financing; provided, however, that such restrictions apply only
to such Receivables Subsidiary;

(12)         other Indebtedness, Disqualified Stock
or Preferred Stock of any Restricted Subsidiary of the Company (i) that is a
Guarantor that is Incurred subsequent to the Issue Date pursuant to Section
4.03 or (ii) that is Incurred by a Foreign Subsidiary of the Company subsequent
to the Issue Date pursuant to clause (iv), (xii) or (xx) of Section 4.03(b);

(13)         any Restricted Investment not
prohibited by Section 4.04 and any Permitted Investment; or

(14)         any encumbrances or restrictions of the
type referred to in clauses (a), (b) and (c) above 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 (13) above; provided
that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are, in the
good faith judgment of the Issuers, no more restrictive with respect to such
dividend and other payment restrictions than those contained in the dividend or
other payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing.

For purposes of determining compliance with this
Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or
liquidating distributions prior to dividends or liquidating distributions being
paid on common stock shall not be deemed a restriction on the

 

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 ability to make
distributions on Capital Stock and (ii) the subordination of loans or advances
made to the Company or a Restricted Subsidiary of the Company to other
Indebtedness Incurred by the Company or any such Restricted Subsidiary shall
not be deemed a restriction on the ability to make loans or advances.

SECTION 4.06.      Asset
Sales. (a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) the Company
or any of its Restricted Subsidiaries, 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 Issuers) of the assets sold or
otherwise disposed of, and (y) 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 Equivalents; provided that
the amount of:

(i)    any liabilities (as shown
on the Company’s or such Restricted Subsidiary’s most recent balance sheet or
in the notes thereto) of the Company or any Restricted Subsidiary of the
Company (other than liabilities that are by their terms subordinated to the
Securities or any Guarantee) that are assumed by the transferee of any such
assets,

(ii)   any notes or other
obligations or other securities or assets received by the Company or such
Restricted Subsidiary of the Company from such transferee that are converted by
the Company or such Restricted Subsidiary of the Company into cash within 180
days of the receipt thereof (to the extent of the cash received), and

(iii)  any Designated Non-cash
Consideration received by the Company or any of its Restricted Subsidiaries in
such Asset Sale having an aggregate Fair Market Value, taken together with all
other Designated Non-cash Consideration received pursuant to this clause (iii)
that is at that time outstanding, not to exceed the greater of 3.0% of Total
Assets and $35 million 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)

shall be deemed to be Cash Equivalents for the
purposes of this Section 4.06(a).

(b)           Within 365 days after the Company’s or any Restricted
Subsidiary of the Company’s receipt of the Net Proceeds of any Asset Sale, the
Company or such Restricted Subsidiary of the Company may apply the Net Proceeds
from such Asset Sale, at its option:

(i)    to repay Senior Indebtedness, Secured
Indebtedness, including Indebtedness under the Credit Agreement (and, if the Indebtedness
repaid is revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto) or Indebtedness of a Foreign Subsidiary or Pari Passu
Indebtedness (provided that if the Company or
any Guarantor shall so reduce Obligations under Pari Passu Indebtedness, the
Company shall equally and ratably reduce Obligations under the Securities by
making an offer (in accordance with the procedures set forth below for an Asset
Sale Offer) to all Holders to purchase at a purchase price equal to 100% of 

 

59

 

the
principal amount thereof, plus accrued and unpaid interest and Additional
Interest, if any, the pro rata principal amount of Securities) or Indebtedness
of a Restricted Subsidiary that is not a Guarantor, in each case other than
Indebtedness owed to the Company or an Affiliate of the Company,

(ii)   to make an investment in any one or more
businesses (provided that if such investment is in the form of the acquisition
of Capital Stock of a Person, such acquisition results in such Person becoming
a Restricted Subsidiary of the Company), assets, or property or capital
expenditures, in each case used or useful in a Similar Business, or

(iii)  to make an investment in any one or more
businesses (provided that if such investment is in the form of the acquisition
of Capital Stock of a Person, such acquisition results in such Person becoming
a Restricted Subsidiary of the Company), properties or assets that replace the
properties and assets that are the subject of such Asset Sale.

                In
the case of Sections 4.06(b)(ii) and (iii), a binding commitment shall be
treated as a permitted application of the Net Proceeds from the date of such
commitment; provided that (x) such investment is
consummated within 545 days after receipt by the Company or any Restricted
Subsidiary of the Net Proceeds of any Asset Sale and (y) if such investment is
not consummated within the period set forth in subclause (x), the Net Proceeds
not so applied will be deemed to be Excess Proceeds (as defined below).

                Pending the final application of any such
Net Proceeds, the Company or such Restricted Subsidiary of the Company may
temporarily reduce Indebtedness under a revolving credit facility, if any, or
otherwise invest such Net Proceeds in Cash Equivalents or Investment Grade
Securities. Any Net Proceeds from any Asset Sale that are not applied as
provided and within the time period set forth in the first sentence of this
Section 4.06(b) (it being understood that any portion of such Net Proceeds used
to make an offer to purchase Securities, as described in clause (i) of this
Section 4.06(b), shall be deemed to have been invested whether or not such
offer is accepted) shall be deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess
Proceeds exceeds $15 million, the Issuers shall make an offer to all Holders of
Securities (and, at the option of the Issuers, to holders of any Pari Passu
Indebtedness) (an “Asset Sale Offer”) to purchase the maximum principal amount
of Securities (and such Pari Passu Indebtedness), that is at least $2,000 and
an integral multiple of $1,000 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 (or, in the event such Pari Passu Indebtedness was issued with
significant original issue discount, 100% of the accreted value thereof), plus
accrued and unpaid interest and Additional Interest, if any (or, in respect of
such Pari Passu Indebtedness, such lesser price, if any, as may be provided for
by the terms of such Pari Passu Indebtedness), to the date fixed for the
closing of such offer, in accordance with the procedures set forth in this
Section 4.06. The Issuers shall commence an Asset Sale Offer with respect to
Excess Proceeds within ten Business Days after the date that Excess Proceeds
exceeds $15 million by mailing the notice required pursuant to the terms of
Section 4.06(f), with a copy to the Trustee. To the extent that the aggregate
amount of Securities (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 

 

60

 

for general corporate purposes. If the aggregate principal
amount of Securities (and such Pari Passu Indebtedness) surrendered by holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Securities to be purchased in the manner described in Section 4.06(e). Upon
completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.

(c)           The Issuers shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations to
the extent such laws or regulations are applicable in connection with the
repurchase of the Securities 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 its
obligations described in this Indenture by virtue thereof.

(d)           Not later than the date upon which written notice of an
Asset Sale Offer is delivered to the Trustee as provided above, the Company
shall deliver to the Trustee an Officers’ Certificate as to (i) the amount of
the Excess Proceeds, (ii) the allocation of the Net Proceeds from the Asset
Sales pursuant to which such Asset Sale Offer is being made and (iii) the
compliance of such allocation with the provisions of Section 4.06(b). On such
date, the Company shall also irrevocably deposit with the Trustee or with a
paying agent (or, if the Company or a Wholly Owned Restricted Subsidiary is
acting as the Paying Agent, segregate and hold in trust) an amount equal to the
Excess Proceeds to be invested in Cash Equivalents, as directed in writing by
the Company, and to be held for payment in accordance with the provisions of
this Section 4.06. Upon the expiration of the period for which the Asset Sale
Offer remains open (the “Offer Period”), the Company shall deliver to the
Trustee for cancellation the Securities or portions thereof that have been
properly tendered to and are to be accepted by the Company. The Trustee (or the
Paying Agent, if not the Trustee) shall, on the date of purchase, mail or
deliver payment to each tendering Holder in the amount of the purchase price. In
the event that the Excess Proceeds delivered by the Company to the Trustee are
greater than the purchase price of the Securities tendered, the Trustee shall
deliver the excess to the Company immediately after the expiration of the Offer
Period for application in accordance with Section 4.06.

(e)           Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders shall be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business Day
prior to the Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security
which was delivered by the Holder for purchase and a statement that such Holder
is withdrawing his election to have such Security purchased. If at the end of
the Offer Period more Securities (and such Pari Passu Indebtedness) are
tendered pursuant to an Asset Sale Offer than the Issuers are required to
purchase, selection of such Securities for purchase shall be made by the
Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which such Securities are listed, or if such
Securities are not so listed, on a pro rata basis, by lot or by such other
method as the Trustee shall deem fair and appropriate (and in such manner as
complies with applicable legal requirements); provided
that no Securities of $2,000 or less shall be 

 

61

 

purchased in part. Selection
of such Pari Passu Indebtedness shall be made pursuant to the terms of such
Pari Passu Indebtedness.

(f)            Notices of an Asset Sale Offer shall be mailed by first
class mail, postage prepaid, at least 30 but not more than 60 days before the
purchase date to each Holder of Securities at such Holder’s registered address.
If any Security is to be purchased in part only, any notice of purchase that
relates to such Security shall state the portion of the principal amount
thereof that has been or is to be purchased.

SECTION 4.07.      Transactions
with Affiliates. (a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, 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 or series of transactions, 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
consideration in excess of $7.5 million, unless:

(i)    such Affiliate Transaction is on terms that
are not materially less favorable to the Company or the relevant Restricted
Subsidiary than those that could have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary with an unrelated Person; and

(ii)   with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $20 million, the Company delivers to the Trustee a resolution adopted
in good faith by the majority of the Board of Directors of the Company,
approving such Affiliate Transaction and set forth in an Officers’ Certificate
certifying that such Affiliate Transaction complies with clause (i) above.

(b)           The provisions of Section 4.07(a)
shall not apply to the following:

(i)        (A) transactions
between or among the Company and/or any of its Restricted Subsidiaries and (B)
any merger of the Company and any direct parent of the Company; provided that such parent shall have no material liabilities
and no material assets other than cash, Cash Equivalents and the Capital Stock
of the Company and such merger is otherwise in compliance with the terms of
this Indenture and effected for a bona fide business purpose;

(ii)       Restricted Payments
permitted by Section 4.04 and Permitted Investments;

(iii)      (x) the entering into
of any agreement (and any amendment or modification of any such agreement) to
pay, and the payment of, annual management, consulting, monitoring and advisory
fees to the Sponsors in an aggregate amount in any fiscal year not to exceed
the greater of (A) $2.5 million and (B) 1.5% of EBITDA of the Company and its
Restricted Subsidiaries for the immediately preceding fiscal year, and
out-of-pocket expense reimbursement; provided,
however, that any payment not made in any fiscal year may be carried
forward and paid in the following two fiscal years and (y) the payment of the
present 

 

62

 

value
of all amounts payable pursuant to any agreement described in clause (iii)(x)
of Section 4.07(b) in connection with the termination of such agreement;

(iv)      the payment of
reasonable and customary fees and reimbursement of expenses paid to, and
indemnity provided on behalf of, officers, directors, employees or consultants
of the Company or any Restricted Subsidiary or any direct or indirect parent of
the Company;

(v)       payments by the Company
or any of its Restricted Subsidiaries to the Sponsors 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 (x) made pursuant to the
agreements with the Sponsors described in the Offering Circular or (y) approved
by a majority of the Board of Directors of the Company in good faith;

(vi)      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 meets the requirements of clause (i) of Section
4.07(a);

(vii)     payments or loans (or
cancellation of loans) to employees or consultants which are approved by a
majority of the Board of Directors of the Company in good faith;

(viii)    any agreement as in
effect as of the Issue Date or any amendment thereto (so long as any such
agreement together with all amendments thereto, taken as a whole, is not more
disadvantageous to the Holders of the Securities in any material respect than
the original agreement as in effect on the Issue Date) or any transaction
contemplated thereby as determined in good faith by senior management or the
Board of Directors of the Company;

(ix)      the existence of, or the
performance by the Company or any of its Restricted Subsidiaries of its
obligations under the terms of, Acquisition Documents, 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 amendment
thereto or 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 its 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 (ix) to the extent that the terms
of any such existing agreement together with all amendments thereto, taken as a
whole, or new agreement are not otherwise more disadvantageous to the Holders
of the Securities in any material respect than the original agreement as in
effect on the Issue Date;

 

63

 

(x)       the execution of the
Transactions and the payment of all fees and expenses related to the Transactions,
including fees to the Sponsors, which are described in the Offering Circular or
contemplated by the Acquisition Documents;

(xi)      (A) 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 or the
senior management of the Company, or are on terms at least as favorable as
might reasonably have been obtained at such time from an unaffiliated party or
(B) transactions with joint ventures or Unrestricted Subsidiaries entered into
in the ordinary course of business;

(xii)     any transaction effected
as part of a Qualified Receivables Financing;

(xiii)    the issuance of Equity
Interests (other than Disqualified Stock) of the Company to any Person;

(xiv)    the issuances of
securities or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock option and stock
ownership plans or similar employee benefit plans approved by the Board of
Directors of the Company or any direct or indirect parent of the Company or of
a Restricted Subsidiary of the Company, as appropriate, in good faith;

(xv)     the entering into of any
tax sharing agreement or arrangement and any payments permitted by Section
4.04(b)(xii);

(xvi)    any contribution to the
capital of the Company;

(xvii)   transactions permitted
by, and complying with, Section 5.01;

(xviii)  transactions between the
Company or any of its Restricted Subsidiaries and any Person, a director of
which is also a director of the Company or any direct or indirect parent of the
Company; provided, however,
that such director abstains from voting as a director of the Company or such
direct or indirect parent, as the case may be, on any matter involving such
other Person;

(xix)     pledges of Equity
Interests of Unrestricted Subsidiaries;

(xx)      any employment
agreements entered into by the Company or any of its Restricted Subsidiaries in
the ordinary course of business; and

(xxi)     intercompany
transactions undertaken in good faith (as certified by a responsible financial
or accounting officer of the Company in an Officers’ Certificate) for the
purpose of improving the consolidated tax efficiency of the 

 

64

 

Company
and its Subsidiaries and not for the purpose of circumventing any covenant set
forth in this Indenture.

SECTION 4.08.      Change
of Control. (a) Upon a Change of Control, each Holder shall have the right
to require the Issuers to repurchase all or any part of such Holder’s
Securities at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), in accordance with
the terms contemplated in this Section 4.08; provided,
however, that notwithstanding the
occurrence of a Change of Control, the Issuers shall not be obligated to
purchase any Securities pursuant to this Section 4.08 in the event that they
have exercised their right to redeem such Securities in accordance with Article
3 of this Indenture. In the event that at the time of such Change of Control
the terms of the Bank Indebtedness or other Senior Indebtedness restrict or
prohibit the repurchase of Securities pursuant to this Section 4.08, then prior
to the mailing of the notice to the Holders provided for in Section 4.08(b) but
in any event within 30 days following any Change of Control, the Issuers shall
(i) repay in full all Bank Indebtedness and other Senior Indebtedness or, if
doing so will allow the purchase of Securities, offer to repay in full all Bank
Indebtedness and/or such other Senior Indebtedness, as the case may be, and
repay the Bank Indebtedness and/or such Senior Indebtedness of each lender who
has accepted such offer, or (ii) obtain the requisite consent under the
agreements governing the Bank Indebtedness and such Senior Indebtedness to
permit the repurchase of the Securities as provided for in Section 4.08(b).

(b)           Within 30 days following any Change of Control, except to
the extent that the Issuers have exercised their right to redeem the Securities
in accordance with Article 3 of this Indenture, the Company shall mail a notice
(a “Change of Control Offer”) to each Holder with a copy to the Trustee
stating:

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

(ii)   the circumstances and relevant facts and
financial information regarding such Change of Control;

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

(iv)  the instructions determined by the Issuers,
consistent with this Section 4.08, that a Holder must follow in order to have
its Securities purchased.

(c)           Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. The Holders shall 

 

65

 

be entitled to withdraw
their election if the Trustee or the Company receives not later than one
Business Day prior to the purchase date a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Security
purchased. Holders whose Securities are purchased only in part shall be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.

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

(e)           A Change of Control Offer may be made in advance of a
Change of Control, and conditioned 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.

(f)            Notwithstanding the foregoing provisions of this Section,
the Issuers shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in Section 4.08 applicable to a Change of Control Offer made by the
Issuers and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.

(g)           Securities repurchased by the Issuers pursuant to a Change
of Control Offer will have the status of Securities issued but not outstanding
or will be retired and canceled at the option of the Issuers. Securities
purchased by a third party pursuant to the preceding clause (e) will have the
status of Securities issued and outstanding.

(h)           At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers’ Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section 4.08. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to
the surrendering Holder.

(i)            Prior to any Change of Control Offer, the Company shall
deliver to the Trustee an Officers’ Certificate stating that all conditions
precedent contained herein to the right of the Company to make such offer have
been complied with.

(j)            The Issuers shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.08, the Issuers shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached their obligations under this Section by virtue thereof.

 

66

 

(k)           The conversion of Rexnord into a Delaware limited
liability company will not constitute a Change of Control.

SECTION 4.09.      Compliance
Certificate. The Company shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Company, beginning with the fiscal year end
on March 31, 2007, an Officers’ Certificate stating that in the course of the
performance by the signers of their duties as Officers of the Company they
would normally have knowledge of any Default and whether or not the signers
know of any Default that occurred during such period. If they do, the certificate
shall describe the Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with
Section 314(a)(4) of the TIA.

SECTION 4.10.      Further
Instruments and Acts. Upon request of the Trustee, the Company shall
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of
this Indenture.

SECTION 4.11.      Future
Guarantors. The Company shall cause each Restricted Subsidiary that is a
Domestic Subsidiary (unless such Subsidiary is a Receivables Subsidiary) that

(i)    guarantees any Indebtedness of the Company
or any of its Restricted Subsidiaries, or

(ii)   incurs any Indebtedness or issues any shares
of Disqualified Stock permitted to be Incurred or issued pursuant to clauses
(i) or (xii) of Section 4.03(b) or not permitted to be Incurred by Section
4.03,

to execute and deliver to the Trustee a supplemental
indenture substantially in the form of Exhibit D pursuant to which such
Subsidiary shall guarantee the Issuers’ Obligations under the Securities and
the Indenture.

SECTION 4.12.      Liens.
The Company shall not, and shall not permit any of its Restricted Subsidiaries
to, directly or indirectly, create, Incur or suffer to exist any Lien on any
asset or property of the Company or such Restricted Subsidiary securing
Indebtedness unless the Securities are equally and ratably secured with (or on
a senior basis to, in the case of obligations subordinated in right of payment
to the Securities) the obligations so secured until such time as such
obligations are no longer secured by a Lien. The preceding sentence shall not
require the Company or any Restricted Subsidiary of the Company to secure the
Securities if the Lien consists of a Permitted Lien. Any Lien which is granted
to secure the Securities or such Guarantee under this Section 4.12 shall be
automatically released and discharged at the same time as the release of the
Lien that gave rise to the obligation to secure the Securities or such
Guarantee under this Section 4.12.

SECTION 4.13.      Limitation
on Other Senior Subordinated Indebtedness. The Company shall not, and shall
not permit any Guarantor to, directly or indirectly, Incur any Indebtedness
(including Acquired Indebtedness) that is subordinate in right of payment to
any Indebtedness of the Company or any Indebtedness of any such Guarantor, as
the case may be, unless such Indebtedness is either:

 

67

 

(i)    pari passu in right of payment with the
Securities or such Guarantor’s Guarantee, as the case may be, or

(ii)   subordinate in right of payment to the
Securities or such Guarantor’s Guarantee, as the case may be.

SECTION 4.14.      Maintenance
of Office or Agency. (a) The Company shall maintain an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee or
Registrar) where Securities may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company 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 Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the corporate trust office of the Trustee as set forth in
Section 13.02.

(b)           The Company may also from time to time designate one or
more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency for such purposes. The Company 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.

(c)           The Company hereby designates the corporate trust office
of the Trustee or its Agent as such office or agency of the Company in
accordance with Section 2.04.

ARTICLE 5

SUCCESSOR COMPANY

SECTION 5.01.      When
Company May Merge or Transfer Assets. (a) The Company shall not, directly
or indirectly, consolidate, amalgamate or merge with or into or wind up or
convert into (whether or not the Company is the surviving Person), 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)    the Company is the surviving Person or the
Person formed by or surviving any such consolidation, amalgamation, merger,
winding up or conversion (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation, partnership or limited liability company organized or
existing under the laws of the United States, any state thereof, the District
of Columbia, or any territory thereof (the Company or such Person, as the case
may be, being herein called the “Successor Company”); provided that in the case where the
surviving Person is not a corporation, a co-obligor of the Securities is a
corporation;

 

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(ii)   the Successor Company (if other than the
Company) expressly assumes all the obligations of the Company under this
Indenture and the Securities pursuant to supplemental indentures or other
documents or instruments in form reasonably satisfactory to the Trustee;

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

(iv)  immediately after giving pro forma effect to
such transaction, as if such transaction had occurred at the beginning of the
applicable four-quarter period (and treating any Indebtedness which becomes an
obligation of the Successor Company or any of its Restricted Subsidiaries as a
result of such transaction as having been Incurred by the Successor Company or
such Restricted Subsidiary at the time of such transaction), either

(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 4.03(a); or

(B)           the Fixed Charge Coverage Ratio for
the Successor Company and its Restricted Subsidiaries would be greater than
such ratio for the Company and its Restricted Subsidiaries immediately prior to
such transaction;

(v)   each Guarantor, unless it is the other party
to the transactions described above, shall have by supplemental indenture
confirmed that its Guarantee shall apply to such Person’s obligations under
this Indenture and the Securities;

(vi)  if the Successor Company is not organized as a
corporation after such transaction, a successor corporation that is a
Subsidiary of the Successor Company shall continue to be co-obligor of the
Securities and shall have by supplemental indenture confirmed its obligation
under this Indenture and the Securities; and

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

The Successor Company (if other than the Company)
shall succeed to, and be substituted for, the Company under this Indenture and
the Securities, and in such event the Company will automatically be released
and discharged from its obligations under this Indenture and the Securities. Notwithstanding
the foregoing clauses (iii) and (iv) of this Section 5.01, (a) any Restricted
Subsidiary may merge, consolidate or amalgamate with or transfer all or part of
its properties and assets to the Company or to another Restricted Subsidiary,
and (b) the Company may merge, consolidate or amalgamate with an Affiliate
incorporated solely for the purpose of reincorporating the Company in another
state of the United States, the District of Columbia or any territory of the
United States or may convert into a limited liability company, so 

 

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long as the amount of Indebtedness of the Company and
its Restricted Subsidiaries is not increased thereby. This Article 5 will not
apply to (i) a sale, assignment, transfer, conveyance or other disposition of
assets between or among the Company and its Restricted Subsidiaries, or (ii)
the conversion of Rexnord into a Delaware limited liability company.

(b)           Subject to the provisions of Section 11.02(b) (which
govern the release of a Guarantee upon the sale or disposition of a Restricted
Subsidiary of the Company that is a Guarantor), neither Rexnord nor any
Guarantor shall, and the Company shall not permit Rexnord or any Guarantor to,
consolidate, amalgamate or merge with or into or wind up into (whether or not
Rexnord or such Guarantor is the surviving Person), 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 (other
than any such sale, assignment, transfer, lease, conveyance or disposition in
connection with the Transactions described in the Offering Circular) unless:

(i)    either (A) Rexnord or such Guarantor, as the
case may be, is the surviving Person or the Person formed by or surviving any
such consolidation, amalgamation or merger (if other than Rexnord or such
Guarantor, as the case may be) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation,
partnership or limited liability company organized or existing under the laws
of the United States, any state thereof, the District of Columbia, or any territory
thereof (Rexnord, such Guarantor or such Person, as the case may be, being
herein called the “Successor Co-Issuer” in the case of a consolidation,
amalgamation, merger, winding up or sale, assignment, transfer, lease,
conveyance or other disposal of all or substantially all of the properties or
assets of Rexnord, and the “Successor Guarantor,” in the case of a
consolidation, amalgamation, merger, winding up or sale, assignment, transfer,
lease, conveyance or other disposal of all or substantially all of the
properties or assets of a Guarantor) and the Successor Co-Issuer or Successor
Guarantor (if other than Rexnord or such Guarantor, as the case may be)
expressly assumes all the obligations of Rexnord or such Guarantor, as the case
may be, under this Indenture and, if applicable, such Guarantors’ Guarantee
pursuant to a supplemental indenture or other documents or instruments in form
reasonably satisfactory to the Trustee, or (b) other than in the case of a
sale, disposition, consolidation, amalgamation or merger of Rexnord, such sale
or disposition or consolidation, amalgamation or merger is not in violation of
Section 4.06;

(ii)   the Successor Co-Issuer (if other than
Rexnord) expressly assumes all the obligations of Rexnord under this Indenture
and the Securities pursuant to supplemental indentures or other documents or
instruments in form reasonably satisfactory to the Trustee; and

(iii)  the Successor Co-Issuer or Successor Guarantor
(if other than Rexnord or such Guarantor, as the case may be) shall have
delivered or caused to be delivered to the Trustee an Officers’ Certificate and
an Opinion of Counsel, each stating that such consolidation, amalgamation,
merger or transfer and such supplemental indenture (if any) comply with this
Indenture.

 

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Except as otherwise
provided in this Indenture, the Successor Co-Issuer or Successor Guarantor (if
other than Rexnord or such Guarantor, as the case may be) will succeed to, and
be substituted for, Rexnord or such Guarantor, as the case may be, under this
Indenture and, if applicable, such Guarantor’s Guarantee, and Rexnord or such
Guarantor, as the case may be, will automatically be released and discharged
from its obligations under this Indenture and, if applicable, such Guarantor’s
Guarantee. Notwithstanding the foregoing, (1) Rexnord or a Guarantor may merge,
amalgamate or consolidate with an Affiliate incorporated solely for the purpose
of reincorporating Rexnord or such Guarantor in another state of the United
States, the District of Columbia or any territory of the United States so long
as the amount of Indebtedness of Rexnord or the Guarantor is not increased
thereby and (2) Rexnord or a Guarantor may merge, amalgamate or consolidate
with another Guarantor or the Company.

In addition,
notwithstanding the foregoing, Rexnord or any Guarantor may consolidate,
amalgamate or merge with or into or wind up into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets (collectively, a “Transfer”) to, (x) the Company, Rexnord or any
Guarantor or (y) any Restricted Subsidiary of the Company that is not Rexnord
or a Guarantor; provided that at
the time of each such Transfer pursuant to clause (y) the aggregate amount of
all such Transfers since the Issue Date shall not exceed 5.0% of the
consolidated assets of the Company, Rexnord and the Guarantors as shown on the
most recent available balance sheet of the Company and the Restricted
Subsidiaries after giving effect to each such Transfer and including all
Transfers occurring from and after the Issue Date (excluding Transfers in
connection with the Transactions described in the Offering Circular).

Upon consummation of the
Transactions, the Company shall execute and deliver to the Trustee a
supplemental indenture of the type referred to in Section 5.01(ii), whereupon
the Company shall be the Successor Company and shall succeed to, and be
substituted for, and may exercise every right and power of, Merger Sub under this
Indenture. Notwithstanding anything above to the contrary, the merger of Merger
Sub with and into the Company on the Issue Date as described in the Merger
Agreement and the conversion of Rexnord into a Delaware limited liability
company immediately following the Transactions, in each case shall be permitted
under this Indenture.

ARTICLE 6

DEFAULTS AND REMEDIES

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

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

(b)           there is a default in the payment of
principal or premium, if any, of any Security when due at its Stated Maturity,
upon optional redemption, upon required repurchase, upon declaration or
otherwise, whether or not such payment shall be prohibited by Article 10,

 

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(c)           either of the Issuers or any of the
Restricted Subsidiaries of the Company fails to comply with its obligations
under Section 5.01,

(d)           either of the Issuers or any of the
Restricted Subsidiaries of the Company fails to comply with any of its
agreements in the Securities or this Indenture (other than those referred to in
clause (a), (b) or (c) above) and such failure continues for 60 days after the
notice specified below,

(e)           either of the Issuers or any
Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness
owing to either of the Issuers or a Restricted Subsidiary of the Company)
within any applicable grace period after final maturity or the acceleration of
any such Indebtedness by the holders thereof because of a default, in each
case, if the total amount of such Indebtedness unpaid or accelerated exceeds
$20 million or its foreign currency equivalent,

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

(i)            commences a voluntary case;

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

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

(iv)          makes a general assignment for the
benefit of its creditors or takes any comparable action under any foreign laws
relating to insolvency,

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

(i)            is for relief against either of the
Issuers or any Significant Subsidiary of the Company in an involuntary case;

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

(iii)          orders the winding up or liquidation
of either of the Issuers or any Significant Subsidiary of the Company;

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

(h)           either of the Issuers or any
Significant Subsidiary fails to pay final judgments aggregating in excess of
$20 million or its foreign currency equivalent (net of any amounts which are
covered by enforceable insurance policies issued by solvent 

 

72

 

carriers), which judgments
are not discharged, waived or stayed for a period of 60 days following the
entry thereof, or

(i)            any Guarantee of a Significant
Subsidiary ceases to be in full force and effect (except as contemplated by the
terms thereof) or any Guarantor denies or disaffirms its obligations under this
Indenture or any Guarantee and such Default continues for 10 days after the
notice specified below.

The foregoing shall constitute Events of Default
whatever the reason for any such Event of Default and whether it is voluntary
or involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.

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

A Default under clause (d) above shall not constitute
an Event of Default until the Trustee notifies the Issuers or the Holders of at
least 25% in principal amount of the outstanding Securities notify the Issuers
and the Trustee of the Default and the Issuers do not cure such Default within
the time specified in clause (d) above after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that such
notice is a “Notice of Default.” The Issuers shall deliver to the Trustee,
within five (5) Business Days after the occurrence thereof, written notice in
the form of an Officers’ Certificate of any event which is, or with the giving
of notice or the lapse of time or both would become, an Event of Default, its
status and what action the Issuers are taking or propose to take with respect
thereto.

SECTION 6.02.      Acceleration.
If an Event of Default (other than an Event of Default specified in Section
6.01(f) or (g) with respect to either of the Issuers) occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of outstanding
Securities, by notice to the Issuers shall declare that the principal of,
premium, if any, and accrued but unpaid interest on all the Securities is due
and payable; provided, however, that so long as any Bank
Indebtedness remains outstanding, no such acceleration shall be effective until
the earlier of (i) five (5) Business Days after the giving of written notice to
the Issuers and the Representative under the Credit Agreement and (ii) the day
on which any Bank Indebtedness is accelerated. Upon such a declaration, such
principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(f) or (g) with respect to either of the
Issuers occurs, the principal of, premium, if any, and interest on all the
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holders. The
Holders of a majority in principal amount of the Securities by notice to the
Trustee may rescind an acceleration and its consequences.

In the event of any Event of Default specified in
Section 6.01(e), such Event of Default and all consequences thereof (excluding,
however, any resulting payment default) shall be annulled, waived and
rescinded, automatically and without any action by the Trustee or the Holders
of the Securities, if within 20 days after such Event of Default arose the
Issuers deliver an Officers’ Certificate to the Trustee stating that (x) the
Indebtedness or guarantee that is the 

 

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basis for such Event of Default has been discharged or
(y) the holders thereof have rescinded or waived the acceleration, notice or
action (as the case may be) giving rise to such Event of Default or (z) the
default that is the basis for such Event of Default has been cured, it being
understood that in no event shall an acceleration of the principal amount of
the Securities as described above be annulled, waived or rescinded upon the
happening of any such events.

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

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

SECTION 6.04.      Waiver
of Past Defaults. Provided the Securities are not then due and payable by
reason of a declaration of acceleration, the Holders of a majority in principal
amount of the Securities by written notice to the Trustee may waive an existing
Default and its consequences except (a) a Default in the payment of the
principal of or interest on a Security, (b) a Default arising from the failure
to redeem or purchase any Security when required pursuant to the terms of this
Indenture or (c) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Holder affected. When a Default
is waived, it is deemed cured and the Issuers, the Trustee and the Holders will
be restored to their former positions and rights under this Indenture, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right.

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

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

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

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

 

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

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

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

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

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

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

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

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

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

 

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SECOND: to holders of Senior Indebtedness of the Issuers to the extent
required by Article 10 and to holders of Senior Indebtedness of the Guarantors
to the extent required by Article 12;

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

FOURTH: to the Company or, to the extent the Trustee collects any
amount for any Guarantor, to such Guarantor.

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

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

SECTION 6.12.      Waiver
of Stay or Extension Laws. Neither the Issuers nor any Guarantor (to the
extent it may lawfully do so) shall at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Issuers
and each Guarantor (to the extent that it may lawfully do so) hereby expressly
waive all benefit or advantage of any such law, and shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.

ARTICLE 7

TRUSTEE

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

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

(i)    the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall 

 

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be
read into this Indenture against the Trustee (it being agreed that the
permissive right of the Trustee to do things enumerated in this Indenture shall
not be construed as a duty); 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. The
Trustee shall be under no duty to make any investigation as to any statement
contained in any such instance, but may accept the same as conclusive evidence
of the truth and accuracy of such statement or the correctness of such
opinions. However, in the case of certificates or opinions required by any
provision hereof to be provided to it, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.

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

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

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

(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; and

(iv)  no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers.

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

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

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

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

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

 

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

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

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

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

(f)            The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other paper or document unless requested in writing to do so
by the Holders of not less than a majority in principal amount of the
Securities at the time outstanding, 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 expense of the
Issuers and shall incur no liability of any kind by reason of such inquiry or
investigation.

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

(h)           The rights, privileges, protections, immunities and benefits
given to the Trustee, including 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.

(i)            The Trustee shall not be liable for any action taken or
omitted by it in good faith at the direction of the Holders of not less than a
majority in principal amount of the Securities as to the time, method and place
of conducting any proceedings for any remedy available to the Trustee or the
exercising of any power conferred by the Indenture.

(j)            Any action taken, or omitted to be taken, by the Trustee
in good faith pursuant to this Indenture upon the request or authority or
consent of any person who, at the time of making such request or giving such
authority or consent, is the Holder of any Security shall be conclusive and
binding upon future Holders of Securities and upon Securities executed and
delivered in exchange therefor or in place thereof.

 

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

SECTION 7.04.      Trustee’s
Disclaimer. The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, any Guarantee
or the Securities, it shall not be accountable for the Issuers’ use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Issuers or any Guarantor in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee’s certificate of authentication. The Trustee shall not be charged with
knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e),
(h), or (i) or of the identity of any Significant Subsidiary unless either (a)
a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall
have received written notice thereof in accordance with Section 13.02 hereof
from the Issuers, any Guarantor or any Holder. In accepting the trust hereby
created, the Trustee acts solely as Trustee for the Holders of the Securities
and not in its individual capacity and all persons, including without
limitation the Holders of Securities and the Issuers having any claim against
the Trustee arising from this Indenture shall look only to the funds and
accounts held by the Trustee hereunder for payment except as otherwise provided
herein.

SECTION 7.05.      Notice
of Defaults. If a Default occurs and is continuing and if it is actually
known to the Trustee, the Trustee shall mail to each Holder notice of the
Default within the earlier of 90 days after it occurs or 30 days after it is
actually known to a Trust Officer or written notice of it is received by the
Trustee. Except in the case of a Default in the payment of principal of,
premium (if any) or interest on any Security, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of the Holders.

SECTION 7.06.      Reports
by Trustee to the Holders. As promptly as practicable after each June 30
beginning with the June 30 following the date of this Indenture, and in any
event prior to June 30 in each year, the Trustee shall mail to each Holder a
brief report dated as of such June 30 that complies with Section 313(a) of the
TIA if and to the extent required thereby. The Trustee shall also comply with
Section 313(b) of the TIA.

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

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

 

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jointly and severally
shall indemnify the Trustee against any and all loss, liability, claim, damage
or expense (including reasonable attorneys’ fees and expenses) incurred by or
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 or Guarantee against the Issuers or a Guarantor
(including this Section 7.07) and defending itself against or investigating any
claim (whether asserted by the Issuers, any Guarantor, any Holder or any other
Person). The obligation to pay such amounts shall survive the payment in full
or defeasance of the Securities or the removal or resignation of the Trustee. The
Trustee shall notify the Issuers of any claim for which it may seek indemnity
promptly upon obtaining actual knowledge thereof; provided, however,
that any failure so to notify the Issuers shall not relieve the Issuers or any
Guarantor of its indemnity obligations hereunder. The Issuers shall defend the
claim and the indemnified party shall provide reasonable cooperation at the
Issuers’ expense in the defense. Such indemnified parties may have separate
counsel and the Issuers and the Guarantors, as applicable shall pay the fees
and expenses of such counsel; provided,
however, that the Issuers shall
not be required to pay such fees and expenses if it assumes such indemnified
parties’ defense and, in such indemnified parties’ reasonable judgment, there
is no conflict of interest between the Issuers and the Guarantors, as
applicable, and such parties in connection with such defense. The Issuers need
not reimburse any expense or indemnify against any loss, liability or expense
incurred by an indemnified party through such party’s own willful misconduct,
negligence or bad faith.

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

The Issuers’ and the Guarantors’ payment obligations
pursuant to this Section shall survive the satisfaction or discharge of this
Indenture, any rejection or termination of this Indenture under any bankruptcy
law or the resignation or removal of the Trustee. Without prejudice to any
other rights available to the Trustee under applicable law, when the Trustee
incurs expenses after the occurrence of a Default specified in Section 6.01(f)
or (g) with respect to the Issuers, the expenses are intended to constitute
expenses of administration under the Bankruptcy Law.

No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if repayment of such funds or adequate
indemnity against such risk or liability is not assured to its satisfaction.

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

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

(ii)   the Trustee is adjudged bankrupt or
insolvent;

 

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

(iv)  the Trustee otherwise becomes incapable of
acting.

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

(c)           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 the Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the Lien
provided for in Section 7.07.

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

(e)           If the Trustee fails to comply with Section 7.10, unless
the Trustee’s duty to resign is stayed as provided in Section 310(b) of the
TIA, any Holder who has been a bona fide holder of a Security for at least six
months may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.

(f)            Notwithstanding the replacement of the Trustee pursuant
to this Section, the Issuers’ obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.

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

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

SECTION 7.10.      Eligibility;
Disqualification. The Trustee shall at all times satisfy the requirements
of Section 310(a) of the TIA. The Trustee shall have a combined capital 

 

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and surplus of at least
$100 million as set forth in its most recent published annual report of
condition. The Trustee shall comply with Section 310(b) of the TIA, subject to
its right to apply for a stay of its duty to resign under the penultimate
paragraph of Section 310(b) of the TIA; provided,
however, that there shall be
excluded from the operation of Section 310(b)(1) of the TIA any series of
securities issued under this Indenture and any indenture or indentures under
which other securities or certificates of interest or participation in other
securities of the Issuers are outstanding if the requirements for such
exclusion set forth in Section 310(b)(1) of the TIA are met.

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

ARTICLE 8

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01.      Discharge
of Liability on Securities; Defeasance. This Indenture shall be discharged
and shall cease to be of further effect (except as to surviving rights of registration
of transfer or exchange of Securities, as expressly provided for in this
Indenture) as to all outstanding Securities when:

(a)           either (i) all the Securities
theretofore authenticated and delivered (other than Securities pursuant to
Section 2.08 which have been replaced or paid and Securities for whose payment
money has theretofore been deposited in trust or segregated and held in trust
by the Issuers and thereafter repaid to the Issuers or discharged from such
trust) have been delivered to the Trustee for cancellation or (ii) all of the
Securities (a) have become due and payable, (b) will become due and payable at
their stated maturity within one year or (c) if redeemable at the option of the
Issuers, 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 have
irrevocably deposited or caused to be deposited with the Trustee cash in U.S.
Dollars, U.S. Government Obligations or a combination thereof in an amount
sufficient in the written opinion of a firm of independent public accountants
delivered to the Trustee (which delivery shall only be required if Government
Obligations have been so deposited) to pay and discharge the entire
Indebtedness on the Securities not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on the Securities
to the date of deposit together with irrevocable instructions from the Issuers
directing the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;

(b)           the Issuers and/or the Guarantors
have paid all other sums payable under this Indenture; and

 

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(c)           the Issuers have delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel stating that all
conditions precedent under this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.

Subject to Sections 8.01(c) and 8.02, the Issuers at
any time may terminate (i) all of their obligations under the Securities and
this Indenture (with respect to such Securities) (“legal defeasance option”) or
(ii) their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08,
4.09, 4.11, 4.12 and 4.13 and the operation of Section 5.01 and Sections
6.01(c), 6.01(d), 6.01(e), 6.01(f) (with respect to Significant Subsidiaries of
the Company only), 6.01(g) (with respect to Significant Subsidiaries of the
Company only), 6.01(h) and 6.01(i) (“covenant defeasance option”).  The Issuers may exercise their legal
defeasance option notwithstanding their prior exercise of their covenant
defeasance option.  In the event that the
Issuers terminate all of their obligations under the Securities and this
Indenture (with respect to such Securities) by exercising their legal
defeasance option or their covenant defeasance option, the obligations of each
Guarantor under its Guarantee of such Securities shall be terminated simultaneously
with the termination of such obligations.

If the Issuers exercise their legal defeasance option,
payment of the Securities so defeased may not be accelerated because of an
Event of Default.  If the Issuers
exercise their covenant defeasance option, payment of the Securities so
defeased may not be accelerated because of an Event of Default specified in
Section 6.01(c), 6.01(d), 6.01(e), 6.01(f) (with respect to Significant
Subsidiaries of the Company only), 6.01(g) (with respect to Significant Subsidiaries
of the Company only), 6.01(h) or 6.01(i) or because of the failure of the
Issuers to comply with Section 5.01.

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

(d)           Notwithstanding clauses (a) and (b)
above, the Issuers’ obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09,
7.07, 7.08 and in this Article 8 shall survive until the Securities have been
paid in full.  Thereafter, the Issuers’
obligations in Sections 7.07, 8.05 and 8.06 shall survive such satisfaction and
discharge.

SECTION 8.02.   Conditions
to Defeasance.  (a)  The Issuers may exercise their legal
defeasance option or its covenant defeasance option only if:

(i)    the Issuers irrevocably deposit in trust
with the Trustee cash in U.S. Dollars, U.S. Government Obligations or a
combination thereof in an amount sufficient or Government Obligations, the
principal of and the interest on which will be sufficient, or a combination
thereof sufficient, to pay the principal of and premium (if any) and interest
on the Securities when due at maturity or redemption, as the case may be,
including interest thereon to maturity or such redemption date;

(ii)   the Issuers deliver to the Trustee a
certificate from a nationally recognized firm of independent accountants
expressing their opinion that the payments of principal and interest when due
and without reinvestment on the deposited U.S. 

 

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Government
Obligations  plus any deposited money
without investment will provide cash at such times and in such amounts as will
be sufficient to pay principal, premium, if any, and interest when due on all
the Securities to maturity or redemption, as the case may be;

(iii)         123 days pass after the deposit is made
and during the 123-day period no Default specified in Section 6.01(f) or (g)
with respect to the Issuers occurs which is continuing at the end of the
period;

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

(v)         in the case of the legal defeasance
option, the Issuers shall have delivered to the Trustee an Opinion of Counsel
stating that (1) the Issuers have received from, or there has been published
by, the Internal Revenue Service a ruling, or (2) since the date of this
Indenture there has been a change in the applicable Federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such deposit and defeasance had
not occurred;

(vi)        impair the right of any holder to
receive payment of principal of, premium, if any, and interest on such holder’s
Securities on or after the due dates therefore or to institute suit for the
enforcement of any payment on or with respect to such holder’s Securities;

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

(viii)      the Issuers deliver to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the Securities to be so
defeased and discharged as contemplated by this Article 8 have been complied
with.

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

SECTION 8.03.   Application
of Trust Money.  The Trustee shall
hold in trust money or Government Obligations (including proceeds thereof)
deposited with it pursuant to this Article 8. 
It shall apply the deposited money and the money from Government Obligations
through each Paying Agent and in accordance with this Indenture to the payment
of principal of and interest on the Securities so discharged or defeased.  Money and securities so held in trust are not
subject to Article 10 or 12.

 

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SECTION 8.04.   Repayment
to Company.  Each of the Trustee and
each Paying Agent shall promptly turn over to the Issuers upon request any
money or Government Obligations held by it as provided in this Article which,
in the written opinion of nationally recognized firm of independent public
accountants delivered to the Trustee (which delivery shall only be required if
Government Obligations have been so deposited), are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
discharge or defeasance in accordance with this Article.

Subject to any applicable abandoned property law, the
Trustee and each Paying Agent shall pay to the Issuers upon written request any
money held by them for the payment of principal or interest that remains
unclaimed for two years, and, thereafter, Holders entitled to the money must
look to the Issuers for payment as general creditors, and the Trustee and each
Paying Agent shall have no further liability with respect to such monies.

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

SECTION 8.06.   Reinstatement.  If the Trustee or any Paying Agent is unable
to apply any money or Government Obligations in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Issuers’ obligations under this Indenture and the
Securities so discharged or defeased shall be revived and reinstated as though
no deposit had occurred pursuant to this Article 8 until such time as the
Trustee or any Paying Agent is permitted to apply all such money or Government
Obligations in accordance with this Article 8; provided,
however, that, if the Issuers
have made any payment of principal of or interest on, any such Securities
because of the reinstatement of their obligations, the Issuers shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or Government Obligations held by the Trustee or any
Paying Agent.

ARTICLE 9

AMENDMENTS AND WAIVERS

SECTION 9.01.   Without
Consent of the Holders.  (a)  The Issuers and the Trustee may amend this
Indenture or the Securities without notice to or consent of any Holder:

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

(ii)         to provide for the assumption by a
Successor Company of the obligations of the Issuers under this Indenture and
the Securities;

(iii)        to provide for the assumption by a
Successor Guarantor of the obligations of a Guarantor under this Indenture and
its Guarantee;

(iv)       to comply with Article 5;

 

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

(vi)       to make any change in Article 10 or
Article 12 that would limit or terminate the benefits available to any holder
of Senior Indebtedness of the Company or a Guarantor (or Representatives
thereof) under Article 10 or Article 12, respectively;

(vii)      to add additional Guarantees with respect
to the Securities or to secure the Securities;

(viii)     to add to the covenants of the Issuers for
the benefit of the Holders or to surrender any right or power herein conferred
upon the Issuers;

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

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

(xi)       to provide for the issuance of the
Exchange Securities or Additional Securities, which shall have terms
substantially identical in all material respects to the Initial Securities, and
which shall be treated, together with any outstanding Initial Securities, as a
single issue of securities.

(b)           An amendment under this Section 9.01 may not make any
change that adversely affects the rights under Article 10 or Article 12 of any
holder of Senior Indebtedness of the Issuers or a Guarantor then outstanding
unless the holders of such Senior Indebtedness (or any group or Representative
thereof authorized to give a consent) consent to such change.

After an amendment under this Section 9.01 becomes
effective, the Issuers shall mail to the Holders a notice briefly describing
such amendment.  The failure to give such
notice to all Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.01.

SECTION 9.02.   With
Consent of the Holders.  (a)  The Issuers and the Trustee may amend this
Indenture or the Securities with the written consent of the Holders of at least
a majority in principal amount of the Securities then outstanding voting as a
single class (including consents obtained in connection with a tender offer or
exchange for the Securities).  However, without
the consent of each Holder of an outstanding Security affected, an amendment
may not:

(i)          reduce the amount of Securities whose
Holders must consent to an amendment,

(ii)         reduce the rate of or extend the time
for payment of interest on any Security,

 

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(iii)        reduce the principal of or change the
Stated Maturity of any Security,

(iv)       reduce the premium payable upon the
redemption of any Security or change the time at which any Security may be
redeemed in accordance with Article 3,

(v)        make any Security payable in money other
than that stated in such Security,

(vi)       make any change in Article 10 or Article
12 that adversely affects the rights of any Holder under Article 10 or Article
12,

(vii)      impair the right of any Holder to receive
payment of principal of or premium, if any, and interest on such Holder’s
Securities 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 Securities,

(viii)     make any change in Section 6.04 or 6.07 or
the second sentence of this Section 9.02, or

(ix)       modify any Guarantees in any manner
adverse to the Holders.

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

An amendment under this Section 9.02 may not make any
change that adversely affects the rights under Article 10 or Article 12 of any
holder of Senior Indebtedness then outstanding unless the holders of such
Senior Indebtedness (or any group or Representative thereof authorized to give
a consent) consent to such change.

After an amendment under this Section 9.02 becomes
effective, the Issuers shall mail to the Holders a notice briefly describing
such amendment.  The failure to give such
notice to all Holders, or any defect therein, shall not impair or affect the
validity of an amendment under this Section 9.02.

SECTION 9.03.   Compliance
with Trust Indenture Act.  From the
date on which this Indenture is qualified under the TIA, every amendment,
waiver or supplement to this Indenture or the Securities shall comply with the
TIA as then in effect.

SECTION 9.04.   Revocation
and Effect of Consents and Waivers. 
(a)  A consent to an amendment or
a waiver by a Holder of a Security shall bind the Holder and every subsequent
Holder of that Security or portion of the Security that evidences the same debt
as the consenting Holder’s Security, even if notation of the consent or waiver
is not made on the Security.  However,
any such Holder or subsequent Holder may revoke the consent or waiver as to
such Holder’s Security or portion of the Security if the Trustee receives the
notice of revocation before the date on which the Trustee receives an Officers’
Certificate from the Issuers certifying that the requisite principal amount of
Securities have consented.  After an
amendment or waiver becomes effective, it shall bind every Holder.  An amendment or waiver becomes 

 

87

 

effective upon the (i)
receipt by the Issuers or the Trustee of consents by the Holders of the
requisite principal amount of securities, (ii) satisfaction of conditions to
effectiveness as set forth in this Indenture and any indenture supplemental
hereto containing such amendment or waiver and (iii) execution of such
amendment or waiver (or supplemental indenture) by the Issuers and the Trustee.

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

SECTION 9.05.   Notation
on or Exchange of Securities.  If an
amendment, supplement or waiver changes the terms of a Security, the Issuers may
require the Holder of the Security to deliver it to the Trustee.  The Trustee may place an appropriate notation
on the Security regarding the changed terms and return it to the Holder.  Alternatively, if the Issuers or the Trustee
so determines, the Issuers in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.  Failure to make the appropriate notation or
to issue a new Security shall not affect the validity of such amendment,
supplement or waiver.

SECTION 9.06.   Trustee
to Sign Amendments.  The Trustee
shall sign any amendment, supplement or waiver authorized pursuant to this
Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. 
If it does, the Trustee may but need not sign it.  In signing such amendment, the Trustee shall
be entitled to receive indemnity reasonably satisfactory to it and shall be provided
with, and (subject to Section 7.01) shall be fully protected in relying upon,
an Officers’ Certificate and an Opinion of Counsel stating that such amendment,
supplement or waiver 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 the Guarantors, enforceable against them in accordance with its
terms, subject to customary exceptions, and complies with the provisions hereof
(including Section 9.03).

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 Securities unless such
consideration is offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating
to such consent, waiver or agreement.

SECTION 9.08.   Additional
Voting Terms; Calculation of Principal Amount.  All Securities issued under this Indenture
shall vote and consent together on all matters (as to which any of such
Securities may vote) as one class and no series of Securities will have the
right to vote or consent as a separate class on any matter.  Determinations as to whether Holders of the 

 

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requisite aggregate
principal amount of Securities have concurred in any direction, waiver or
consent shall be made in accordance with this Article 9 and Section 2.14.

ARTICLE 10

SUBORDINATION OF THE SECURITIES

SECTION 10.01.  
Agreement to Subordinate. 
The Issuers agree, and each Holder by accepting a Security agrees, that
the Indebtedness evidenced by the Securities is subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment 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
Securities shall in all respects rank pari passu in right of payment with all
existing and future Pari Passu Indebtedness of the Issuers and shall rank
senior in right of payment to all existing and future Subordinated Indebtedness
of the Issuers; and only Indebtedness of an Issuer that is Senior Indebtedness
of such Issuer shall rank senior to the Securities in accordance with the
provisions set forth herein.  For
purposes of this Article 10, the Indebtedness evidenced by the Securities shall
be deemed to include any Additional Interest payable pursuant to the provisions
set forth in the Securities and the Registration Agreement.  All provisions of this Article 10 shall be subject
to Section 10.12.

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

(a)           holders of Senior Indebtedness of the
Company shall be entitled to receive payment in full in cash of such Senior
Indebtedness (including interest accruing after, or which would accrue but for,
the commencement of any such proceeding at the rate specified in the applicable
Senior Indebtedness, whether or not a claim for such interest would be allowed)
before Holders shall be entitled to receive any payment of principal of or
interest on the Securities; and

(b)           until the Senior Indebtedness of the
Company is paid in full in cash, any payment or distribution to which Holders
would be entitled but for this Article 10 shall be made to holders of such
Senior Indebtedness as their interests may appear, except that the Holders may
receive and retain (a) Permitted Junior Securities and (b) payments made from
the trust described under Article 8, so long as, on the date or dates the
respective amounts were paid into the trust such payments were made with
respect to the Securities without violating this Article 10.

SECTION 10.03.  
Default on Designated Senior Indebtedness.  The Issuers may not pay principal of, premium
(if any) or interest on, the Securities or make any deposit pursuant to the provisions
described under Section 8.01 and may not otherwise purchase, redeem or
otherwise retire any Securities (except that the Holders may receive and retain
(a) Permitted Junior Securities and (b) payments made from the trust described
under Article 8) (collectively, “pay the Securities”) if:

 

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(1)           a default in the payment of the
principal of, premium, if any, or interest on any Designated Senior
Indebtedness of the Company occurs and is continuing or any other amount owing
in respect of any Designated Senior Indebtedness of the Company is not paid
when due, or

(2)           any other default on Designated
Senior Indebtedness of the Company occurs and the maturity of such Designated
Senior Indebtedness of the Company is accelerated in accordance with its terms,

unless, in either case, the 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 may pay the
Securities without regard to the foregoing if the Company and the Trustee
receive written notice approving such payment from the Representative of the
holders of such Designated Senior Indebtedness with respect to which either of
the events set forth in clause (1) or (2) of this sentence has occurred and is
continuing.  During the continuance of
any default (other than a default described in clause (1) or (2) of the
preceding sentence) with respect to any Designated Senior Indebtedness of the
Company pursuant to which the maturity thereof may be accelerated immediately
without further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, the Company
may not pay the Securities for a period (a “Payment Blockage Period”)
commencing upon the receipt by the Trustee (with a copy to the Company) of
written notice (a “Blockage Notice”) of such default from the Representative of
the holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice; (ii) by
repayment in full in cash of such Designated Senior Indebtedness; or (iii)
because the default giving rise to such Blockage Notice is no longer
continuing).  Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section 10.03 and in Section
10.02), unless the holders of such Designated Senior Indebtedness or the
Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness or a payment default exists, the Company may
resume payments on the Securities after the end of such Payment Blockage
Period.  Not more than one Blockage
Notice may be given in any consecutive 360-day period, irrespective of the
number of defaults with respect to Designated Senior Indebtedness during such
period.  In no event, however, may the
total number of days during which any Payment Blockage Period is in effect
exceed 179 days in the aggregate during any 360 consecutive day period.  For purposes of this Section 10.03, no
default or event of default that existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period shall be, or be
made, the basis of the commencement of a subsequent Payment Blockage Period by
the Representative of such Designated Senior Indebtedness, whether or not
within a period of 360 consecutive days, unless such default or event of
default shall have been cured or waived for a period of not less than 90
consecutive days (it being understood that any subsequent action or any breach
of any financial covenants for a period commencing after the date of
commencement of such Payment Blockage Period that, in either case, would give
rise to an event of default pursuant to any provision of the Designated Senior
Indebtedness under which an event of default previously existed or was
continuing shall constitute a new event of default for this purpose).

 

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SECTION 10.04.  
Acceleration of Payment of Securities.  If payment of the Securities is accelerated
because of an Event of Default, the Company or the Trustee (provided
that the Trustee shall have received written notice from the Company, on which
notice the Trustee shall be entitled to conclusively rely) shall promptly
notify the holders of the Designated Senior Indebtedness of the Company (or
their Representative) of the acceleration.

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

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

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

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

(b)           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 Company to receive distributions
otherwise payable to the Holders.

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

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

The Trustee in its individual or any other capacity
may hold Senior Indebtedness of the Company with the same rights it would have
if it were not Trustee.  The Registrar
and any Paying Agent may do the same with like rights.  The Trustee shall be entitled to all the
rights set forth in this Article 10 with respect to any Senior Indebtedness of
the Company which may at 

 

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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 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 Company, the distribution
may be made and the notice given to their Representative (if any).

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

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

SECTION 10.13.  
Trustee Entitled to Rely. 
Upon any payment or distribution pursuant to this Article 10, the
Trustee and the 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 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
for the holders of Senior Indebtedness of the Company for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
10.  In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of the Company to participate
in any payment or distribution pursuant to this Article 10, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
Article 10, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.  The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 10.

SECTION 10.14.  
Trustee to Effectuate Subordination.  Each Holder by accepting a Security
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination between
the Holders 

 

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and the holders of Senior
Indebtedness of the Company as provided in this Article 10 and appoints the
Trustee as attorney-in-fact for any and all such purposes.

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

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

Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness of the Company 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 Company, 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 Company, or otherwise amend or supplement in any manner
Senior Indebtedness of the Company, or any instrument evidencing the same or
any agreement under which Senior Indebtedness of the Company is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Indebtedness of the Company; (iii)
release any Person liable in any manner for the payment or collection of Senior
Indebtedness of the Company; and (iv) exercise or refrain from exercising any
rights against the Company and any other Person.

ARTICLE 11

GUARANTEES

SECTION 11.01.  
Guarantees.  (a)  Each Guarantor hereby jointly and severally,
irrevocably and unconditionally guarantees, as a primary obligor and not merely
as a surety, to each Holder and to the Trustee and its successors and assigns
(i) the full and punctual payment when due, whether at Stated Maturity, by
acceleration, by redemption or otherwise, of all obligations of the Issuers
under this Indenture (including obligations to the Trustee) and the Securities,
whether for payment of principal of, premium, if any, or interest on in respect
of the Securities and all other monetary obligations of the Issuers under this
Indenture and the Securities and (ii) the full and punctual performance within
applicable grace periods of all other obligations of the Issuers whether for
fees, expenses, indemnification or otherwise under this 

 

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Indenture and the
Securities (all the foregoing being hereinafter collectively called the “Guaranteed
Obligations”).  Each Guarantor further
agrees that the Guaranteed Obligations may be extended or renewed, in whole or
in part, without notice or further assent from each such Guarantor, and that
each such Guarantor shall remain bound under this Article 11 notwithstanding
any extension or renewal of any Guaranteed Obligation.

(b)           Each Guarantor waives presentation to, demand of payment
from and protest to the Issuers of any of the Guaranteed Obligations and also
waives notice of protest for nonpayment. 
Each Guarantor waives notice of any default under the Securities or the
Guaranteed Obligations.  The obligations
of each Guarantor hereunder shall not be affected by (i) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Issuers or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (ii) any extension or renewal
of this Indenture, the Securities or any other agreement; (iii) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Securities or any other agreement; (iv) the release of any
security held by any Holder or the Trustee for the Guaranteed Obligations or
any Guarantor; (v) the failure of any Holder or Trustee to exercise any right
or remedy against any other guarantor of the Guaranteed Obligations; or (vi)
any change in the ownership of such Guarantor, except as provided in Section
11.02(b).

(c)           Each Guarantor hereby waives any right to which it may be
entitled to have its obligations hereunder divided among the Guarantors, such
that such Guarantor’s obligations would be less than the full amount
claimed.  Each Guarantor hereby waives
any right to which it may be entitled to have the assets of the Issuers first
be used and depleted as payment of the Issuers’ or such Guarantor’s obligations
hereunder prior to any amounts being claimed from or paid by such Guarantor
hereunder.  Each Guarantor hereby waives
any right to which it may be entitled to require that the Issuers be sued prior
to an action being initiated against such Guarantor.

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

(e)           The Guarantee of each Guarantor is, to the extent and in
the manner set forth in Article 12, subordinated and subject in right of
payment to the prior payment in full of the principal of and premium, if any,
and interest on all Senior Indebtedness of the relevant Guarantor and is made
subject to such provisions of this Indenture.

(f)            Except as expressly set forth in Sections 8.01(b), 11.02
and 11.06, the obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall
not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise.  Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to 

 

94

 

enforce any remedy under
this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of any Guarantor or would otherwise
operate as a discharge of any Guarantor as a matter of law or equity.

(g)           Each Guarantor agrees that its Guarantee shall remain in
full force and effect until payment in full of all the Guaranteed
Obligations.  Each Guarantor further
agrees that its Guarantee herein shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest on any Guaranteed Obligation is rescinded or must
otherwise be restored by any Holder or the Trustee upon the bankruptcy or
reorganization of the Issuers or otherwise.

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

(i)            Each Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
Guaranteed Obligations guaranteed hereby until payment in full of all
Guaranteed Obligations and all obligations to which the Guaranteed Obligations
are subordinated as provided in Article 12. 
Each Guarantor further agrees that, as between it, on the one hand, and
the Holders and the Trustee, on the other hand, (i) the maturity of the
Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Article 6 for the purposes of any Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Article 6, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section 11.01.

(j)            Each Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys’ fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Section 11.01.

(k)           Upon request of the Trustee, each Guarantor shall execute
and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of
this Indenture.

SECTION 11.02.  
Limitation on Liability. 
(a)  Any term or provision of this
Indenture to the contrary notwithstanding, the maximum aggregate amount of the
Guaranteed 

 

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Obligations guaranteed
hereunder by any Guarantor shall not exceed the maximum amount that can be
hereby guaranteed without rendering this Indenture, as it relates to such
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors
generally.

(b)           A Guarantee as to any Guarantor shall terminate and be of
no further force or effect and such Guarantor shall be deemed to be released
from all obligations under this Article 11 upon:

(i)    the sale, disposition or other transfer
(including through merger or consolidation) of the Capital Stock (including any
sale, disposition or other transfer following which the applicable Guarantor is
no longer a Restricted Subsidiary) of the applicable Guarantor if such sale,
disposition or other transfer is made in compliance with this Indenture,

(ii)   the Company designating such Guarantor to be
an Unrestricted Subsidiary in accordance with the provisions set forth under
Section 4.04 and the definition of “Unrestricted Subsidiary,”

(iii)  in the case of any Restricted Subsidiary that
after the Issue Date is required to guarantee the Securities pursuant to
Section 4.11, the release or discharge of the guarantee by such Restricted
Subsidiary of Indebtedness of the Company or any Restricted Subsidiary of the
Company or such Restricted Subsidiary or the repayment of the Indebtedness or
Disqualified Stock, in each case, which resulted in the obligation to guarantee
the Securities, and

(iv)  the Issuers’ exercise of their defeasance
options under Article 8, or if the Issuers’ obligations under this Indenture
are discharged in accordance with the terms of this Indenture.

In the case of clause (b)(i) above, such Guarantor
shall be released from its guarantees, if any, of, and all pledges and security,
if any, granted in connection with, the Credit Agreement and any other
Indebtedness of the Issuers or any Restricted Subsidiary of the Issuers.

A Guarantee also shall be automatically released upon
the applicable Subsidiary ceasing to be a Subsidiary as a result of any
foreclosure of any pledge or security interest securing Bank Indebtedness or
other exercise of remedies in respect thereof or if such Subsidiary is released
from its guarantees of, and all pledges and security interests granted in connection
with, the Credit Agreement and any other Indebtedness of the Issuers or any
Restricted Subsidiary of the Company which results in the obligation to
guarantee the Securities.

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

 

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

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

SECTION 11.06.  
Execution of Supplemental Indenture for Future Guarantors.  Each Subsidiary and other Person which is
required to become a Guarantor pursuant to Section 4.11 shall promptly execute
and deliver to the Trustee a supplemental indenture in the form of Exhibit D
hereto pursuant to which such Subsidiary or other Person shall become a
Guarantor under this Article 11 and shall guarantee the Guaranteed
Obligations.  Concurrently with the
execution and delivery of such supplemental indenture, the Issuers shall
deliver to the Trustee an Opinion of Counsel and an Officers’ Certificate to
the effect that such supplemental indenture has been duly authorized, executed
and delivered by such Subsidiary or other Person and that, subject to the
application of bankruptcy, insolvency, moratorium, fraudulent conveyance or
transfer and other similar laws relating to creditors’ rights generally and to
the principles of equity, whether considered in a proceeding at law or in
equity, the Guarantee of such Guarantor is a valid and binding obligation of
such Guarantor, enforceable against such Guarantor in accordance with its terms
and/or to such other matters as the Trustee may reasonably request.

SECTION 11.07.  
Non-Impairment.  The
failure to endorse a Guarantee on any Security shall not affect or impair the
validity thereof.

ARTICLE 12

SUBORDINATION OF THE GUARANTEES

SECTION 12.01.  
Agreement to Subordinate. 
Each Guarantor agrees, and each Holder by accepting a Security agrees,
that the obligations of a Guarantor hereunder 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 Senior Indebtedness of such Guarantor.  The obligations hereunder with respect to a
Guarantor shall in all respects rank pari passu in right of payment with all
existing and future Pari Passu Indebtedness of such Guarantor and shall rank
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 of such Guarantor shall rank senior to the obligations of such
Guarantor in accordance with the provisions set forth herein.  For purposes of this Article 12, the 

 

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Indebtedness evidenced by
the Securities shall be deemed to include any Additional Interest payable
pursuant to the provisions set forth in the Securities and the Registration
Agreement.  All provisions of this
Article 12 shall be subject to Section 12.16.

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 bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to such
Guarantor and its properties:

(a)           holders of Senior Indebtedness of
such Guarantor shall be entitled to receive payment in full in cash of such
Senior Indebtedness (including interest accruing after, or which would accrue
but for, the commencement of any such proceeding at the rate specified in the
applicable Senior Indebtedness, whether or not a claim for such interest would
be allowed) before the Holders shall be entitled to receive any payment pursuant
to any Guaranteed Obligations from such Guarantor; and

(b)           until the Senior Indebtedness of such
Guarantor is paid in full in cash, any payment or distribution to which the
Holders would be entitled but for this Article 12 shall be made to holders of
such Senior Indebtedness as their interests may appear, except that the Holders
may receive and retain Permitted Junior Securities.

SECTION 12.03.  
Default on Designated Senior Indebtedness of a Guarantor.  A Guarantor may not make any payment pursuant
to any of the Guaranteed Obligations or otherwise purchase, redeem or otherwise
retire any Securities (except that the Holders may receive and retain (a)
Permitted Junior Securities and (b) payments made from the trust described
under Article 8 (collectively, “pay its Guarantee”) if:

(1)           a default in the payment of the
principal of, premium, if any, or interest on any Designated Senior
Indebtedness of such Guarantor occurs and is continuing or any other amount
owing in respect of any Designated Senior Indebtedness of such Guarantor is not
paid when due, or

(2)           any other default on Designated
Senior Indebtedness of such Guarantor occurs and the maturity of such
Designated Senior Indebtedness of such Guarantor is accelerated in accordance
with its terms,

unless, in either case, the 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, such Guarantor may pay
its Guarantee without regard to the foregoing if such Guarantor and the Trustee
receive written notice approving such payment from the Representative of the
holders of such Designated Senior Indebtedness with respect to which either of
the events set forth in clause (1) or (2) of this sentence has occurred and is
continuing.  During the continuance of
any default (other than a default described in clause (1) or (2) of the
preceding sentence) with respect to any Designated Senior Indebtedness of a
Guarantor pursuant to which the maturity thereof may be accelerated immediately
without further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, such Guarantor
may not pay its Guarantee for a period (a “Guarantee Payment 

 

98

 

Blockage Period”) commencing upon the receipt by the
Trustee (with a copy to such Guarantor and the Company) of written notice (a “Guarantee
Blockage Notice”) of such default from the Representative of the holders of
such Designated Senior Indebtedness specifying an election to effect a
Guarantee Payment Blockage Period and ending 179 days thereafter (or earlier if
such Guarantee Payment Blockage Period is terminated (i) by written notice to
the Trustee, such Guarantor and the Company from the Person or Persons who gave
such Guarantee Blockage Notice; (ii) by repayment in full in cash of such
Designated Senior Indebtedness; or (iii) because the default giving rise to
such Guarantee Blockage Notice is no longer continuing).  Notwithstanding the provisions described in
the immediately preceding sentence (but subject to the provisions contained in
the first sentence of this Section 12.03 and in Section 12.02(b)), unless the
holders of such Designated Senior Indebtedness or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness or a payment default exists, such Guarantor may resume payments on
its Guarantee after the end of such Guarantee Payment Blockage Period (including
any missed payments).  Not more than one
Guarantee Blockage Notice may be given with respect to a Guarantor in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness during such period.  In no event, however, may the total number of
days during which any Guarantee Payment Blockage Period is in effect exceed 179
days in the aggregate during any 360 consecutive day period.  For purposes of this Section 12.03, no
default or event of default that existed or was continuing on the date of the
commencement of any Guarantee Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Guarantee Payment Blockage
Period shall be, or be made, the basis of the commencement of a subsequent
Guarantee Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such default or event of default shall have been cured or waived for a
period of not less than 90 consecutive days (it being understood that any
subsequent action or any breach of any financial covenants for a period
commencing after the date of commencement of such Guarantee Payment Blockage
Period that, in either case, would give rise to an event of default pursuant to
any provision of the Designated Senior Indebtedness under which an event of
default previously existed or was continuing shall constitute a new event of
default for this purpose).

SECTION 12.04.  
Demand for Payment.  If
payment of the Securities is accelerated because of an Event of Default and a
demand for payment is made on a Guarantor pursuant to Article 11, the Issuers,
the Guarantor or the Trustee (provided that the Trustee shall have
received written notice from the Issuers or such Guarantor, on which notice the
Trustee shall be entitled to conclusively rely) shall promptly notify the
holders of the Designated Senior Indebtedness of such Guarantor (or the
Representative of such holders) of such demand.

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

SECTION 12.06.  
Subrogation.  After all
Senior Indebtedness of a Guarantor is paid in full and until the Securities are
paid in full in cash, the Holders shall be subrogated to the rights of holders
of Senior Indebtedness of such Guarantor to receive distributions applicable to

 

99

 

Senior Indebtedness of
such Guarantor.  A distribution made
under this Article 12 to holders of Senior Indebtedness of such Guarantor which
otherwise would have been made to the Holders is not, as between such Guarantor
and the Holders, a payment by such Guarantor on Senior Indebtedness of such Guarantor.

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

(a)           impair, as between a Guarantor and
the Holders, the obligation of a Guarantor which is absolute and unconditional,
to make payments with respect to the Guaranteed Obligations to the extent set
forth in Article 11; or

(b)           prevent the Trustee or any Holder
from exercising its available remedies upon a default by a Guarantor under its
obligations with respect to the Guaranteed Obligations, subject to the rights
of holders of Senior Indebtedness of such Guarantor to receive distributions
otherwise payable to the Holders.

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 hereunder shall be impaired by any act or failure to act by such
Guarantor or by its failure to comply with this Indenture.

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

The Trustee in its individual or any other capacity
may hold Senior Indebtedness of a Guarantor with the same rights it would have
if it were not Trustee.  The Registrar
and co-registrar and any Paying Agent may do the same with like rights.  The Trustee shall be entitled to all the
rights set forth in this Article 12 with respect to any Senior Indebtedness of
a Guarantor which may at any time be held by it, to the same extent as any
other holder of Senior Indebtedness of such Guarantor; 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 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
Accelerate.  The failure of a
Guarantor to make a payment on any of its obligations by reason of any
provision in this Article 12 shall not be construed as preventing the
occurrence of a default 

 

100

 

by such Guarantor under
such obligations.  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.

SECTION 12.12.  
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 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
for the holders of Senior Indebtedness of a Guarantor for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness of a Guarantor and other
Indebtedness of a 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 may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 12, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.  The provisions of Sections 7.01 and 7.02
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article 12.

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

SECTION 12.14.  
Trustee Not Fiduciary for Holders of Senior Indebtedness of a
Guarantor.  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 the Holders or the relevant 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 12.15.  
Reliance by Holders of Senior Indebtedness of a Guarantor on Subordination
Provisions.  Each Holder by accepting
a Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder
of any Senior Indebtedness of a Guarantor, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.

 

101

 

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 a 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 a Guarantor, or otherwise amend or supplement in any manner
Senior Indebtedness of a Guarantor, or any instrument evidencing the same or
any agreement under which Senior Indebtedness of a Guarantor is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Indebtedness of a Guarantor; (iii)
release any Person liable in any manner for the payment or collection of Senior
Indebtedness of a Guarantor; and (iv) exercise or refrain from exercising any
rights against such Guarantor and any other Person.

SECTION 12.16.  
Trust Monies Not Subordinated. 
Notwithstanding anything contained herein to the contrary, payments from
money or the proceeds of Government Obligations held in trust under Article 8
by the Trustee and deposited at a time when permitted by the subordination
provisions of this Article 12 for the payment of principal of and interest on
the Securities 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 a Guarantor or any holder of Senior Indebtedness of a Guarantor or
any other creditor of a Guarantor.

ARTICLE 13

MISCELLANEOUS

SECTION 13.01.  
Trust Indenture Act Controls. 
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by, or with another provision (an
“incorporated provision”) included in this Indenture by operation of, Sections
310 to 318 of the TIA, inclusive, such imposed duties or incorporated provision
shall control.

SECTION 13.02.  
Notices.  (a)  Any notice or communication required or
permitted hereunder shall be in writing and delivered in person, via facsimile
or mailed by first-class mail addressed as follows:

if to the Issuers or a
Guarantor:

RBS Global, Inc. 

4701 Greenfield Avenue

Milwaukee, Wisconsin 53214

Attention of:  General Counsel

Facsimile: (414) 643-2510

 

 

102

 

 

if to the Trustee:

Well Fargo Bank, National Association

Sixth & Marquette; N9303-120

Minneapolis, MN 
55479

Attention of: 
Corporate Trust Services

Facsimile:  (612) 667-9825

 

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

(b)           Any notice or communication mailed to a Holder shall be
mailed, first class mail, to the Holder at the Holder’s address as it appears
on the registration books of the Registrar and shall be sufficiently given if
so mailed within the time prescribed.

(c)           Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other
Holders.  If a notice or communication is
mailed in the manner provided above, it is duly given, whether or not the
addressee receives it, except that notices to the Trustee are effective only if
received.

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

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

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

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

SECTION 13.05.  
Statements Required in Certificate or Opinion.  Each certificate or opinion with respect to
compliance with a covenant or condition provided for in this Indenture (other
than pursuant to Section 4.09) shall include:

(a)           a statement that the individual
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;

 

103

 

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

(d)           a statement as to whether or not, in
the opinion of such individual, such covenant or condition has been complied
with; provided, however, that with respect to matters of
fact an Opinion of Counsel may rely on an Officers’ Certificate or certificates
of public officials.

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

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

SECTION 13.08.  
Legal Holidays.  If a
payment date is not a Business Day, payment shall be made on the next
succeeding day that is a Business Day, and no interest shall accrue on any
amount that would have been otherwise payable on such payment date if it were a
Business Day for the intervening period. 
If a regular record date is not a Business Day, the record date shall
not be affected.

SECTION 13.09.  
GOVERNING LAW.  THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.

SECTION 13.10.  
No Recourse Against Others. 
No director, officer, employee, manager, incorporator or holder of any
Equity Interests in the Issuers or of any Guarantor or any direct or indirect
parent corporation, as such, shall have any liability for any obligations of
the Issuers or the Guarantors under the Securities or this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Securities by accepting a
Security waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Securities.

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

 

104

 

SECTION 13.12.  
Multiple Originals.  The
parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.  One signed copy is enough to prove this Indenture.

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

SECTION 13.14.  
Indenture Controls.  If and
to the extent that any provision of the Securities limits, qualifies or
conflicts with a provision of this Indenture, such provision of this Indenture
shall control.

SECTION 13.15.  
Severability.  In case any
provision in this Indenture 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 and such provision shall be ineffective
only to the extent of such invalidity, illegality or unenforceability.

 

[Remainder of page
intentionally left blank]

 

105

 

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

 

	
   

  	
  CHASE
  MERGER SUB, INC.

  
	
   

  	
  By:

  	
  /s/ Patricia M. Navis

  
	
   

  	
   

  	
  Name: Patricia M. Navis

  
	
   

  	
   

  	
  Title: Vice President
  and Secretary

  
	
   

  	
   

  	
   

  

 

 

S-1

 

	
   

  	
  WELLS FARGO BANK, NATIONAL
  ASSOCIATION, as Trustee

  
	
   

  	
  By: 

  	
  /s/ Timothy P. Mowdy

  
	
   

  	
   

  	
  Name: Timothy P. Mowdy

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

S-2

 

APPENDIX
A

 

PROVISIONS RELATING TO INITIAL SECURITIES, ADDITIONAL
SECURITIES AND EXCHANGE SECURITIES

1.             Definitions.

1.1          Definitions.

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

“Additional Interest” has the meaning set forth in the
Registration Agreement.

“Definitive Security” means a certificated Initial
Security or Exchange Security (bearing the Restricted Securities Legend if the
transfer of such Security is restricted by applicable law) that does not
include the Global Securities Legend.

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

“Global Securities Legend” means the legend set forth
under that caption in the applicable Exhibit to this Indenture.

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

“Initial Purchasers” means Credit Suisse Securities
(USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bear,
Stearns & Co. Inc. and Lehman Brothers Inc., and such other initial
purchasers party to the Purchase Agreement entered into in connection with the
offer and sale of the Securities.

“Purchase Agreement” means (a) the Purchase Agreement
dated July 14, 2006, among the Company and the Initial Purchasers and (b) any
other similar Purchase Agreement relating to Additional Securities.

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

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

“Registration Agreement” means (a) the Registration
Rights Agreement dated as of July 21, 2006 among the Issuers, the Guarantors
and the Initial Purchasers relating to the Securities and (b) any other similar
Registration Rights Agreement relating to Additional Securities.

 

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

“Regulation S Securities” means all Initial Securities
offered and sold outside the United States in reliance on Regulation S.

“Restricted Period,” with respect to any Securities,
means the period of 40 consecutive days beginning on and including the later of
(a) the day on which such Securities are first offered to persons other than
distributors (as defined in Regulation S under the Securities Act) in reliance
on Regulation S, notice of which day shall be promptly given by the Company to
the Trustee, and (b) the Issue Date, and with respect to any Additional
Securities that are Transfer Restricted Securities, it means the comparable
period of 40 consecutive days.

“Restricted Securities Legend” means the legend set
forth in Section 2.2(f)(i) herein.

“Rule 501” means Rule 501(a)(1), (2), (3) or (7) under
the Securities Act.

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

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

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

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

“Transfer Restricted Securities” means Definitive
Securities and any other Securities that bear or are required to bear or are
subject to the Restricted Securities Legend.

“Unrestricted Definitive Security” means Definitive
Securities and any other Securities that are not required to bear, or are not
subject to, the Restricted Securities Legend.

1.2          Other
Definitions.

	
  Term:

  	
  Defined in
  Section:

  
	
   

  	
   

  
	
  Agent Members

  	
  2.1(b)

  
	
  Global
  Securities

  	
  2.1(b)

  
	
  Regulation S
  Global Securities

  	
  2.1(b)

  
	
  Rule 144A Global
  Securities

  	
  2.1(b)

  
	
  Regulation S
  Permanent Global Security

  	
  2.1(b)

  
	
  Regulation S
  Temporary Global Security

  	
  2.1(b)

  
	
   

  	
   

  

 

2

 

2.             The Securities.

2.1          Form and Dating; Global Securities.

(a)           The
Initial Securities issued on the date hereof will be (i) offered and sold by
the Issuers pursuant to the Purchase Agreement and (ii) resold, initially only
to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons
(as defined in Regulation S) in reliance on Regulation S.  Such Initial Securities may thereafter be
transferred to, among others, QIBs, purchasers in reliance on Regulation S and,
except as set forth below, IAIs in accordance with Rule 501.  Additional Securities offered after the date
hereof may be offered and sold by the Issuers from time to time pursuant to one
or more Purchase Agreements in accordance with applicable law.

(b)           Global
Securities.  (i) Rule 144A Securities
initially shall be represented by one or more Securities in definitive, fully
registered, global form without interest coupons (collectively, the “Rule 144A
Global Securities”).

Regulation S Securities initially shall be represented
by one or more Securities in fully registered, global form without interest
coupons (collectively, the “Regulation S Temporary Global Security” and,
together with the Regulation S Permanent Global Security (defined below), the “Regulation
S Global Securities”), which shall be registered in the name of the Depository
or the nominee of the Depository for the accounts of designated agents holding
on behalf of Euroclear or Clearstream.

The Restricted Period shall be terminated upon the
receipt by the Trustee of: (1) a written certificate from the Depository,
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
Security (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 Security bearing a Private
Placement Legend, all as contemplated by this Appendix A); and (2) an Officers’
Certificate from the Company.

Following the termination of the Restricted Period,
beneficial interests in the Regulation S Temporary Global Security shall be
exchanged for beneficial interests in a permanent Global Security (the “Regulation
S Permanent Global Security”) pursuant to the applicable procedures of the
Depository.  Simultaneously with the
authentication of the Regulation S Permanent Global Security, the Trustee shall
cancel the Regulation S Temporary Global Security.  The aggregate principal amount of the
Regulation S Temporary Global Security and the Regulation S Permanent Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee and the Depository or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.

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 

 

3

 

of beneficial interests in the Regulation S Temporary
Global Security and the Regulation S Permanent Global Security that are held by
Participants through Euroclear or Clearstream.

The term “Global Securities” means the Rule 144A
Global Securities and the Regulation S Global Securities.  The Global Securities shall bear the Global
Security Legend.  The Global Securities
initially shall (i) be registered in the name of the Depository or the nominee
of such Depository, in each case for credit to an account of an Agent Member,
(ii) be delivered to the Trustee as custodian for such Depository and (iii)
bear the Restricted Securities Legend.

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

(ii)           Transfers
of Global Securities shall be limited to transfer in whole, but not in part, to
the Depository, its successors or their respective nominees.  Interests of beneficial owners in the Global
Securities may be transferred or exchanged for Definitive Securities only in
accordance with the applicable rules and procedures of the Depository and the
provisions of Section 2.2.  In addition,
a Global Security shall be exchangeable for Definitive Securities if (x) the
Depository (1) notifies the Company that it is unwilling or unable to continue
as depository for such Global Security and the Company thereupon fails to
appoint a successor depository or (2) has ceased to be a clearing agency
registered under the Exchange Act or (y) there shall have occurred and be
continuing an Event of Default with respect to such Global Security; provided that in no event shall the
Regulation S Temporary Global Security be exchanged by the Issuers for
Definitive Securities prior to (x) the expiration of the Restricted Period and
(y) the receipt by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act. 
In all cases, Definitive Securities delivered in exchange for any Global
Security or beneficial interests therein shall be registered in the names, and
issued in any approved denominations, requested by or on behalf of the
Depository in accordance with its customary procedures.

(iii)          In
connection with the transfer of a Global Security as an entirety to beneficial
owners pursuant to subsection (i) of this Section 2.1(b), such Global Security
shall be deemed to be surrendered to the Trustee for cancellation, and the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, to each beneficial owner identified by the Depository in writing in
exchange for its beneficial interest in such Global Security, an equal
aggregate principal amount of Definitive Securities of authorized
denominations.

(iv)          Any
Transfer Restricted Security delivered in exchange for an interest in a Global
Security pursuant to Section 2.2 shall, except as otherwise provided in Section
2.2, bear the Restricted Securities Legend.

 

4

 

(v)           Notwithstanding
the foregoing, through the Restricted Period, a beneficial interest in such
Regulation S Global Security may be held only through Euroclear or Clearstream
unless delivery is made in accordance with the applicable provisions of Section
2.2.

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

2.2          Transfer
and Exchange.

(a)           Transfer
and Exchange of Global Securities.  A
Global Security may not be transferred as a whole except as set forth in
Section 2.1(b).  Global Securities will
not be exchanged by the Issuers for Definitive Securities except under the
circumstances described in Section in Section 2.1(b)(ii).  Global Securities also may be exchanged or
replaced, in whole or in part, as provided in Sections 2.08 and 2.10 of this
Indenture.  Beneficial interests in a
Global Security may be transferred and exchanged as provided in Section 2.2(b)
or 2.2(g).

(b)           Transfer
and Exchange of Beneficial Interests in Global Securities.  The transfer and exchange of beneficial interests
in the Global Securities shall be effected through the Depository, in
accordance with the provisions of this Indenture and the applicable rules and
procedures of the Depository.  Beneficial
interests in Restricted Global Securities shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act.  Beneficial interests in
Global Securities shall be transferred or exchanged only for beneficial interests
in Global Securities.  Transfers and
exchanges of beneficial interests in the Global Securities 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 Security.  Beneficial interests in any Restricted Global
Security may be transferred to Persons who take delivery thereof in the form of
a beneficial interest in the same Restricted Global Security in accordance with
the transfer restrictions set forth in the Restricted Securities Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of beneficial
interests in a Regulation S Global Security 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).  A beneficial interest in an
Unrestricted Global Security may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Security.  No written orders or
instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.2(b)(i).

(ii)           All
Other Transfers and Exchanges of Beneficial Interests in Global Securities.  In connection with all transfers and
exchanges of beneficial interests in any Global Security that is not subject to
Section 2.2(b)(i), the transferor of such beneficial interest must deliver to
the Registrar (1) a written order from an Agent Member given to the Depository
in accordance with the applicable rules and procedures of the Depository
directing the Depository to credit or cause to be credited a beneficial
interest in another Global Security in an amount equal to the beneficial
interest to be transferred or 

 

5

 

exchanged and (2)
instructions given in accordance with the applicable rules and procedures of
the Depository containing information regarding the Agent Member account to be
credited with such increase.  Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Securities contained in this Indenture and the Securities
or otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Security pursuant to Section 2.2(g).

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

(A)          if the transferee will take delivery in the form of a
beneficial interest in a Rule 144A Global Security, then the transferor must
deliver a certificate in the form attached to the applicable Security; and

(B)          if the transferee will take delivery in the form of a
beneficial interest in a Regulation S Global Security, then the transferor must
deliver a certificate in the form attached to the applicable Security.

(iv)          Transfer
and Exchange of Beneficial Interests in a Transfer Restricted Global Security
for Beneficial Interests in an Unrestricted Global Security.  A beneficial interest in a Transfer
Restricted Global Security may be exchanged by any holder thereof for a
beneficial interest in an Unrestricted Global Security or transferred to a
Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Security if the exchange or transfer complies with the
requirements of Section 2.2(b)(ii) above and the Registrar receives the
following:

(A)          if the holder of such beneficial interest in a Restricted
Global Security proposes to exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Security, a certificate from such holder in
the form attached to the applicable Security; or

(B)          if the holder of such beneficial interest in a Restricted
Global Security 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 Security, a certificate from such holder in the form
attached to the applicable Security,

and, in each such case, if
the Company or the Registrar so requests or if the applicable rules and
procedures of the Depository 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 Restricted Securities Legend are no longer
required in order to maintain compliance with the Securities Act.  If any such transfer or exchange is effected
pursuant 

 

6

 

to this subparagraph (iv)
at a time when an Unrestricted Global Security has not yet been issued, the
Issuers shall issue and, upon receipt of an written order of the Company in the
form of an Officers’ Certificate in accordance with Section 2.01, the Trustee
shall authenticate one or more Unrestricted Global Securities in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred or exchanged pursuant to this subparagraph (iv).

(v)           Transfer
and Exchange of Beneficial Interests in an Unrestricted Global Security for
Beneficial Interests in a Restricted Global Security.  Beneficial interests in an Unrestricted
Global Security cannot be exchanged for, or transferred to Persons who take
delivery thereof in the form of, a beneficial interest in a Restricted Global
Security.

(c)           Transfer
and Exchange of Beneficial Interests in Global Securities for Definitive
Securities.  A beneficial interest in
a Global Security may not be exchanged for a Definitive Security except under
the circumstances described in Section 2.1(b)(ii).  A beneficial interest in a Global Security
may not be transferred to a Person who takes delivery thereof in the form of a
Definitive Security except under the circumstances described in Section
2.1(b)(ii).  In any case, beneficial
interests in Global Securities shall be transferred or exchanged only for
Definitive Securities.

(d)           Transfer
and Exchange of Definitive Securities for Beneficial Interests in Global
Securities.  Transfers and exchanges
of beneficial interests in the Global Securities also shall require compliance
with either subparagraph (i), (ii) or (ii) below, as applicable:

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

(A)          if the Holder of such Transfer Restricted Security proposes
to exchange such Transfer Restricted Security for a beneficial interest in a
Restricted Global Security, a certificate from such Holder in the form attached
to the applicable Security;

(B)          if such Transfer Restricted Security is being transferred
to a Qualified Institutional Buyer in accordance with Rule 144A under the
Securities Act, a certificate from such Holder in the form attached to the
applicable Security;

(C)          if such Transfer Restricted Security is being transferred
to a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate from such Holder in the
form attached to the applicable Security;

(D)          if such Transfer Restricted Security is being transferred
pursuant to an exemption from the registration requirements of the Securities
Act in 

 

7

 

accordance
with Rule 144 under the Securities Act, a certificate from such Holder in the
form attached to the applicable Security;

(E)           if such Transfer Restricted Security is being transferred to
an Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate from such Holder in the form
attached to the applicable Security, including the certifications, certificates
and Opinion of Counsel, if applicable; or

(F)           if such Transfer Restricted Security is being transferred
to the Company or a Subsidiary thereof, a certificate from such Holder in the
form attached to the applicable Security;

the Trustee shall cancel
the Transfer Restricted Security, and increase or cause to be increased the
aggregate principal amount of  the
appropriate Restricted Global Security.

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

(A)          if the Holder of such Transfer Restricted Security proposes
to exchange such Transfer Restricted Security for a beneficial interest in an
Unrestricted Global Security, a certificate from such Holder in the form
attached to the applicable Security; or

(B)          if the Holder of such Transfer Restricted Securities
proposes to transfer such Transfer Restricted Security to a Person who shall
take delivery thereof in the form of a beneficial interest in an Unrestricted
Global Security, a certificate from such Holder in the form attached to the
applicable Security,

and, in each such case,
if the Company or the Registrar so requests or if the applicable rules and
procedures of the Depository 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 Restricted Securities Legend are no longer
required in order to maintain compliance with the Securities Act.  Upon satisfaction of the conditions of this
subparagraph (ii), the Trustee shall cancel the Transfer Restricted Securities
and increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Security.  If any
such transfer or exchange is effected pursuant to this subparagraph (ii) at a
time when an Unrestricted Global Security has not yet been issued, the Company
shall issue and, upon receipt of an written order of the Company in the form of
an Officers’ Certificate, the Trustee shall authenticate one or more
Unrestricted Global Securities in 

 

8

 

an aggregate principal
amount equal to the aggregate principal amount of Transfer Restricted
Securities transferred or exchanged pursuant to this subparagraph (ii).

(iii)          Unrestricted
Definitive Securities to Beneficial Interests in Unrestricted Global Securities.  A Holder of an Unrestricted Definitive
Security may exchange such Unrestricted Definitive Security for a beneficial
interest in an Unrestricted Global Security or transfer such Unrestricted
Definitive Security to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Security at any time.  Upon receipt of a request for such an
exchange or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Security and increase or cause to be increased the aggregate
principal amount of one of the Unrestricted Global Securities.  If any such transfer or exchange is effected
pursuant to this subparagraph (iii) at a time when an Unrestricted Global
Security has not yet been issued, the Issuers shall issue and, upon receipt of
an written order of the Company in the form of an Officers’ Certificate, the
Trustee shall authenticate one or more Unrestricted Global Securities in an
aggregate principal amount equal to the aggregate principal amount of
Unrestricted Definitive Securities transferred or exchanged pursuant to this
subparagraph (iii).

(iv)          Unrestricted
Definitive Securities to Beneficial Interests in Restricted Global Securities.  An Unrestricted Definitive Security cannot be
exchanged for, or transferred to a Person who takes delivery thereof in the
form of, a beneficial interest in a Restricted Global Security.

(e)           Transfer
and Exchange of Definitive Securities for Definitive Securities.  Upon request by a Holder of Definitive Securities
and such Holder’s compliance with the provisions of this Section 2.2(e), the
Registrar shall register the transfer or exchange of Definitive
Securities.  Prior to such registration
of transfer or exchange, the requesting Holder shall present or surrender to
the Registrar the Definitive Securities 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
2.2(e).

(i)            Transfer
Restricted Securities to Transfer Restricted Securities.  A Transfer Restricted Security may be
transferred to and registered in the name of a Person who takes delivery
thereof in the form of a Transfer Restricted Security if the Registrar receives
the following:

(A)          if the transfer will be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a certificate in the form
attached to the applicable Security;

(B)          if the transfer will be made pursuant to Rule 903 or Rule
904 under the Securities Act, then the transferor must deliver a certificate in
the form attached to the applicable Security;

 

9

 

(C)          if the transfer will be made pursuant to an exemption from
the registration requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate in the form attached to the applicable
Security;

(D)          if the transfer will be made to an IAI in reliance on an
exemption from the registration requirements of the Securities Act other than
those listed in subparagraphs (A) through (D) above, a certificate in the form
attached to the applicable Security; and

(E)           if such transfer will be made to the Company or a
Subsidiary thereof, a certificate in the form attached to the applicable
Security.

(ii)           Transfer
Restricted Securities to Unrestricted Definitive Securities.  Any Transfer Restricted Security may be
exchanged by the Holder thereof for an Unrestricted Definitive Security or
transferred to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Security if the Registrar receives the following:

(1)           if the Holder of such Transfer Restricted Security
proposes to exchange such Transfer Restricted Security for an Unrestricted
Definitive Security, a certificate from such Holder in the form attached to the
applicable Security; or

(2)           if the Holder of such Transfer Restricted Security
proposes to transfer such Securities to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Security, a certificate from
such Holder in the form attached to the applicable Security,

and, in each such case,
if the Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company 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 Restricted Securities Legend are no longer required
in order to maintain compliance with the Securities Act.

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

(iv)          Unrestricted
Definitive Securities to Transfer Restricted Securities.  An Unrestricted Definitive Security cannot be
exchanged for, or transferred to a Person who takes delivery thereof in the
form of, a Transfer Restricted Security.

At such time as all beneficial interests in a
particular Global Security have been exchanged for Definitive Securities or a
particular Global Security has been redeemed, repurchased or canceled in whole
and not in part, each such Global Security shall be returned to or retained and
canceled by the Trustee in accordance with Section 2.11.  At any time prior to 

 

10

 

such cancellation, if any beneficial interest in a
Global Security is exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global
Security or for Definitive Securities, the principal amount of Securities
represented by such Global Security shall be reduced accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depository 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 Security, such other Global Security shall be increased accordingly and
an endorsement shall be made on such Global Security by the Trustee or by the
Depository at the direction of the Trustee to reflect such increase.

(f)            Legend.

(i)            Except
as permitted by the following paragraph (ii), (iii) or (iv), each Security
certificate evidencing the Global Securities and the Definitive Securities (and
all Securities issued in exchange therefor or in substitution thereof) shall
bear a legend in substantially the following form (each defined term in the
legend being defined as such for purposes of the legend only):

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

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
APPLICABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY 

 

11

 

PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS SET FORTH IN
CLAUSE (A) ABOVE.”

Each Definitive Security shall bear the following
additional legends:

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

(ii)           Upon
any sale or transfer of a Transfer Restricted Security that is a Definitive
Security, the Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive Security that does not bear the
legends set forth above and rescind any restriction on the transfer of such
Transfer Restricted Security if the Holder certifies in writing to the
Registrar that its request for such exchange was made in reliance on Rule 144
(such certification to be in the form set forth on the reverse of the Initial
Security).

(iii)          After
a transfer of any Initial Securities during the period of the effectiveness of
a Shelf Registration Statement with respect to such Initial Securities, all
requirements pertaining to the Restricted Securities Legend on such Initial
Securities shall cease to apply and the requirements that any such Initial
Securities be issued in global form shall continue to apply.

(iv)          Upon
the consummation of a Registered Exchange Offer with respect to the Initial
Securities pursuant to which Holders of such Initial Securities are offered
Exchange Securities in exchange for their Initial Securities, all requirements
pertaining to Initial Securities that Initial Securities be issued in global
form shall continue to apply, and Exchange Securities in global form without
the Restricted Securities Legend shall be available to Holders that exchange
such Initial Securities in such Registered Exchange Offer.

(v)           Upon
a sale or transfer after the expiration of the Restricted Period of any Initial
Security acquired pursuant to Regulation S, all requirements that such Initial
Security bear the Restricted Securities Legend shall cease to apply and the
requirements requiring any such Initial Security be issued in global form shall
continue to apply.

(vi)          Any
Additional Securities sold in a registered offering shall not be required to
bear the Restricted Securities Legend.

(g)           Cancellation
or Adjustment of Global Security.  At
such time as all beneficial interests in a particular Global Security have been
exchanged for Definitive Securities or a particular Global Security has been
redeemed, repurchased or canceled in whole and not in part, each such Global
Security shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11 of this Indenture. 
At any time prior to such cancellation, if any beneficial interest in a
Global Security is exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global
Security or for Definitive Securities, the principal amount of Securities
represented by such Global Security shall be reduced accordingly and an
endorsement shall be made on such Global Security by the Trustee 

 

12

 

or by the Depository 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 Security, such other Global Security
shall be increased accordingly and an endorsement shall be made on such Global
Security by the Trustee or by the Depository at the direction of the Trustee to
reflect such increase.

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

(i)            To
permit registrations of transfers and exchanges, the Issuers shall execute and
the Trustee shall authenticate, Definitive Securities and Global Securities at
the Registrar’s request.

(ii)           No
service charge shall be made for any registration of transfer or exchange, but
the Issuers may require payment of a sum sufficient to cover any transfer tax,
assessments, or similar governmental charge payable in connection therewith
(other than any such transfer taxes, assessments or similar governmental charge
payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this
Indenture).

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

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

(i)            No
Obligation of the Trustee.

(i)            The
Trustee shall have no responsibility or obligation to any beneficial owner of a
Global Security, a member of, or a participant in the Depository or any other
Person with respect to the accuracy of the records of the Depository or its
nominee or of any participant or member thereof, with respect to any ownership
interest in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of any
notice (including any notice of redemption or repurchase) or the payment of any
amount, under or with respect to such Securities.  All notices and communications to be given to
the Holders and all payments to be made to the Holders under the Securities
shall be given or made only to the registered Holders (which shall be the
Depository or its nominee in the case of a Global Security).  The rights of beneficial owners in any Global
Security shall be exercised only through the Depository subject to the
applicable rules and procedures of the Depository.  The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its members, participants and any beneficial owners.

(ii)           The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers 

 

13

 

between or among Depository participants, members or
beneficial owners in any Global Security) other than to require delivery of
such certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by, the terms of this
Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.

 

14

 

 

EXHIBIT A

[FORM OF FACE OF INITIAL
SECURITY]

[Global Securities Legend]

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

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

[Restricted Securities Legend]

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

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (III) PURSUANT TO AN 

 

A-1

 

EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF APPLICABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS SET FORTH
IN CLAUSE (A) ABOVE.”

Each Definitive Security shall bear the following
additional legend:

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

 

A-2

 

[FORM OF INITIAL SECURITY]

	
  No.

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  113⁄4% Senior Subordinated Note due 2016

  
	
   

  
	
   

  	
   

  	
  CUSIP No.

  
	
   

  	
   

  	
  ISIN No.

  

 

CHASE MERGER SUB., a Delaware corporation, promises to pay
to Cede & Co., or registered assigns, the principal sum [of                 Dollars] [listed on the
Schedule of Increases or Decreases in Global Security attached hereto](1) on
August 1, 2016.

(1)           Use the Schedule of
Increases and Decreases language if Security is in Global Form.

 

 

Interest Payment Dates:  February 1 and August 1

Record Dates: 
January 15 and July 15

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

IN WITNESS WHEREOF, the parties have caused this
instrument to be duly executed.

	
   

  	
  CHASE MERGER SUB, INC.

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Dated:

 

A-3

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

WELLS FARGO BANK,
NATIONAL ASSOCIATION,

as Trustee, certifies that this is

one of the Securities 

referred to in the Indenture.

	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  

 

*/                                                                                                                                     If the Security is to be issued in global
form, add the Global Securities Legend and the attachment from Exhibit A
captioned “TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY”.

 

A-4

 

[FORM OF REVERSE SIDE OF
INITIAL SECURITY]

113⁄4% Senior Subordinated
Note due 2016

1.             Interest

(a)           CHASE MERGER SUB, INC., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the “Company”), promises to pay interest on
the principal amount of this Security at the rate per annum shown above.  The Company shall pay interest semiannually
on February 1 and August 1 of each year, commencing February 1, 2007.  Interest on the Securities shall accrue from
the most recent date to which interest has been paid or duly provided for or,
if no interest has been paid or duly provided for, from July 21, 2006 until the
principal hereof is due.  Interest shall
be computed on the basis of a 360-day year of twelve 30-day months.  The Company shall pay interest on overdue
principal at the rate borne by the Securities, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.

(b)           Registration Rights Agreement. 
The Holder of this Security is entitled to the benefits of a
Registration Rights Agreement, dated as of July 21, 2006, among the Company,
RBS Global, Inc., Rexnord Corporation, the Guarantors and the Initial Purchasers.

2.             Method of Payment

The Company shall pay interest on the Securities
(except defaulted interest) to the Persons who are registered Holders at the
close of business on the January 15 or July 15 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date (whether or not a Business Day).  Holders must surrender Securities to the
Paying Agent to collect principal payments. 
The Company shall pay principal, premium, if any, and interest in money
of the United States of America that at the time of payment is legal tender for
payment of public and private debts. 
Payments in respect of the Securities represented by a Global Security
(including principal, premium, if any, and interest) shall be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company or any successor depositary.  The Company shall make all payments in
respect of a certificated Security (including principal, premium, if any, and
interest) at the office of the Paying Agent, except that, at the option of the
Company, payment of interest may be made by mailing a check to the registered
address of each Holder thereof; provided,
however, that payments on the
Securities may also be made, in the case of a Holder of at least $1,000,000
aggregate principal amount of Securities, by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Trustee or
Paying Agent to such effect designating such account no later than 30 days
immediately preceding the relevant due date for payment (or such other date as
the Trustee may accept in its discretion).

3.             Paying Agent and Registrar

Initially, Wells Fargo Bank, National Association, a
national banking association (the “Trustee”), will act as Paying Agent and
Registrar.  The Company may appoint and
change 

 

A-5

 

any Paying Agent or Registrar without notice.  The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

4.             Indenture

The Company issued the Securities under an Indenture
dated as of July 21, 2006 (the “Indenture”), among the Company and the
Trustee.  The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb)
as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all terms and
provisions of the Indenture, and the Holders (as defined in the Indenture) are
referred to the Indenture and the TIA for a statement of such terms and
provisions

The Securities are senior subordinated unsecured
obligations of the Company.  This
Security is one of the Initial Securities referred to in the Indenture.  The Securities include the Initial Securities,
any Additional Securities and any Exchange Securities issued in exchange for
the Initial Securities or any Additional Securities pursuant to the
Indenture.  The Initial Securities, any
Additional Securities and any Exchange Securities are treated as a single class
of securities under the Indenture.  The
Indenture imposes certain limitations on the ability of the Company and its
Restricted Subsidiaries to, among other things, make certain Investments and
other Restricted Payments, pay dividends and other distributions, incur
Indebtedness, enter into consensual restrictions upon the payment of certain
dividends and distributions by such Restricted Subsidiaries, issue or sell
shares of capital stock of the Company and such Restricted Subsidiaries, enter
into or permit certain transactions with Affiliates, create or incur Liens and
make Asset Sales.  The Indenture also
imposes limitations on the ability of the Company and each Guarantor to
consolidate or merge with or into any other Person or convey, transfer or lease
all or substantially all of its property.

To guarantee the due and punctual payment of the
principal and interest on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to
the terms of the Securities and the Indenture, the Guarantors have, jointly and
severally, unconditionally guaranteed the Guaranteed Obligations on a senior
subordinated basis pursuant to the terms of the Indenture.

5.             Optional Redemption

Except as set forth in the following two paragraphs,
the Securities shall not be redeemable at the option of the Company prior to
August 1, 2011.  Thereafter, the
Securities shall be redeemable at the option of the Company, in whole at any
time or in part from time to time, upon on not less than 30 nor more than 60
days’ prior notice, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest and
additional interest, if any, to the redemption date (subject to the right of
the Holders of record on the relevant record date to receive interest due on
the relevant interest payment date), if redeemed during the 12-month period
commencing on August 1 of the years set forth below:

 

A-6

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2011

  	
   

  	
  105.875

  	
  %

  
	
  2012

  	
   

  	
  103.917

  	
  %

  
	
  2013

  	
   

  	
  101.958

  	
  %

  
	
  2014 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, prior to August 1, 2011, the Company may
redeem the Securities at their option, in whole at any time or in part from
time to time, upon not less than 30 nor more than 60 days’ prior notice mailed
by first-class mail to each Holder’s registered address, at a redemption price
equal to 100% of the principal amount of the Securities redeemed plus the
Applicable Premium as of, and accrued and unpaid interest and additional
interest, if any, to, the applicable redemption date (subject to the right of
the Holders of record on the relevant record date to receive interest due on
the relevant interest payment date).

Notwithstanding the foregoing, at any time and from
time to time on or prior to           
August 1, 2009, the Company may redeem in the aggregate up to 35% of the
original aggregate principal amount of the Securities (calculated after giving
effect to any issuance of Additional Securities), with the net cash proceeds of
one or more Equity Offerings (1) by the Company or (2) by any direct or
indirect parent of the Company, in each case, to the extent the net cash
proceeds thereof are contributed to the common equity capital of the Company or
used to purchase Capital Stock (other than Disqualified Stock) of the Company
from it, at a redemption price equal to 111.750% of the principal amount thereof
plus accrued and unpaid interest and additional interest, if any, to the
redemption date (subject to the right of the Holders of record on the relevant
record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of
the original aggregate principal amount of the Securities (calculated after
giving effect to any issuance of Additional Securities) must remain outstanding
after each such redemption; and provided,
further, that such redemption
shall occur within 90 days after the date on which any such Equity Offering is
consummated upon not less than 30 nor more than 60 days’ notice mailed to each
Holder of Securities being redeemed and otherwise in accordance with the
procedures set forth in the Indenture.  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 Company’s discretion, be subject to one or more
conditions precedent, including, but not limited to, completion of the related
Equity Offering.

6.             Sinking Fund

The Securities are not subject to any sinking fund.

7.             Notice of Redemption

Notice of redemption will be mailed by first-class
mail at least 30 days but not more than 60 days before the redemption date to
each Holder of Securities to be redeemed at his, her or its registered
address.  Securities in denominations
larger than $2,000 may be redeemed in part but only in whole multiples of
$1,000.  If money sufficient to pay the
redemption price of and accrued and unpaid interest on all Securities (or
portions thereof) to be redeemed on the redemption date is deposited with a
Paying Agent on or before the redemption date and certain 

 

A-7

 

other conditions are satisfied, on and after such
date, interest ceases to accrue on such Securities (or such portions thereof)
called for redemption.

8.             Repurchase of Securities at the Option of the Holders
upon Change of Control and Asset Sales

Upon the occurrence of a Change of Control, each
Holder shall have the right, subject to certain conditions specified in the
Indenture, to cause the Company to repurchase all or any part of such Holder’s
Securities at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), as provided in,
and subject to the terms of, the Indenture.

In accordance with Section 4.06 of the Indenture, the
Company will be required to offer to purchase Securities upon the occurrence of
certain events.

9.             Subordination

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

10.           Denominations; Transfer; Exchange

The Securities are in registered form, without
coupons, in denominations of $2,000 and any integral multiple of $1,000.  A Holder shall register the transfer of or
exchange of Securities in accordance with the Indenture.  Upon any registration of transfer or
exchange, the Registrar and the Trustee may require a Holder, among other things,
to furnish appropriate endorsements or transfer documents and to pay any taxes
required by law or permitted by the Indenture. 
The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or to
transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed.

11.           Persons Deemed Owners

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

12.           Unclaimed Money

If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and a Paying Agent shall pay the
money back to the Company at their written request unless an abandoned property
law designates another Person.  After any
such payment, the 

 

A-8

 

Holders entitled to the money must look to the Company
for payment as general creditors and the Trustee and a Paying Agent shall have
no further liability with respect to such monies.

13.           Discharge and Defeasance

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

14.           Amendment; Waiver

Subject to certain exceptions set forth in the
Indenture, (i) the Indenture or the Securities may be amended with the written
consent of the Holders of at least a majority in aggregate principal amount of
the outstanding Securities (voting as a single class) and (ii) any past default
or compliance with any provisions may be waived with the written consent of the
Holders of at least a majority in principal amount of the outstanding
Securities.  Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder, the
Company and the Trustee may amend the Indenture or the Securities (i) to cure
any ambiguity, omission, defect or inconsistency; (ii) to provide for the
assumption by a Successor Company of the obligations of the Company under the
Indenture and the Notes; (iii) to provide for the assumption by a Successor
Guarantor of the obligations of a Guarantor under the Indenture and its
Guarantee; (iv) to provide for uncertificated Securities in addition to or in
place of certificated Securities (provided that
the uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code); (v) to add
Guarantees with respect to the Securities; (vi) to add additional covenants of
the Company for the benefit of the Holders or to surrender rights and powers
conferred on the Company; (vii) to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the TIA;
(viii) to make any change that does not adversely affect the rights of any
Holder; or (ix) to provide for the issuance of the Exchange Securities or
Additional Securities.

15.           Defaults and Remedies

If an Event of Default occurs (other than an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company) and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the outstanding Securities, in each case, by notice to
the Company, may declare the principal of, premium, if any, and accrued but
unpaid interest on all the Securities to be due and payable.  If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company occurs, the
principal of, premium, if any, and interest on all the Securities shall become
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.  Under
certain circumstances, the Holders of a majority in principal amount of the
outstanding Securities may rescind any such acceleration with respect to the
Securities and its consequences.

If an Event of Default occurs and is continuing, the
Trustee shall be under no obligation to exercise any of the rights or powers
under the Indenture at the request or direction 

 

A-9

 

of any of the Holders unless such Holders have offered
to the Trustee reasonable indemnity or security against any loss, liability or
expense and certain other conditions are complied with.  Except to enforce the right to receive
payment of principal, premium (if any) or interest when due, no Holder may
pursue any remedy with respect to the Indenture or the Securities unless (i)
such Holder has previously given the Trustee notice that an Event of Default is
continuing, (ii) the Holders of at least 25% in principal amount of the
outstanding Securities have requested the Trustee in writing to pursue the
remedy, (iii) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense, (iv) the Trustee has not
complied with such request within 60 days after the receipt of the request and
the offer of security or indemnity and (v) the Holders of a majority in
principal amount of the outstanding Securities have not given the Trustee a
direction inconsistent with such request within such 60-day period.  Subject to certain restrictions, the Holders
of a majority in principal amount of the outstanding Securities are given the
right to 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 the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability.  Prior to taking any action under the
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.

16.           Trustee Dealings with the Company

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

17.           No Recourse Against Others

No director, officer, employee, incorporator or holder
of any equity interests in the Company or of any Guarantor or any direct or
indirect parent corporation, as such, shall have any liability for any
obligations of the Company or the Guarantors under the Securities, the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each
Holder of Securities by accepting a Security waives and releases all such
liability.

18.           Authentication

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

19.           Abbreviations

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

 

A-10

 

20.           Governing Law

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.

21.           CUSIP Numbers; ISINs

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

The Company will furnish to any Holder
of Securities upon written request and without charge to the Holder a copy of
the Indenture which has in it the text of this Security.

 

A-11

 

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to:

                                                                                                                                                                                                                

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

                                                                                                                                                                                                                

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

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

                                                                                                                                                                                                                

Date:                                                                                       Your Signature:                                                                                    

                                                                                                                                                                                                                

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

Signature Guarantee:           

	
  Date:  

  	
   

  	
   

  	
   

  
	
  Signature must be guaranteed by a
  participant in a recognized signature guaranty medallion program or other
  signature guarantor program reasonably acceptable to the Trustee

  	
   

  	
  Signature of Signature Guarantee

  

 

 

A-12

 

CERTIFICATE TO BE
DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED SECURITIES

This certificate relates to $          
principal amount of Securities held in (check applicable space)     
book-entry or        definitive form by the
undersigned.

The undersigned (check one box below):

o                                                                                                                                    has requested the Trustee by written
order to deliver in exchange for its beneficial interest in the Global Security
held by the Depository a Security or Securities in definitive, registered form
of authorized denominations and an aggregate principal amount equal to its
beneficial interest in such Global Security (or the portion thereof indicated
above);

o                                                                                                                                    has requested the Trustee by written
order to exchange or register the transfer of a Security or Securities.

In connection with any transfer of any of the
Securities evidenced by this certificate occurring prior to the expiration of
the period referred to in Rule 144(k) under the Securities Act, the undersigned
confirms that such Securities are being transferred in accordance with its
terms:

CHECK ONE BOX BELOW

	
  (1)

  	
   

  	
  o

  	
   

  	
  to the Company;
  or

  
	
  (2)

  	
   

  	
  o

  	
   

  	
  to the Registrar
  for registration in the name of the Holder, without transfer; or

  
	
  (3)

  	
   

  	
  o

  	
   

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

  
	
  (4)

  	
   

  	
  o

  	
   

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

  
	
  (5)

  	
   

  	
  o

  	
   

  	
  outside the
  United States in an offshore transaction within the meaning of Regulation S
  under the Securities Act in compliance with Rule 904 under the Securities Act
  of 1933 and such Security shall be held immediately after the transfer
  through Euroclear or Clearstream until the expiration of the Restricted
  Period (as defined in the Indenture); or

  
	
  (6)

  	
   

  	
  o

  	
   

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

  

 

 

A-13

 

 

	
  (7)

  	
   

  	
  o

  	
   

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

  

 

Unless one of the boxes is checked, the Trustee will
refuse to register any of the Securities evidenced by this certificate in the
name of any Person other than the registered Holder thereof; provided, however,
that if box (5), (6) or (7) is checked, the Company or the Trustee may require,
prior to registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company or the Trustee have
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933.

Date:                                                                                       Your Signature:                                                                                    

Signature Guarantee:           

	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature must be guaranteed by a
  participant in a recognized signature guaranty medallion program or other
  signature guarantor program reasonably acceptable to the Trustee

  	
   

  	
  Signature of Signature Guarantee

  

 

 

A-14

 

TO BE COMPLETED BY PURCHASER
IF (4) ABOVE IS CHECKED.

The undersigned represents and warrants that it is
purchasing this Security for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such account
is a “qualified institutional buyer” within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned’s foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
                  NOTICE: To be executed by an
  executive officer

  

 

A-15

 

[TO BE ATTACHED TO GLOBAL
SECURITIES]

SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY

The initial principal amount of this Global Security
is $                .  The following increases or decreases in this
Global Security have been made:

	
  Date of Exchange

  	
   

  	
  Amount of decrease in Principal Amount of this Global Security

  	
   

  	
  Amount of increase in Principal Amount of this Global Security

  	
   

  	
  Principal amount of this Global Security following such decrease or
  increase

  	
   

  	
  Signature of authorized signatory of Trustee or Securities Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

A-16

 

OPTION OF HOLDER TO ELECT
PURCHASE

If you want to elect to have this Security
purchased by the Company pursuant to Section 4.06 (Asset Sale) or 4.08 (Change
of Control) of the Indenture, check the box:

	
  Asset
  Sale o

  	
  Change
  of Control o

  
	
   

  	
   

  

If you want to elect to have only part of this
Security purchased by the Company pursuant to Section 4.06 (Asset Sale) or 4.08
(Change of Control) of the Indenture, state the amount ($2,000 or any integral
multiple of $1,000):

$

Date:                                                                                      Your Signature:                                                                                  

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

Signature Guarantee:                                                                                                                        

Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other signature guarantor
program reasonably acceptable to the Trustee

 

A-17

 

EXHIBIT B

[FORM OF FACE OF EXCHANGE
SECURITY]

[Global Securities Legend]

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

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

 

B-1

 

	
  No.

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  113⁄4% Senior Subordinated Note due 2016

  
	
   

  
	
   

  	
   

  	
  CUSIP No.

  
	
   

  	
   

  	
  ISIN No.

  

 

CHASE MERGER SUB, INC., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being
herein called the “Company”), promises to pay to Cede & Co., or registered
assigns, the principal sum [of                
Dollars] [listed on the Schedule of Increases or Decreases in Global
Security attached hereto] (2) on August 1, 2016.

(2)           Use
the Schedule of Increases and Decreases language if Security is in Global Form.

 

Interest Payment Dates:  February 1 and August 1

Record Dates: 
January 15 and July 15

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

IN WITNESS WHEREOF, the parties have caused this
instrument to be duly executed.

	
   

  	
  CHASE MERGER SUB, INC.

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Dated:

 

B-2

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

WELLS FARGO BANK,
NATIONAL ASSOCIATION,

as Trustee, certifies that this is

one of the Securities 

referred to in the Indenture.

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  
	
   

  	
   

  	
   

  

*/                                                                                                                                     If the Security is to be issued in global
form, add the Global Securities Legend and the attachment from Exhibit A
captioned “TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY”.

 

B-3

 

[FORM OF REVERSE SIDE OF
EXCHANGE SECURITY]

113⁄4% Senior Subordinated
Note due 2016

1.             Interest

CHASE MERGER SUB, INC., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the “Company”), promises to pay interest on
the principal amount of this Security at the rate per annum shown above.  The Company shall pay interest semiannually
on February 1 and August 1 of each year, commencing February 1, 2007.  Interest on the Securities shall accrue from
the most recent date to which interest has been paid or duly provided for or,
if no interest has been paid or duly provided for, from July 21, 2006 until the
principal hereof is due.  Interest shall
be computed on the basis of a 360-day year of twelve 30-day months.  The Company shall pay interest on overdue
principal at the rate borne by the Securities, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.

2.             Method of Payment

The Company shall pay interest on the Securities
(except defaulted interest) to the Persons who are registered Holders at the
close of business on the January 15 or July 15 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date (whether or not a Business Day).  Holders must surrender Securities to the
Paying Agent to collect principal payments. 
The Company shall pay principal, premium, if any, and interest in money
of the United States of America that at the time of payment is legal tender for
payment of public and private debts. 
Payments in respect of the Securities represented by a Global Security
(including principal, premium, if any, and interest) shall be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company or any successor depositary.  The Company shall make all payments in
respect of a certificated Security (including principal, premium, if any, and
interest), at the office of the Paying Agent, except that, at the option of the
Company, payment of interest may be made by mailing a check to the registered
address of each Holder thereof; provided,
however, that payments on the
Securities may also be made, in the case of a Holder of at least $1,000,000
aggregate principal amount of Securities, by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Trustee or
Paying Agent to such effect designating such account no later than 30 days
immediately preceding the relevant due date for payment (or such other date as
the Trustee may accept in its discretion).

3.             Paying Agent and Registrar

Initially, Wells Fargo Bank, National Association, a
national banking association (the “Trustee”), will act as Paying Agent and
Registrar.  The Company may appoint and
change any Paying Agent or Registrar without notice.  The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar.

 

B-4

 

4.             Indenture

The Company issued the Securities under an Indenture
dated as of July 21, 2006 (the “Indenture”), among the Company and the
Trustee.  The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb)
as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all terms and
provisions of the Indenture, and the Holders (as defined in the Indenture) are
referred to the Indenture and the TIA for a statement of such terms and
provisions.

The Securities are senior subordinated unsecured
obligations of the Company.  This
Security is one of the Exchange Securities referred to in the Indenture.  The Securities include the Initial Securities,
any Additional Securities and any Exchange Securities issued in exchange for
the Initial Securities or any Additional Securities pursuant to the Indenture.  The Initial Securities, any Additional
Securities and any Exchange Securities are treated as a single class of
securities under the Indenture.  The
Indenture imposes certain limitations on the ability of the Company and its
Restricted Subsidiaries to, among other things, make certain Investments and
other Restricted Payments, pay dividends and other distributions, incur
Indebtedness, enter into consensual restrictions upon the payment of certain
dividends and distributions by such Restricted Subsidiaries, issue or sell
shares of capital stock of the Company and such Restricted Subsidiaries, enter
into or permit certain transactions with Affiliates, create or incur Liens and
make Asset Sales.  The Indenture also
imposes limitations on the ability of the Company and each Guarantor to
consolidate or merge with or into any other Person or convey, transfer or lease
all or substantially all of its property.

To guarantee the due and punctual payment of the
principal and interest on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Guarantors have, jointly
and severally, unconditionally guaranteed the Guaranteed Obligations on a
senior subordinated basis pursuant to the terms of the Indenture.

5.             Optional Redemption

Except as set forth in the following two paragraphs,
the Securities shall not be redeemable at the option of the Company prior to
August 1, 2011.  Thereafter, the
Securities shall be redeemable at the option of the Company, in whole at any
time or in part from time to time, upon on not less than 30 nor more than 60
days’ prior notice, at the following redemption prices (expressed as a
percentage of principal amount), plus accrued and unpaid interest and
additional interest, if any, to the redemption date (subject to the right of
the Holders of record on the relevant record date to receive interest due on
the relevant interest payment date), if redeemed during the 12-month period
commencing on August 1 of the years set forth below:

 

B-5

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2011

  	
   

  	
  105.875

  	
  %

  
	
  2012

  	
   

  	
  103.917

  	
  %

  
	
  2013

  	
   

  	
  101.958

  	
  %

  
	
  2014 and thereafter

  	
   

  	
  100.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  

In addition, prior to August 1, 2011, the Company may
redeem the Securities at its option, in whole at any time or in part from time
to time, upon not less than 30 nor more than 60 days’ prior notice mailed by
first-class mail to each Holder’s registered address, at a redemption price
equal to 100% of the principal amount of the Securities redeemed plus the
Applicable Premium as of, and accrued and unpaid interest and additional
interest, if any, to, the applicable redemption date (subject to the right of the
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date).

Notwithstanding the foregoing, at any time and from
time to time on or prior to                
August 1, 2009, the Company may redeem in the aggregate up to 35% of the
original aggregate principal amount of the Securities (calculated after giving
effect to any issuance of Additional Securities), with the net cash proceeds of
one or more Equity Offerings (1) by the Company or (2) by any direct or indirect
parent of the Company, in each case, to the extent the net cash proceeds
thereof are contributed to the common equity capital of the Company or used to
purchase Capital Stock (other than Disqualified Stock) of the Company from it,
at a redemption price equal to 111.750% of the principal amount thereof plus
accrued and unpaid interest and additional interest, if any, to the redemption
date (subject to the right of the Holders of record on the relevant record date
to receive interest due on the relevant interest payment date); provided, however,
that at least 65% of the original aggregate principal amount of the Securities
(calculated after giving effect to any issuance of Additional Securities) must
remain outstanding after each such redemption; and provided, further,
that such redemption shall occur within 90 days after the date on which any
such Equity Offering is consummated upon not less than 30 nor more than 60 days’
notice mailed to each Holder of Securities being redeemed and otherwise in
accordance with the procedures set forth in the Indenture.   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 Company’s discretion, be subject to one or more
conditions precedent, including, but not limited to, completion of the related
Equity Offering.

6.             Sinking Fund

The Securities are not subject to any sinking fund.

7.             Notice of Redemption

Notice of redemption will be mailed by first-class
mail at least 30 days but not more than 60 days before the redemption date to
each Holder of Securities to be redeemed at his, her or its registered
address.  Securities in denominations
larger than $2,000 may be redeemed in part but only in whole multiples of
$1,000.  If money sufficient to pay the
redemption price of and accrued and unpaid interest on all Securities (or
portions thereof) to be redeemed on the redemption date is deposited with a
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.

 

B-6

 

8.             Repurchase of Securities at the
Option of the Holders upon Change of Control and Asset Sales

Upon the occurrence of a Change of Control, each
Holder shall have the right, subject to certain conditions specified in the
Indenture, to cause the Company to repurchase all or any part of such Holder’s
Securities at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), as provided in,
and subject to the terms of, the Indenture.

In accordance with Section 4.06 of the Indenture, the
Company will be required to offer to purchase Securities upon the occurrence of
certain events.

9.             Subordination

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

10.           Denominations; Transfer; Exchange

The Securities are in registered form, without
coupons, in denominations of $2,000 and any integral multiple of $1,000.  A Holder shall register the transfer of or
exchange of Securities in accordance with the Indenture.  Upon any registration of transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay
any taxes required by law or permitted by the Indenture.  The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be
redeemed) or to transfer or exchange any Securities for a period of 15 days
prior to a selection of Securities to be redeemed.

11.           Persons Deemed Owners

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

12.           Unclaimed Money

If money for the payment of principal or interest
remains unclaimed for two years, the Trustee and a Paying Agent shall pay the
money back to the Company at their written request unless an abandoned property
law designates another Person.  After any
such payment, the Holders entitled to the money must look to the Company for
payment as general creditors and the Trustee and a Paying Agent shall have no
further liability with respect to such monies.

 

B-7

 

13.           Discharge and Defeasance

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

14.           Amendment; Waiver

Subject to certain exceptions set forth in the
Indenture, (i) the Indenture or the Securities may be amended with the written
consent of the Holders of at least a majority in aggregate principal amount of
the outstanding Securities (voting as a single class) and (ii) any past default
or compliance with any provisions may be waived with the written consent of the
Holders of at least a majority in principal amount of the outstanding
Securities.  Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder, the
Company and the Trustee may amend the Indenture or the Securities (i) to cure
any ambiguity, omission, defect or inconsistency; (ii) to provide for the
assumption by a Successor Company of the obligations of the Company under the
Indenture and the Notes; (iii) to provide for the assumption by a Successor
Guarantor of the obligations of a Guarantor under the Indenture and its
Guarantee; (iv) to provide for uncertificated Securities in addition to or in
place of certificated Securities (provided that
the uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code); (v) to add
Guarantees with respect to the Securities; (vi) to add additional covenants of
the Company for the benefit of the Holders or to surrender rights and powers
conferred on the Company; (vii) to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the TIA;
(viii) to make any change that does not adversely affect the rights of any
Holder; or (ix) to provide for the issuance of the Exchange Securities or
Additional Securities.

15.           Defaults and Remedies

If an Event of Default occurs (other than an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company) and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the outstanding Securities, in each case, by notice to
the Company, may declare the principal of, premium, if any, and accrued but
unpaid interest on all the Securities to be due and payable.  If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company occurs, the
principal of, premium, if any, and interest on all the Securities shall become
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.  Under certain
circumstances, the Holders of a majority in principal amount of the outstanding
Securities may rescind any such acceleration with respect to the Securities and
its consequences.

If an Event of Default occurs and is continuing, the
Trustee shall be under no obligation to exercise any of the rights or powers
under the Indenture at the request or direction of any of the Holders unless
such Holders have offered to the Trustee reasonable indemnity or security
against any loss, liability or expense and certain other conditions are
complied with.  Except to enforce the
right to receive payment of principal, premium (if any) or interest when 

 

B-8

 

due, no Holder may pursue any remedy with respect to
the Indenture or the Securities unless (i) such Holder has previously given the
Trustee notice that an Event of Default is continuing, (ii) the Holders of at
least 25% in principal amount of the outstanding Securities have requested the
Trustee in writing to pursue the remedy, (iii) such Holders have offered the
Trustee reasonable security or indemnity against any loss, liability or
expense, (iv) the Trustee has not complied with such request within 60 days
after the receipt of the request and the offer of security or indemnity and (v)
the Holders of a majority in principal amount of the outstanding Securities
have not given the Trustee a direction inconsistent with such request within
such 60-day period.  Subject to certain
restrictions, the Holders of a majority in principal amount of the outstanding
Securities are given the right to 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 the Indenture or that the Trustee
determines is unduly prejudicial to the rights of any other Holder or that
would involve the Trustee in personal liability.  Prior to taking any action under the
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.

16.           Trustee Dealings with the Company

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

17.           No Recourse Against Others

No director, officer, employee, incorporator or holder
of any equity interests in the Company or of any Guarantor or any direct or
indirect parent corporation, as such, shall have any liability for any
obligations of the Company or the Guarantors under the Securities, the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each
Holder of Securities by accepting a Security waives and releases all such
liability.

18.           Authentication

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

19.           Abbreviations

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

 

B-9

 

20.           Governing Law

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.

21.           CUSIP Numbers; ISINs

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

The Company will furnish to any Holder of Securities
upon written request and without charge to the Holder a copy of the Indenture
which has in it the text of this Security.

 

B-10

 

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to:

                                                                                                                                                                                                                

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

                                                                                                                                                                                                                

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

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

                                                                                                                                                                                                                

	
  Date:

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

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

  

 

 

Signature Guarantee:

	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature must be guaranteed by a
  participant in a recognized signature guaranty medallion program or other
  signature guarantor program reasonably acceptable to the Trustee

  	
   

  	
  Signature of Signature Guarantee

  

 

 

B-11

 

OPTION OF HOLDER TO ELECT
PURCHASE

If you want to elect to have this Security
purchased by the Company pursuant to Section 4.06 (Asset Sale) or 4.08 (Change
of Control) of the Indenture, check the box:

	
  Asset
  Sale o

  	
  Change
  of Control o

  
	
   

  	
   

  

If you want to elect to have only part of this
Security purchased by the Company pursuant to Section 4.06 (Asset Sale) or 4.08
(Change of Control) of the Indenture, state the amount ($2,000 or any integral
multiple of $1,000):

$

Date:                                                                                      Your Signature:                                                                                  

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

Signature Guarantee:                                                                                                                                                                        

Signature must be guaranteed by a
participant in a recognized signature guaranty medallion program or other
signature guarantor program reasonably acceptable to the Trustee

 

B-12

 

[TO BE ATTACHED TO GLOBAL
SECURITIES]

SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY

The initial principal amount of this Global Security
is $                         .  The following increases or decreases in this
Global Security have been made:

	
  Date of Exchange

  	
   

  	
  Amount of decrease in Principal Amount of this Global Security

  	
   

  	
  Amount of increase in Principal Amount of this Global Security

  	
   

  	
  Principal amount of this Global Security following such decrease or
  increase

  	
   

  	
  Signature of authorized signatory of Trustee or Securities Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

B-13

 

EXHIBIT C

[FORM OF]

TRANSFEREE LETTER OF REPRESENTATION

RBS Global, Inc.

Rexnord
Corporation

c/o Wells Fargo Bank, National Association

•

•

Attention:  Vice President

Ladies and Gentlemen:

 

This certificate is delivered to request a transfer of
$[     ] principal amount of the 113⁄4%
Senior Subordinated Notes due 2016 (the “Securities”) of RBS GLOBAL, INC. and
REXNORD CORPORATION (together, the “Issuers”).

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

Name: 
________________________

Address: 
_____________________

Taxpayer ID Number: 
__________

The undersigned represents and warrants to you that:

1.             We
are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”)),
purchasing for our own account or for the account of such an institutional “accredited
investor” at least $100,000 principal amount of the Securities, and we are
acquiring the Securities not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act.  We have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Securities, and we invest in or purchase
securities similar to the Securities in the normal course of our business.  We, and any accounts for which we are acting,
are each able to bear the economic risk of our or its investment.

2.             We
understand that the Securities have not been registered under the Securities
Act and, unless so registered, may not be sold except as permitted in the
following sentence.  We agree on our own
behalf and on behalf of any investor account for which we are purchasing
Securities to offer, sell or otherwise transfer such Securities prior to the
date that is two years after the later of the date of original issue and the
last date on which either the Issuers or any affiliate of such Issuer was the
owner of such Securities (or any predecessor thereto) (the “Resale Restriction
Termination Date”) only (a) in the United States to a person whom we reasonably
believe is a qualified institutional buyer (as defined in rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, (b)
outside the United States in an 

 

C-1

 

offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act, (c) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
applicable) or (d) pursuant to an effective registration statement under the
Securities Act, in each of cases (a) through (d) in accordance with any
applicable securities laws of any state of the United States.  In addition, we will, and each subsequent
holder is required to, notify any purchaser of the Security evidenced hereby of
the resale restrictions set forth above. 
The foregoing restrictions on resale will not apply subsequent to the
Resale Restriction Termination Date.  If
any resale or other transfer of the Securities is proposed to be made to an
institutional “accredited investor” prior to the Resale Restriction Termination
Date, the transferor shall deliver a letter from the transferee substantially
in the form of this letter to the Issuers and the Trustee, which shall provide,
among other things, that the transferee is an institutional “accredited
investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act and that it is acquiring such Securities for investment purposes
and not for distribution in violation of the Securities Act.  Each purchaser acknowledges that the Issuers
and the Trustee reserve the right prior to the offer, sale or other transfer
prior to the Resale Restriction Termination Date of the Securities pursuant to
clause 1(b), 1(c) or 1(d) above to require the delivery of an opinion of
counsel, certifications or other information satisfactory to the Issuers and
the Trustee.

Dated: 
____________________

TRANSFEREE:  ____________________,

By:                                                                                                          

 

 

C-2

 

EXHIBIT D

[FORM OF SUPPLEMENTAL
INDENTURE]

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”)
dated as of 
[               ],
among [GUARANTOR] (the “New Guarantor”), a subsidiary of RBS GLOBAL, INC. (or
its successor), a Delaware corporation (the “Company”), REXNORD CORPORATION, a
Delaware corporation (“Rexnord” and, together with the Company, the “Issuers”)
and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
trustee under the indenture referred to below (the “Trustee”).

W I T N E S S E T H :

WHEREAS the Issuers and the existing Guarantors have
heretofore executed and delivered to the Trustee an indenture (as amended,
supplemented or otherwise modified, the “Indenture”) dated as of July 21, 2006,
providing for the issuance of the Issuers’ 113⁄4% Senior Subordinated Notes due
2016 (the “Securities”), initially in the aggregate principal amount of
$300,000,000;

WHEREAS Section 4.11 of the Indenture provides that
under certain circumstances the Issuers are required to cause the New Guarantor
to execute and deliver to the Trustee a supplemental indenture pursuant to
which the New Guarantor shall unconditionally guarantee all the Issuers’
Obligations under the Securities and the Indenture pursuant to a Guarantee on
the terms and conditions set forth herein; and

WHEREAS pursuant to Section 9.01 of the Indenture, the
Trustee, the Issuers and the existing Guarantors are 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 New Guarantor, the Issuers and the Trustee mutually covenant
and agree for the equal and ratable benefit of the holders of the Securities as
follows:

1.             Defined Terms.  As used in this Supplemental Indenture, terms
defined in the Indenture or in the preamble or recital hereto are used herein
as therein defined, except that the term “Holders” in this Guarantee shall
refer to the term “Holders” as defined in the Indenture and the Trustee acting
on behalf of and for the benefit of such Holders.  The words “herein,” “hereof” and “hereby” and
other words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.

2.             Agreement to Guarantee.  The New Guarantor hereby agrees, jointly and
severally with all existing Guarantors (if any), to unconditionally guarantee
the Issuers’ Obligations under the Securities and the Indenture on the terms
and subject to the conditions set forth in Articles 11 and 12 of the Indenture
and to be bound by all other applicable provisions of the Indenture and the
Securities and to perform all of the obligations and agreements of a Guarantor
under the Indenture.

 

3.             Notices.  All notices or other communications to the
New Guarantor shall be given as provided in Section 13.02 of the Indenture.

4.             Ratification of Indenture;
Supplemental Indentures Part of Indenture. 
Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. 
This Supplemental Indenture shall form a part of the Indenture for all
purposes, and every holder of Securities heretofore or hereafter authenticated
and delivered shall be bound hereby.

5.             Governing Law.  THIS SUPPLEMENTAL
INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

6.             Trustee Makes No Representation.  The Trustee makes no representation as to the
validity or sufficiency of this Supplemental Indenture.

7.             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.

8.             Effect of Headings.  The Section headings herein are for
convenience only and shall not effect the construction thereof.

 

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

	
   

  	
  [NEW GUARANTOR]

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  RBS GLOBAL, INC.

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  REXNORD CORPORATION

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:Exhibit
4.7

 

FIRST SUPPLEMENTAL
INDENTURE (this “First Supplemental Indenture”), dated
as of July 21, 2006, by and among RBS Global, Inc., a Delaware corporation
(the “Company”), Rexnord Corporation, a Delaware corporation (together
with RBS Global, the “Issuers”), The Falk Service Corporation, a
Delaware corporation (“Falk”), Prager Incorporated, a Louisiana
corporation (“Prager”), PT Components, Inc., a Delaware corporation (“PT”),
RBS Acquisition Corporation, a Delaware corporation (“RBS Acquisition”),
RBS China Holdings, L.L.C., a Delaware limited liability company (“RBS China”),
Rexnord Industries, LLC, a Delaware limited liability company (“Rexnord
Industries”), Rexnord International Inc., a Delaware corporation (“Rexnord
International”), Rexnord Puerto Rico Inc., a Nevada corporation (“Rexnord
Puerto Rico”), W.M. Berg Inc., a Delaware corporation (collectively with
Falk, Prager, PT, RBS Acquisition, RBS China, Rexnord Industries, Rexnord
International and Rexnord Puerto Rico, the “Guarantors”), Chase Merger
Sub, Inc., a Delaware corporation (“Chase Merger Sub”), and Wells Fargo Bank, National Association, as Trustee (the “Trustee”).

WITNESSETH:

WHEREAS, Chase Merger
Sub has heretofore executed and delivered to the Trustee an Indenture (the “Indenture”),
dated as of July 21, 2006, providing for the issuance of 113⁄4% Senior
Subordinated Notes due 2016 (the “Notes”);

WHEREAS, the Issuers
desire to execute and deliver this First Supplemental Indenture to the Trustee
for the purpose of becoming jointly and severally liable, as co-issuers of the
Notes, for all of Chase Merger Sub’s obligations under the Indenture and the
Notes;

WHEREAS the Guarantors
desire to execute and deliver this First Supplemental Indenture to the Trustee
for the purpose of guaranteeing the payment of all
obligations of the Issuers under the Indenture and the Notes and the
performance within applicable grace periods of all other obligations of the
Issuers under the Indenture and the Notes, on the terms and conditions set forth in Article 11 of the Indenture; and

WHEREAS, pursuant to
Section 9.01 of the Indenture, the Trustee and Chase Merger Sub are
authorized to execute and deliver this First Supplemental Indenture.

NOW
THEREFORE, in consideration of the foregoing and for good and
valuable consideration, the receipt of which is hereby acknowledged, the
Issuers, the Guarantors, Chase Merger Sub and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:

SECTION 1. Capitalized
Terms. Capitalized terms used herein but not defined shall have the
meanings assigned to them in the Indenture.

SECTION 2. Co-Issuers.
The Issuers hereby agree that they are henceforth jointly and severally liable,
as co-issuers of the Notes, for all of Chase Merger Sub’s obligations under the
Indenture and the Notes, on the terms and conditions set forth therein.

 

1

 

SECTION
3. Guarantees. Each of the Guarantors hereby agrees, jointly and
severally with all other Guarantors, to guarantee the Issuers’ obligations
under the Notes on the terms and subject to the conditions set forth in Article 11
of the Indenture and to be bound by all applicable provisions of the Indenture.

SECTION 4. Ratification
of Indenture; Supplemental Indenture Part of Indenture. Except as expressly
amended hereby, the Indenture is in all respects ratified and confirmed and all
the terms, conditions and provisions thereof shall remain in full force and
effect. This First Supplemental Indenture shall form a part of the Indenture
for all purposes, and every holder of Notes heretofore or hereafter
authenticated and delivered shall be bound hereby.

SECTION 5. Governing Law.
THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

SECTION 6. The Trustee.
The Trustee shall not be responsible in any manner whatsoever for or in respect
of the validity or sufficiency of this First Supplemental Indenture or for or
in respect of the recitals contained herein, all of which are made solely by the
Issuers, Chase Merger Sub and the Guarantors. 
Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed by the Trustee by reason of this First Supplemental Indenture.  This First Supplemental Indenture is executed
and accepted by the Trustee subject to all the terms and conditions set forth
in the Indenture with the same force and effect as if those terms and
conditions were repeated at length herein and made applicable to the Trustee
with respect hereto.  In entering into
this First Supplemental Indenture, the Trustee shall be entitled to the benefit
of every provision of the Indenture relating to the conduct or affecting the
liability or affording protection to the Trustee, whether or not elsewhere
herein so provided.

SECTION 7. Counterparts.
The parties may sign any number of copies of this First Supplemental Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.

SECTION 8. Effect of
Headings. The Section headings herein are for convenience only and shall
not effect the construction of this First Supplemental Indenture.

[The rest of this page has been intentionally left
blank.]

 

2

 

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

 

	
   

  	
  ISSUERS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RBS
  GLOBAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert A. Hitt

  	
   

  
	
   

  	
   

  	
  Name:
  Robert A. Hitt

  
	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  REXNORD
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas Jansen

  	
   

  
	
   

  	
   

  	
  Name:
  Thomas Jansen

  
	
   

  	
   

  	
  Title:
  Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  CHASE
  MERGER SUB, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patricia M. Navis

  	
   

  
	
   

  	
   

  	
  Name:
  Patricia M. Navis

  
	
   

  	
   

  	
  Title:
  Vice President and Secretary

  
					

 

 

S-1

 

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

	
   

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
  THE
  FALK SERVICE CORPORATION

  
	
   

  	
   

  
	
   

  	
  PRAGER
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
  PT
  COMPONENTS, INC.

  
	
   

  	
   

  
	
   

  	
  RBS
  ACQUISITION CORPORATION

  
	
   

  	
   

  
	
   

  	
  RBS
  CHINA HOLDINGS, L.L.C.

  
	
   

  	
   

  
	
   

  	
  REXNORD
  INDUSTRIES, LLC

  
	
   

  	
   

  
	
   

  	
  REXNORD
  INTERNATIONAL INC.

  
	
   

  	
   

  
	
   

  	
  REXNORD
  PUERTO RICO INC.

  
	
   

  	
   

  
	
   

  	
  W.M.
  BERG INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Andrzejewski

  	
   

  
	
   

  	
   

  	
  Name:
  Michael Andrzejewski

  
	
   

  	
   

  	
  Title:
  Secretary

  

 

 

S-2

 

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

 

	
   

  	
  TRUSTEE

  
	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, NATIONAL 

  ASSOCIATION, as trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy P. Mowdy

  	
   

  
	
   

  	
   

  	
  Name:
  Timothy P. Mowdy

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

S-3

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