Document:

exv4w1

 

Exhibit 4.1

EXECUTION COPY

Encore Medical IHC, Inc.

9.75% SENIOR SUBORDINATED NOTES DUE 2012

Indenture

Dated as of October 4, 2004

Wells Fargo Bank, N.A.

Trustee

 

 

CROSS-REFERENCE TABLE*

	 	 	 	 	 
	Trust Indenture	 	 
	Act Section
	 	Indenture Section

	310(a)(1)
	 	 	7.10	 
	(a)(2)
	 	 	7.10	 
	(a)(3)
	 	 	N.A.	 
	(a)(4)
	 	 	N.A.	 
	(a)(5)
	 	 	7.10	 
	(b)
	 	 	7.10	 
	(c)
	 	 	N.A.	 
	311(a)
	 	 	7.11	 
	(b)
	 	 	7.11	 
	(c)
	 	 	N.A.	 
	312(a)
	 	 	2.06	 
	(b)
	 	 	13.03	 
	(c)
	 	 	13.03	 
	313(a)
	 	 	7.06	 
	(b)(1)
	 	 	N.A.	 
	(b)(2)
	 	 	7.06, 7.07	 
	(c)
	 	 	7.06, 13.02	 
	(d)
	 	 	7.06	 
	314(a)
	 	 	13.05	 
	(b)
	 	 	N.A.	 
	(c)(1)
	 	 	N.A.	 
	(c)(2)
	 	 	N.A.	 
	(c)(3)
	 	 	N.A.	 
	(d)
	 	 	N.A.	 
	(e)
	 	 	13.05	 
	(f)
	 	 	N.A.	 
	315(a)
	 	 	N.A.	 
	(b)
	 	 	N.A.	 
	(c)
	 	 	N.A.	 
	(d)
	 	 	N.A.	 
	(e)
	 	 	N.A.	 
	316(a) (last sentence)
	 	 	N.A.	 
	(a)(1)(A)
	 	 	N.A.	 
	(a)(1)(B)
	 	 	6.04	 
	(a)(2)
	 	 	N.A.	 
	(b)
	 	 	N.A.	 

	*	 	N.A. means not applicable.
 

This Cross-Reference Table is not part of this Indenture

 

 

	 	 	 	 	 
	Trust Indenture	 	 
	Act Section
	 	Indenture Section

	(c)
	 	 	13.14	 
	317(a)(1)
	 	 	N.A.	 
	(a)(2)
	 	 	N.A.	 
	(b)
	 	 	N.A.	 
	318(a)
	 	 	N.A.	 
	(b)
	 	 	N.A.	 
	(c)
	 	 	13.01	 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page

	ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
	 	 	 	 
	Section 1.01. Definitions
	 	 	1	 
	Section 1.02. Other Definitions
	 	 	25	 
	Section 1.03. Incorporation by Reference of Trust Indenture Act
	 	 	25	 
	Section 1.04. Rules of Construction
	 	 	26	 
	ARTICLE TWO
THE NOTES
	 	 	 	 
	Section 2.01. Form and Dating
	 	 	26	 
	Section 2.02. Execution and Authentication
	 	 	27	 
	Section 2.03. Methods of Receiving Payments on the Notes
	 	 	28	 
	Section 2.04. Registrar and Paying Agent
	 	 	28	 
	Section 2.05. Paying Agent to Hold Money in Trust
	 	 	29	 
	Section 2.06. Holder Lists
	 	 	29	 
	Section 2.07. Transfer and Exchange
	 	 	29	 
	Section 2.08. Replacement Notes
	 	 	42	 
	Section 2.09. Outstanding Notes
	 	 	42	 
	Section 2.10. Treasury Notes
	 	 	42	 
	Section 2.11. Temporary Notes
	 	 	43	 
	Section 2.12. Cancellation
	 	 	43	 
	Section 2.13. Defaulted Interest
	 	 	43	 
	Section 2.14. CUSIP Numbers
	 	 	43	 
	ARTICLE THREE
REDEMPTION AND OFFERS TO
PURCHASE
	 	 	 	 
	Section 3.01. Notices to Trustee
	 	 	44	 
	Section 3.02. Selection of Notes to Be Redeemed
	 	 	44	 
	Section 3.03. Notice of Redemption
	 	 	44	 
	Section 3.04. Effect of Notice of Redemption
	 	 	45	 
	Section 3.05. Deposit of Redemption Price
	 	 	45	 
	Section 3.06. Notes Redeemed in Part
	 	 	46	 
	Section 3.07. Optional Redemption
	 	 	46	 
	Section 3.08. Repurchase Offers
	 	 	47	 
	Section 3.09. No Sinking Fund
	 	 	48	 

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	 	 	Page

	ARTICLE FOUR
COVENANTS
	 	 	 	 
	Section 4.01. Payment of Notes
	 	 	48	 
	Section 4.02. Maintenance of Office or Agency
	 	 	49	 
	Section 4.03. Reports
	 	 	49	 
	Section 4.04. Compliance Certificate
	 	 	50	 
	Section 4.05. Taxes
	 	 	51	 
	Section 4.06. Stay, Extension and Usury Laws
	 	 	51	 
	Section 4.07. Restricted Payments
	 	 	51	 
	Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
	 	 	55	 
	Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock
	 	 	57	 
	Section 4.10. Asset Sales
	 	 	59	 
	Section 4.11. Transactions with Affiliates
	 	 	60	 
	Section 4.12. Liens
	 	 	62	 
	Section 4.13. Business Activities
	 	 	62	 
	Section 4.14. Offer to Repurchase upon a Change of Control
	 	 	62	 
	Section 4.15. Limitation on Senior Subordinated Debt
	 	 	63	 
	Section 4.16. Designation of Restricted and Unrestricted Subsidiaries
	 	 	63	 
	Section 4.17. Payments for Consent
	 	 	65	 
	Section 4.18. Guarantees
	 	 	65	 
	Section 4.19. Limitation on Issuances and Sales of Equity Interests in Restricted Subsidiaries
	 	 	66	 
	ARTICLE FIVE
SUCCESSORS
	 	 	 	 
	Section 5.01. Merger, Consolidation or Sale of Assets
	 	 	66	 
	Section 5.02. Successor Corporation Substituted
	 	 	67	 
	ARTICLE SIX
DEFAULTS AND REMEDIES
	 	 	 	 
	Section 6.01. Events of Default
	 	 	68	 
	Section 6.02. Acceleration
	 	 	69	 
	Section 6.03. Other Remedies
	 	 	70	 
	Section 6.04. Waiver of Past Defaults
	 	 	70	 
	Section 6.05. Control by Majority
	 	 	71	 
	Section 6.06. Limitation on Suits
	 	 	71	 
	Section 6.07. Rights of Holders of Notes to Receive Payment
	 	 	71	 
	Section 6.08. Collection Suit by Trustee
	 	 	71	 
	Section 6.09. Trustee May File Proofs of Claim
	 	 	72	 
	Section 6.10. Priorities
	 	 	72	 
	Section 6.11. Undertaking for Costs
	 	 	73	 

ii

 

	 	 	 	 	 
	 	 	Page

	ARTICLE SEVEN
TRUSTEE
	 	 	 	 
	Section 7.01. Duties of Trustee
	 	 	73	 
	Section 7.02. Certain Rights of Trustee
	 	 	74	 
	Section 7.03. Individual Rights of Trustee
	 	 	75	 
	Section 7.04. Trustee’s Disclaimer
	 	 	75	 
	Section 7.05. Notice of Defaults
	 	 	75	 
	Section 7.06. Reports by Trustee to Holders of the Notes
	 	 	75	 
	Section 7.07. Compensation and Indemnity
	 	 	76	 
	Section 7.08. Replacement of Trustee
	 	 	77	 
	Section 7.09. Successor Trustee by Merger, Etc.
	 	 	78	 
	Section 7.10. Eligibility; Disqualification
	 	 	78	 
	Section 7.11. Preferential Collection of Claims Against Company
	 	 	78	 
	ARTICLE EIGHT
DEFEASANCE AND COVENANT DEFEASANCE
	 	 	 	 
	Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance
	 	 	78	 
	Section 8.02. Legal Defeasance and Discharge
	 	 	78	 
	Section 8.03. Covenant Defeasance
	 	 	79	 
	Section 8.04. Conditions to Legal or Covenant Defeasance
	 	 	79	 
	Section 8.05. Deposited Money and Government Securities to Be Held in Trust;
Other Miscellaneous Provisions
	 	 	81	 
	Section 8.06. Repayment to the Company
	 	 	81	 
	Section 8.07. Reinstatement
	 	 	82	 
	ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
	 	 	 	 
	Section 9.01. Without Consent of Holders of Notes
	 	 	82	 
	Section 9.02. With Consent of Holders of Notes
	 	 	83	 
	Section 9.03. Compliance with Trust Indenture Act
	 	 	85	 
	Section 9.04. Revocation and Effect of Consents
	 	 	85	 
	Section 9.05. Notation on or Exchange of Notes
	 	 	85	 
	Section 9.06. Trustee to Sign Amendments, Etc.
	 	 	85	 
	ARTICLE TEN
NOTE GUARANTEES
	 	 	 	 
	Section 10.01. Guarantee
	 	 	86	 
	Section 10.02. Limitation on Guarantor Liability
	 	 	87	 
	Section 10.03. Execution and Delivery of Note Guarantee
	 	 	87	 
	Section 10.04. Guarantors May Consolidate, Etc., on Certain Terms
	 	 	88	 
	Section 10.05. Release of Guarantor
	 	 	89	 
	Section 10.06. Subordination of Note Guarantee
	 	 	89	 

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	 	 	Page

	ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
	 	 	 	 
	Section 11.01. Satisfaction and Discharge
	 	 	89	 
	Section 11.02. Deposited Money and Government Securities to Be Held in Trust; Other
Miscellaneous Provisions
	 	 	91	 
	Section 11.03. Repayment to the Company
	 	 	91	 
	Section 11.04. Survival
	 	 	91	 
	Section 11.05. Reinstatement
	 	 	92	 
	ARTICLE TWELVE
SUBORDINATION
	 	 	 	 
	Section 12.01. Agreement to Subordinate
	 	 	92	 
	Section 12.02. Liquidation; Dissolution; Bankruptcy
	 	 	92	 
	Section 12.03. Default on Designated Senior Debt
	 	 	92	 
	Section 12.04. Acceleration of Securities
	 	 	93	 
	Section 12.05. When Distribution Must Be Paid Over
	 	 	94	 
	Section 12.06. Notice by the Company
	 	 	94	 
	Section 12.07. Subrogation
	 	 	94	 
	Section 12.08. Relative Rights
	 	 	94	 
	Section 12.09. Subordination May Not Be Impaired by the Company
	 	 	95	 
	Section 12.10. Distribution or Notice to Representative
	 	 	95	 
	Section 12.11. Rights of Trustee and Paying Agent
	 	 	95	 
	Section 12.12. Authorization to Effect Subordination
	 	 	96	 
	ARTICLE THIRTEEN
MISCELLANEOUS
	 	 	 	 
	Section 13.01. Trust Indenture Act Controls
	 	 	96	 
	Section 13.02. Notices
	 	 	96	 
	Section 13.03. Communication by Holders of Notes with Other Holders of Notes
	 	 	97	 
	Section 13.04. Certificate and Opinion as to Conditions Precedent
	 	 	98	 
	Section 13.05. Statements Required in Certificate or Opinion
	 	 	98	 
	Section 13.06. Rules by Trustee and Agents
	 	 	98	 
	Section 13.07. No Personal Liability of Directors, Officers, Employees and Stockholders
	 	 	98	 
	Section 13.08. Governing Law
	 	 	99	 
	Section 13.09. Consent to Jurisdiction
	 	 	99	 
	Section 13.10. No Adverse Interpretation of Other Agreements
	 	 	99	 
	Section 13.11. Successors
	 	 	99	 
	Section 13.12. Severability
	 	 	99	 
	Section 13.13. Counterpart Originals
	 	 	99	 
	Section 13.14. Acts of Holders
	 	 	100	 
	Section 13.15. Benefit of Indenture
	 	 	101	 
	Section 13.16. Table of Contents, Headings, Etc.
	 	 	101	 

iv

 

EXHIBITS

	 	 	 
	Exhibit A

	 	FORM OF 144A GLOBAL NOTE
	 
	Exhibit B

	 	FORM OF CERTIFICATE OF TRANSFER
	 
	Exhibit C

	 	FORM OF CERTIFICATE OF EXCHANGE
	 
	Exhibit D

	 	FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED

INVESTOR
	 
	Exhibit E

	 	FORM OF NOTATION OF GUARANTEE
	 
	Exhibit F

	 	FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT

GUARANTORS

v

 

          INDENTURE dated as of October 4, 2004 among Encore Medical IHC, Inc., a
Delaware corporation, the Guarantors (as defined below) listed on the signature
pages hereto and Wells Fargo Bank, N.A., a nationally chartered banking
association, as trustee.

          The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its 9.75% Senior
Subordinated Notes due 2012 to be issued in one or more series as provided in
this Indenture. The initial Guarantors have duly authorized the execution and
delivery of this Indenture to provide for a guarantee of the Notes and of
certain of the Company’s obligations hereunder. All things necessary to make
this Indenture a valid agreement of the Company and the initial Guarantors, in
accordance with its terms, have been done.

          The Company (as defined below), the Guarantors and the Trustee (as defined
below) agree as follows for the benefit of each other and for the equal and
ratable benefit of the Holders (as defined below) of the Company’s 9.75% Senior
Subordinated Notes due 2012:

ARTICLE ONE

DEFINITIONS AND INCORPORATION

BY REFERENCE

Section 1.01. Definitions.

          “144A Global Note” means a global note substantially in the form of
Exhibit A-1 bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary
or its nominee, that shall be issued in a denomination equal to the outstanding
principal amount at maturity of the Notes sold in reliance on Rule 144A.

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

	(1)	 	Indebtedness of any other Person existing at the time such
other Person is merged with or into, or becomes a Subsidiary of,
such specified Person, whether or not such Indebtedness is incurred
in connection with, or in contemplation of, such other Person
merging with or into, or becoming a Subsidiary of, such specified
Person; and
	 
	(2)	 	Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.

          “Additional Notes” means an unlimited maximum aggregate principal amount
of Notes (other than the Notes issued on the date hereof) issued under this
Indenture in accordance with Sections 2.02 and 4.09.

          “Affiliate” of any specified Person means (1) any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (2) any executive officer or director of
such specified Person. For purposes of this definition, “control,” as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies

1

 

of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of
the Voting Stock of a Person shall be deemed to be control. For purposes of
this definition, the terms “controlling,” “controlled by” and “under common
control with” shall have correlative meanings.

          “Agent” means any Registrar or Paying Agent.

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

          “Asset Sale” means:

	(1)	 	the sale, lease, conveyance or other disposition of any
property or assets; provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole will be
governed by Section 4.14 and/or Section 5.01 and not by Section
4.10; and
	 
	(2)	 	the issuance of Equity Interests by any of the Company’s
Restricted Subsidiaries or the sale by the Company or any Restricted
Subsidiary thereof of Equity Interests in any of its Subsidiaries
(other than directors’ qualifying shares and shares issued to
foreign nationals to the extent required by applicable law).

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

	(1)	 	any single transaction or series of related transactions that
involves assets having a Fair Market Value of less than the greater
of (a) $2.0 million and (b) 1.0% of Consolidated Cash Flow for the
most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding such
transaction or series of related transactions;
	 
	(2)	 	a transfer, lease, license or other disposition of assets
between or among the Company and its Restricted Subsidiaries;
	 
	(3)	 	an issuance of Equity Interests by a Restricted Subsidiary of
the Company to the Company or to another Restricted Subsidiary;
	 
	(4)	 	the sale, lease, license or other disposition of equipment,
inventory, accounts receivable, intellectual property or other
assets in the ordinary course of business;
	 
	(5)	 	the sale or other disposition of Cash Equivalents;
	 
	(6)	 	dispositions of receivables in connection with the
compromise, settlement or collection thereof in the ordinary course
of business or in bankruptcy or similar proceedings and exclusive of
factoring or similar arrangements;
	 
	(7)	 	the substantially contemporaneous sale and leaseback of an
asset acquired after the Issue Date; provided that such sale and
leaseback occurs within 180 days after

2

 

	 	 	the date of the acquisition of such asset by the Company and its
Restricted Subsidiaries;
	 
	(8)	 	a Restricted Payment that is permitted by Section 4.07; and
	 
	(9)	 	any sale or disposition of any property or equipment that has
become damaged, worn out, obsolete or otherwise unsuitable for use
in connection with the business of the Company or its Restricted
Subsidiaries.

          “Attributable Debt” in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction, including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.

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

          “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular “person” (as that term is used in Section 13(d)(3)
of the Exchange Act), such “person” shall be deemed to have beneficial
ownership of all securities that such “person” has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms “Beneficially Owns” and “Beneficially Owned” shall have a
corresponding meaning.

          “Board of Directors” means:

	(1)	 	with respect to a corporation, the board of directors of the
corporation;
	 
	(2)	 	with respect to a partnership, the board of directors of the
general partner of the partnership; and
	 
	(3)	 	with respect to any other Person, the board or committee of
such Person serving a similar function.

          “Board Resolution” means a copy of a resolution certified by the Secretary
of the Company to have been duly adopted by the Board of Directors of the
Company and to be in full force and effect on the date of such certification.

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

          “Business Day” means any day other than a Legal Holiday.

          “Calculation Date” has the meaning set forth below in the definition of
Fixed Charge Coverage Ratio.

3

 

          “Capital 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 that time be required to be capitalized on a balance sheet in
accordance with GAAP.

          “Capital Stock” means:

	(1)	 	in the case of a corporation, corporate stock;
	 
	(2)	 	in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
	 
	(3)	 	in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited);
and
	 
	(4)	 	any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
	 
	 	 	“Cash Equivalents” means:
	 
	(1)	 	United States dollars;
	 
	(2)	 	securities issued or directly and fully guaranteed or insured
by the United States government or any agency or instrumentality
thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more
than six months from the date of acquisition;
	 
	(3)	 	certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition,
bankers’ acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with any domestic commercial
bank having capital and surplus in excess of $500.0 million and a
Thomson Bank Watch Rating of “B” or better;
	 
	(4)	 	repurchase obligations with a term of not more than seven
days 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 having the highest rating obtainable from
Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services
and in each case maturing within six months after the date of
acquisition;
	 
	(6)	 	securities issued and fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, rated at least
“A” by Moody’s Investors Service, Inc. or Standard & Poor’s Rating
Services and having maturities of not more than six months from the
date of acquisition;

4

 

	(7)	 	money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1)
through (6) of this definition; and
	 
	(8)	 	in the case of any Foreign Subsidiary:

	(a)	 	local currency held by such Foreign Subsidiary
from time to time in the ordinary course of business;
	 
	(b)	 	securities issued or directly and fully
guaranteed by the sovereign nation or any agency thereof
(provided that the full faith and credit of such sovereign
nation is pledged in support thereof) in which such Foreign
Subsidiary is organized and is conducting business having
maturities of not more than one year from the date of
acquisition; and
	 
	(c)	 	investments of the type and maturity described in
clauses (3) through (5) above of foreign obligors, which
investments or obligors satisfy the requirements and have
ratings described in such clauses;

	 	 	provided that the aggregate amount of any obligations and
investments that are at any time outstanding pursuant to subclauses
(b) and (c) of this clause (8) may not exceed the U.S. dollar
equivalent of $10.0 million.
	 
	 	 	“Change of Control” means the occurrence of any of the following:
	 
	(1)	 	the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one
or a series of related transactions, of all or substantially all of
the properties or assets of the Parent (or any other direct or
indirect parent company of the Company) and its Subsidiaries or the
Company and its Restricted Subsidiaries, taken as a whole, to any
“person” (as that term is used in Section 13(d)(3) of the Exchange
Act) other than a Restricted Subsidiary of the Company;
	 
	(2)	 	the adoption of a plan relating to the liquidation or
dissolution of the Company;
	 
	(3)	 	any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), becomes the ultimate
Beneficial Owner, directly or indirectly, of 50% or more of the
voting power of the Voting Stock of the Parent (or any other direct
or indirect parent company of the Company) or the Company;
	 
	(4)	 	the Parent ceases to beneficially own all of the Equity
Interests of the Company;
	 
	(5)	 	the first day on which a majority of the members of the Board
of Directors of the Company or the Parent are not Continuing
Directors; or
	 
	(6)	 	the Parent (or any other direct or indirect parent company of
the Company) or the Company consolidates with, or merges with or
into, any Person, or any Person consolidates with, or merges with or
into the Parent (or any other direct or indirect

5

 

	 	 	parent company of the Company) or the Company, in any such event
pursuant to a transaction in which any of the outstanding Voting
Stock of the Parent (or any other direct or indirect parent company
of the Company), the Company or such other Person is converted into
or exchanged for cash, securities or other property, other than any
such transaction where (A) the Voting Stock of the Parent (or any
other direct or indirect parent company of the Company) or the
Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting
Stock of such surviving or transferee Person (immediately after
giving effect to such issuance) and (B) immediately after such
transaction, no “person” or “group” (as such terms are used in
Section 13(d) and 14(d) of the Exchange Act), becomes, directly or
indirectly, the ultimate Beneficial Owner of 50% or more of the
voting power of the Voting Stock of the surviving or transferee
Person;
	 
	 	 	“Clearstream” means Clearstream Banking S.A. and any successor thereto.

          “Company” means Encore Medical IHC, Inc., a Delaware corporation, until a
successor replaces it pursuant to Section 5.01 and thereafter means the
successor.

          “Consolidated Cash Flow” means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus:

	(1)	 	provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent that
such provision for taxes was deducted in computing such Consolidated
Net Income; plus
	 
	(2)	 	Fixed Charges of such Person and its Restricted Subsidiaries
for such period, to the extent that any such Fixed Charges were
deducted in computing such Consolidated Net Income; plus
	 
	(3)	 	depreciation, amortization (including amortization or of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a
prior period, but including non-cash expenses relating to the
issuance of stock options) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing
such Consolidated Net Income; minus
	 
	(4)	 	non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue consistent with past
practice;

in each case, on a consolidated basis and determined in accordance with GAAP.

          Notwithstanding the preceding, the provision for taxes based on the income
or profits of, the Fixed Charges of and the depreciation and amortization and
other non-cash

6

 

expenses of a Restricted Subsidiary of the Company shall be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company (A) in
the same proportion that the Net Income of such Restricted Subsidiary was added
to compute such Consolidated Net Income of the Company and (B) only to the
extent that a corresponding amount would be permitted at the date of
determination to be dividended or distributed to the Company by such Restricted
Subsidiary without prior governmental approval (that has not been obtained),
and without direct or indirect restriction pursuant to the terms of its charter
and all agreements, instruments, judgments, decrees, orders, statutes, rules
and governmental regulations applicable to that Subsidiary or its stockholders.

          “Consolidated Net Income” means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that:

	(1)	 	the Net Income (or loss) of any Person that is not a
Restricted 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 paid in cash to the specified Person or a
Restricted Subsidiary thereof;
	 
	(2)	 	the Net Income of any Restricted Subsidiary shall be excluded
to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any
prior governmental approval (that has not been obtained) or,
directly or indirectly, by 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 equityholders;
	 
	(3)	 	the Net Income of any Person acquired during the specified
period for any period prior to the date of such acquisition shall be
excluded;
	 
	(4)	 	the cumulative effect of a change in accounting principles
shall be excluded; and
	 
	(5)	 	notwithstanding clause (1) above, the Net Income (but not
loss) of any Unrestricted Subsidiary shall be excluded, whether or
not distributed to the specified Person or one of its Subsidiaries.

          “Continuing Directors” means, as of any date of determination, any member
of the Board of Directors of the Parent or the Company, as the case may be,
who:

	(1)	 	was a member of such Board of Directors on the Issue Date; or
	 
	(2)	 	was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of
such nomination or election.

          “Corporate Trust Office of the Trustee” shall be at the address of the
Trustee specified in Section 13.02 or such other address as to which the
Trustee may give notice to the Company.

7

 

          “Credit Agreement” means that certain Credit Agreement to be dated as of
the Issue Date by and among the Company, the Parent, the subsidiary guarantors
from time to time party thereto, Bank of America, N.A., as Administrative
Agent, and the other lenders named therein providing for up to $150.0 million
in term loan borrowings and $30.0 million of revolving credit borrowings,
including any related notes, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
supplemented, renewed, refunded, replaced, restated, refinanced or otherwise
modified from time to time, including any agreement extending the maturity of,
refinancing, replacing or otherwise restructuring (including increasing the
amount of available borrowings thereunder or adding Subsidiaries of the Company
as additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness, regardless of whether such amendment, supplement, renewal,
refunding, replacement, restatement, refinancing or modification is with the
same financial institutions or otherwise or pursuant to the original credit
agreement or another credit agreement.

          “Credit Facilities” means one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks, or other institutional lenders providing for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow
from such lenders against such receivables), or letters of credit, in each
case, as amended, supplemented, renewed, refunded, replaced, restated,
refinanced or modified in whole or in part from time to time.

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

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

          “Definitive Note” means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.07, substantially in the
form of Exhibit A, except that such Note shall not bear the Global Note Legend
and shall not have the “Schedule of Exchanges of Interests in the Global Note”
attached thereto.

          “Depositary” means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.04(b) as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

          “Designated Senior Debt” means:

	(1)	 	any Indebtedness outstanding under the Credit Agreement; and
	 
	(2)	 	any other Senior Debt permitted under this Indenture the
principal amount of which is $20.0 million or more and that has been
designated by the Company as “Designated Senior Debt.”

          “Disqualified Stock” means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the

8

 

option of the holder thereof), or upon the happening of any event, matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder thereof, in whole or in
part, on or prior to the date that is 91 days after the date on which the Notes
mature. Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of
a change of control or an asset sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such
repurchase or redemption complies with Section 4.07. The term “Disqualified
Stock” shall also include any options, warrants or other rights that are
convertible into Disqualified Stock or that are redeemable at the option of the
holder, or required to be redeemed, prior to the date that is 91 days after the
date on which the Notes mature.

          “Domestic Subsidiary” means any Restricted Subsidiary of the Company other
than a Restricted Subsidiary that is (1) a “controlled foreign corporation”
under Section 957 of the Internal Revenue Code, or (2) a Subsidiary of any such
controlled foreign corporation.

          “Earn-Out Obligation” means any contingent consideration based on future
operating performance of the acquired entity or assets or other purchase price
adjustment or indemnification obligation, payable following the consummation of
an acquisition based on criteria set forth in the documentation governing or
relating to such acquisition.

          “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 (i) a public offer and sale of common stock (other
than Disqualified Stock) of the Company pursuant to a registration statement
that has been declared effective by the SEC pursuant to the Securities Act
(other than a registration statement on Form S-8 or otherwise relating to
equity securities issuable under any employee benefit plan of the Company),
(ii) and private placement of common stock (other than Disqualified Stock) of
the Company to any Person other than an Affiliate of the Company or (iii) any
private or public sale of common stock of the Parent.

          “Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear
system, and any successor thereto.

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

          “Exchange Notes” means the Notes issued in the Exchange Offer in
accordance with Section 2.07(f).

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

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

9

 

          “Existing Indebtedness” means the aggregate principal amount of
Indebtedness of the Company and its Restricted Subsidiaries (other than
Indebtedness under the Credit Agreement) in existence on the Issue Date after
giving effect to the application of the proceeds of the Notes and any
Indebtedness under the Credit Agreement borrowed on the Issue Date, until such
amounts are repaid.

          “Fair Market Value” means the price that would be paid in an arm’s-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy as determined in
good faith by the Board of Directors, whose determination, unless otherwise
specified, shall be conclusive if evidenced by a Board Resolution.

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

	(1)	 	the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers’
acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations (other than Hedging
Obligations that are incurred for the purpose of fixing, hedging or
swapping interest rate, commodity price or foreign currency exchange
rate risk (or to reverse or amend any such agreements previously
made for such purposes), and not for speculative purposes); plus
	 
	(2)	 	the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
	 
	(3)	 	any interest expense on Indebtedness of another Person that
is Guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries, whether or not such Guarantee or Lien is
called upon; plus
	 
	(4)	 	the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of Disqualified Stock or
preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable
solely in Equity Interests of the Company (other than Disqualified
Stock) or to the Company or a Restricted Subsidiary of the Company,
multiplied by (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal,
state, local and foreign statutory tax rate of such Person,
expressed as a decimal,

in each case, on a consolidated basis and in accordance with GAAP.

10

 

          “Fixed Charge Coverage Ratio” means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
Guarantees, repays, repurchases or redeems any Indebtedness or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of such period.

          In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

	(1)	 	acquisitions and dispositions of business entities or
property and assets constituting a division or line of business of
any Person that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date shall be given pro forma
effect as if they had occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference
period shall be calculated on a pro forma basis in accordance with
Regulation S-X under the Securities Act, but without giving effect
to clause (3) of the proviso set forth in the definition of
Consolidated Net Income;
	 
	(2)	 	the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, shall be
excluded;
	 
	(3)	 	the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, shall be excluded, but only to
the extent that the obligations giving rise to such Fixed Charges
will not be obligations of the specified Person or any of its
Restricted Subsidiaries following the Calculation Date; and
	 
	(4)	 	consolidated interest expense attributable to interest on any
Indebtedness (whether existing or being incurred) computed on a pro
forma basis and bearing a floating interest rate shall be computed
as if the rate in effect on the Calculation Date (taking into
account any interest rate option, swap, cap or similar agreement
applicable to such Indebtedness if such agreement has a remaining
term in excess of 12 months or, if shorter, at least equal to the
remaining term of such Indebtedness) had been the applicable rate
for the entire period.

          “Foreign Subsidiary” means any Restricted Subsidiary of the Company
incorporated in any jurisdiction outside the United States; provided that
substantially all of such Restricted Subsidiary’s assets are located outside
the United States.

11

 

          “GAAP” means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the opinions and pronouncements of
the Public Company Accounting Oversight Board and in the 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.

          “Global Note Legend” means the legend set forth in Section 2.07(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.

          “Global Notes” means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A, issued in accordance with Section 2.01 or Section 2.07.

          “Government Securities” means securities that are direct obligations of
the United States of America for the timely payment of which its full faith and
credit is pledged.

          “Guarantee” means, as to any Person, 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, by way of a
pledge of assets or through letters of credit or reimbursement agreements in
respect thereof, of all or any part of any Indebtedness of another Person.

          “Guarantors” means:

	(1)	 	the Parent;
	 
	(2)	 	each direct or indirect Domestic Subsidiary of the Company on
the Issue Date (other than any Excluded Subsidiary); and
	 
	(3)	 	any other Subsidiary of the Company that executes a Note
Guarantee in accordance with the provisions of this Indenture;

and their respective successors and assigns until released from their
obligations under their Note Guarantees and this Indenture in accordance with
the terms of this Indenture.

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

	(1)	 	interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements and other agreements or arrangements
with respect to exposure to interest rates;
	 
	(2)	 	commodity swap agreements, commodity option agreements,
forward contracts and other agreements or arrangements with respect
to exposure to commodity prices; and

12

 

	(3)	 	foreign exchange contracts, currency swap agreements and

other agreements or arrangements with respect to exposure to foreign
currency exchange rates.

          “Holder” means a Person in whose name a Note is registered.

          “incur” means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become directly or indirectly liable for or with
respect to, or become responsible for, the payment of, contingently or
otherwise, such Indebtedness; provided that (1) any Indebtedness of a Person
existing at the time such Person becomes a Restricted Subsidiary of the Company
shall be deemed to be incurred by such Restricted Subsidiary at the time it
becomes a Restricted Subsidiary of the Company and (2) neither the accrual of
interest nor the accretion of original issue discount nor the payment of
interest in the form of additional Indebtedness with the same terms and the
payment of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock (to the extent provided for when the
Indebtedness or Disqualified Stock on which such interest or dividend is paid
was originally issued) shall be considered an incurrence of Indebtedness;
provided that in each case the amount thereof is for all other purposes
included in the Fixed Charges and Indebtedness of the Company or its Restricted
Subsidiary as accrued.

          “Indebtedness” means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:

	(1)	 	in respect of borrowed money;
	 
	(2)	 	evidenced by bonds, notes, debentures or similar instruments;
	 
	(3)	 	evidenced by letters of credit (or reimbursement agreements
in respect thereof), but excluding obligations with respect to
letters of credit (including trade letters of credit) securing
obligations (other than obligations described in clause (1) or (2)
above or clause (5), (6) or (8) below) entered into in the ordinary
course of business of such Person to the extent such letters of
credit are not drawn upon or, if drawn upon, to the extent such
drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement;
	 
	(4)	 	in respect of banker’s acceptances;
	 
	(5)	 	in respect of Capital Lease Obligations and Attributable
Debt;
	 
	(6)	 	in respect of the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an
accrued expense or trade payable;
	 
	(7)	 	representing Hedging Obligations, other than Hedging
Obligations that are incurred for the purpose of fixing, hedging or
swapping interest rate, commodity price or foreign currency exchange
rate risk (or to reverse or amend any such agreements previously
made for such purposes), and not for speculative purposes, and that
do not increase the Indebtedness of the obligor outstanding at any
time other than as a result of fluctuations in interest rates,
commodity prices or foreign

13

 

	 	 	currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder; or
	 
	(8)	 	representing Disqualified Stock valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued
dividends.

In addition, the term “Indebtedness” includes (x) all Indebtedness of others
secured by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person), provided that the amount of
such Indebtedness shall be the lesser of (A) the Fair Market Value of such
asset at such date of determination and (B) the amount of such Indebtedness,
and (y) to the extent not otherwise included, the Guarantee by the specified
Person of any Indebtedness of any other Person. For purposes hereof, the
“maximum fixed repurchase price” of any Disqualified Stock which does not have
a fixed repurchase price shall be calculated in accordance with the terms of
such Disqualified Stock as if such Disqualified Stock were repurchased on any
date on which Indebtedness shall be required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Disqualified Stock, such fair market shall be determined in good
faith by the Board of Directors of the issuer of such Disqualified Stock.

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

	(1)	 	the accreted value thereof, in the case of any Indebtedness
issued with original issue discount; and
	 
	(2)	 	the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness;

provided that Indebtedness shall not include:

	(i)	 	any liability for federal, state, local, foreign or other
taxes,
	 
	(ii)	 	performance, surety or appeal bonds provided in the ordinary
course of business,
	 
	(iii)	 	any liability arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business,
provided, however, that such liability is extinguished within five
Business Days of its incurrence,
	 
	(iv)	 	the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by worker’s compensation
claims and other statutory or regulatory obligations, self-insurance
obligations, tender, bid, performance, governmental contract, surety
or appeal bonds, standby letters of credit and warranty and
contractual service obligations of like nature, trade letters of
credit or documentary letters of credit, in each case to the extent
incurred in the ordinary course of business of the Company or such
Restricted Subsidiary,

14

 

	(v)	 	agreements providing for indemnification, adjustment of
purchase price or similar obligations, or Guarantees or letters of
credit, surety bonds or performance bonds securing any obligations
of the Company or any of its Restricted Subsidiaries pursuant to
such agreements, in any case incurred in connection with the
disposition of any business, assets or Restricted Subsidiary (other
than Guarantees of Indebtedness incurred by any Person acquiring all
or any portion of such business, assets or Restricted Subsidiary for
the purpose of financing such acquisition), so long as the principal
amount does not exceed the gross proceeds actually received by the
Company or any Restricted Subsidiary in connection with such
disposition, or
	 
	(vi)	 	any Earn-Out Obligation, except to the extent that the
contingent consideration relating thereto is not paid within ten
Business Days after the contingency relating thereto is resolved.

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

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

          “Institutional Accredited Investor” means an institution that is an
“accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.

          “Investments” means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans or other extensions of credit (including Guarantees, but excluding
advances to customers or suppliers in the ordinary course of business that are,
in conformity with GAAP, recorded as accounts receivable, prepaid expenses or
deposits on the balance sheet of the Company or its Restricted Subsidiaries and
endorsements for collection or deposit arising in the ordinary course of
business), advances (excluding commission, payroll, travel and similar advances
to officers, employees and independent sales agents and dealers consistent with
past practices), capital contributions (by means of any transfer of cash or
other property to others or any payment for property or services for the
account or use of others), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.

          If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the Fair Market Value of the Investment in such
Subsidiary not sold or disposed of in an amount determined as provided in
Section 4.07(c). The acquisition by the Company or any Restricted Subsidiary
of the Company of a Person that holds an Investment in a third Person shall be
deemed to be an Investment by the Company or such Restricted Subsidiary in such
third Person in an amount equal to the Fair Market Value of the

15

 

Investment held by the acquired Person in such third Person in an amount
determined as provided in Section 4.07(c).

          “Issue Date” means the date of the original issuance of the Notes under
this Indenture.

          “Legal Holiday” means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.

          “Legended Regulation S Global Note” means a global Note in the form of
Exhibit A bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
at maturity of the Notes initially sold in reliance on Rule 903 of Regulation
S.

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

          “Lien” means, with respect to any asset, any mortgage, lien, 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.

          “Liquidated Damages” means all liquidated damages then owing pursuant to
the Registration Rights Agreement.

          “Merger Agreement” means the merger agreement, dated August 8, 2004, among
the Parent, Encore Medical Merger Sub, Inc., Empi, Inc. and MPI Holdings LLC
relating to the acquisition by the Parent of Empi, Inc.

          “Net Income” means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:

	(1)	 	any gain (or loss), together with any related provision for
taxes on such gain (or loss), realized in connection with: (a) any
sale of assets outside the ordinary course of business of such
Person or (b) the disposition of any securities by such Person or
any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries;
and
	 
	(2)	 	any extraordinary gain (or loss), together with any related
provision for taxes on such extraordinary gain (or loss).

16

 

          “Net Proceeds” means the aggregate cash proceeds, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not the interest component, thereof) received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (1) the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting,
investment banking and brokerage fees, and sales commissions, and any
relocation expenses incurred as a result thereof, (2) taxes paid or payable as
a result thereof, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, (3) amounts required to
be applied to the repayment of Indebtedness or other liabilities, secured by a
Lien on the asset or assets that were the subject of such Asset Sale, or is
required to be paid as a result of such sale, (4) any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance
with GAAP, (5) payments to holders of Equity Interests in a Restricted
Subsidiary of the Company (other than such Equity Interests held by the Company
or any of its Restricted Subsidiaries thereof) that has consummated an Asset
Sale, which payments are required to be made as a result of such Asset Sale and
(6) appropriate amounts to be provided by the Company or its Restricted
Subsidiaries as a reserve against liabilities associated with such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
determined in accordance with GAAP.

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

          “Note Guarantee” means a Guarantee of the Notes pursuant to this
Indenture.

          “Notes” means the 9.75% Senior Subordinated Notes due 2012 of the Company
issued on the date hereof and any Additional Notes, including any Exchange
Notes. The Notes and the Additional Notes (including any Exchange Notes), if
any, shall be treated as a single class for all purposes under this Indenture.

          “Obligations” means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

          “Offering Memorandum” means the offering memorandum, dated September 28,
2004, relating to the Company’s 9.75% Senior Subordinated Notes due 2012.

          “Officer” means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, the Controller, the Secretary or any
Vice President of such Person.

          “Officers’ Certificate” means a certificate signed on behalf of the
Company by at least two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company, that meets the requirements of
this Indenture.

17

 

           “Opinion of Counsel” means an opinion from legal counsel who is reasonably
acceptable to the Trustee (who may be counsel to or an employee of the Company)
that meets the requirements of this Indenture.

           “Parent” means Encore Medical Corporation, a Delaware corporation and its
successors.

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

           “Permitted Business” means any business conducted or proposed to be
conducted (as described in the Offering Memorandum) by the Company and its
Restricted Subsidiaries on the Issue Date and other businesses reasonably
related or ancillary thereto.

           “Permitted Investments” means:

	(1)	 	any Investment in the Company, a Subsidiary Guarantor or a
Foreign Subsidiary;
	 
	(2)	 	any Investment in Cash Equivalents;
	 
	(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 Subsidiary Guarantor or a
Foreign Subsidiary; or
	 
	(b)	 	such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
Company or a Subsidiary Guarantor or a Foreign Subsidiary;

	(4)	 	any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10;
	 
	(5)	 	Investments to the extent acquired in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the
Company;
	 
	(6)	 	Hedging Obligations that are incurred for the purpose of
fixing, hedging or swapping interest rate, commodity price or
foreign currency exchange rate risk (or to reverse or amend any such
agreements previously made for such purposes), and not for
speculative purposes, and that do not increase the Indebtedness of
the obligor outstanding at any time other than as a result of
fluctuations in interest rates, commodity prices or foreign currency
exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
	 
	(7)	 	loans and advances made to and guarantees provided for the
benefit of officers and employees of the Company and its Restricted
Subsidiaries not to exceed $5.0 million in the aggregate at any one
time outstanding;

18

 

	(8)	 	Investments in securities of trade debtors or customers
received pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade
creditors or customers or in good faith settlement of delinquent
obligations of such trade debtors or customers or in good faith
compromise or resolution of litigation, arbitration or other
disputes with Persons who are not Affiliates;
	 
	(9)	 	stock, obligations or securities received in satisfaction of
judgments; and
	 
	(10)	 	other Investments in any Person that is not an Affiliate of
the Company (other than a Restricted Subsidiary) having an aggregate
Fair Market Value (measured on the date each such Investment was
made and without giving effect to subsequent changes in value), when
taken together with all other Investments made pursuant to this
clause (8) since the Issue Date, not to exceed the greater of (i)
$25.0 million and (ii) 5% of total assets as set forth on the most
recent quarterly or annual consolidated balance sheet of the Company
and its Restricted Subsidiaries, prepared in conformity with GAAP.
	 
	 	 	“Permitted Junior Securities” means:
	 
	(1)	 	Equity Interests in the Company or any other business entity
provided for by a plan of reorganization; and
	 
	(2)	 	debt securities of the Company or any Guarantor or any other
business entity provided for by a plan of reorganization that are
subordinated to all Senior Debt and any debt securities issued in
exchange for Senior Debt to substantially the same extent as, or to
a greater extent than, the Notes and the Note Guarantees are
subordinated to Senior Debt under this Indenture.
	 
	 	 	“Permitted Liens” means:
	 
	(1)	 	Liens on the assets of the Company and any Subsidiary
Guarantor securing Senior Debt that was permitted by the terms of
this Indenture to be incurred;
	 
	(2)	 	Liens in favor of the Company or any Restricted Subsidiary;
	 
	(3)	 	Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or
any Restricted Subsidiary of the Company; provided that such Liens
were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of
the Person merged into or consolidated with the Company or the
Restricted Subsidiary;
	 
	(4)	 	Liens on property existing at the time of acquisition thereof
by the Company or any Restricted Subsidiary of the Company, provided
that such Liens were in existence prior to the contemplation of such
acquisition and do not extend to any property other than the
property so acquired by the Company or the Restricted Subsidiary;

19

 

	(5)	 	Liens existing on the Issue Date and any renewals or
extensions thereof;
	 
	(6)	 	Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $15.0 million at any one time
outstanding;
	 
	(7)	 	Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 4.09(b)(iv); provided that any
such Lien (i) covers only the assets acquired, constructed or
improved with such Indebtedness and (ii) is created within 180 days
of such acquisition, construction or improvement; and
	 
	(8)	 	Liens to secure Indebtedness of any Foreign Subsidiary
permitted to be incurred by Section 4.09 covering only assets of a
Foreign Subsidiary.

           “Permitted Refinancing Indebtedness” means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:

	(1)	 	the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus all accrued and unpaid interest thereon and the
amount of any reasonably determined premium necessary to accomplish
such refinancing and such reasonable expenses incurred in connection
therewith);
	 
	(2)	 	such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a
Weighted-Average Life to Maturity equal to or greater than the
Weighted-Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;
	 
	(3)	 	if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment
to the Notes or the Note Guarantees, such Permitted Refinancing
Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to,
the Notes on terms at least as favorable to the Holders of Notes as
those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or
refunded;
	 
	(4)	 	if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is pari passu in right of payment
with the Notes or any Note Guarantees, such Permitted Refinancing
Indebtedness is pari passu with, or subordinated in right of payment
to, the Notes or such Note Guarantees; and
	 
	(5)	 	such Permitted Refinancing Indebtedness is incurred either by
the Company or by the Restricted Subsidiary who is the obligor on
the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.

20

 

           “Permitted Tax Refund Payment” means payments made to the former
shareholders of Empi, Inc. as provided in the Merger Agreement from the tax
refunds received by the Company or any of its Restricted Subsidiaries from the
operations of Empi, Inc. and its subsidiaries for periods prior to and
including the Issue Date in an amount not to exceed the lesser of $6.0 million
and the amount of such refunds (together with any interest thereon) received by
the Company or any of its Restricted Subsidiaries following the Issue Date.

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

           “Preferred Stock” means, with respect to any Person, any Capital Stock of
such Person that has preferential rights to any other Capital Stock of such
Person with respect to dividends or redemptions upon liquidation.

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

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

           “Registration Rights Agreement” means the Registration Rights Agreement,
dated as of the date hereof, by and among the Company, the initial Guarantors
and Banc of America Securities LLC and First Albany Capital, Inc. as such
agreement may be amended, modified or supplemented from time to time and, with
respect to any Additional Notes, one or more registration rights agreements
between the Company and the other parties thereto, as such agreement(s) may be
amended, modified or supplemented from time to time, relating to rights given
by the Company to the purchasers of Additional Notes to register such
Additional Notes under the Securities Act.

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

           “Regulation S Global Note” means a Legended Regulation S Global Note or an
Unlegended Regulation S Global Note, as appropriate.

           “Replacement Assets” means (1) inventory or non-current assets that will
be used or useful in a Permitted Business or (2) substantially all the assets
of a Permitted Business or a majority of the Voting Stock of any Person engaged
in a Permitted Business that will become on the date of acquisition thereof a
Restricted Subsidiary that is a Guarantor.

           “Representative” means the trustee, agent or representative for any Senior
Debt.

           “Responsible Officer,” when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

21

 

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

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

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

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

           “Restricted Subsidiary” of a Person means any Subsidiary of such Person
that is not an Unrestricted Subsidiary.

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

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

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

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

           “sale and leaseback transaction” means, with respect to any Person, any
transaction involving any of the assets or properties of such Person whether
now owned or hereafter acquired, whereby such Person sells or transfers such
assets or properties and then or thereafter leases such assets or properties or
any part thereof or any other assets or properties which such Person intends to
use for substantially the same purpose or purposes as the assets or properties
sold or transferred.

           “SEC” means the Securities and Exchange Commission.

           “Securities Act” means the Securities Act of 1933, as amended.

           “Senior Debt” means:

	(1)	 	all Indebtedness of the Company or any Guarantor outstanding
under the Credit Agreement and all Hedging Obligations with respect
thereto, whether outstanding on the Issue Date or incurred
thereafter;
	 
	(2)	 	any other Indebtedness of the Company or any Guarantor
permitted to be incurred under the terms of this Indenture, unless
the instrument under which such Indebtedness is incurred expressly
provides that it is on a parity with or subordinated in right of
payment to the Notes or any Note Guarantee; and
	 
	(3)	 	all Obligations with respect to the items listed in the
preceding clauses (1) and (2) (including any interest accruing
subsequent to the filing of a petition of

22

 

	 	 	bankruptcy at the rate
provided for in the documentation with respect thereto, whether or
not such interest is an allowed claim under applicable law).

           Notwithstanding anything to the contrary in the preceding paragraph,
Senior Debt will not include:

	(1)	 	any liability for federal, state, local, foreign or other
taxes owed or owing by the Company or any Guarantor;
	 
	(2)	 	any Indebtedness of the Company or Subsidiary Guarantor to
the Parent, any of their Subsidiaries or other Affiliates;
	 
	(3)	 	any trade payables;
	 
	(4)	 	the portion of any Indebtedness that is incurred in violation
of this Indenture;
	 
	(5)	 	any Indebtedness of the Company or any Guarantor that, when
incurred, was without recourse to the Company or such Guarantor;
	 
	(6)	 	any repurchase, redemption or other obligation in respect of
Disqualified Stock; or
	 
	(7)	 	any Indebtedness owed to any employee of the Parent or any of
the Parent’s Subsidiaries.

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

           “Significant Subsidiary” means any Subsidiary that would constitute a
“significant subsidiary” within the meaning of Article 1 of Regulation S-X of
the Securities Act.

           “Stated Maturity” means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not
include any contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for the payment
thereof.

           “Subsidiary” means, with respect to any specified Person:

	(1)	 	any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof
is at the time 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 (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such
Person or (b) the only general

23

 

	 	 	partners of which are such Person or
one or more Subsidiaries of such Person (or any combination
thereof).

           “TIA” means the Trust Indenture Act of 1939, as in effect on the date on
which this Indenture is qualified under the TIA.

           “Transactions” means the acquisition of Empi, Inc. by the Parent, entering
into the Credit Agreement and the other transactions described in the Offering
Memorandum.

           “Trustee” means Wells Fargo Bank, N.A., a nationally chartered banking
association, until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.

           “Unlegended Regulation S Global Note” means a permanent global Note in the
form of Exhibit A bearing the Global Note Legend, deposited with or on behalf
of and registered in the name of the Depositary or its nominee and issued upon
expiration of the Restricted Period.

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

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

           “Unrestricted Subsidiary” means any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a Board Resolution in compliance with Section 4.16 and
any Subsidiary of such Subsidiary.

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

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

           “Weighted-Average Life to Maturity” means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:

	(1)	 	the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment
at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
	 
	(2)	 	the then outstanding principal amount of such Indebtedness.

24

 

Section 1.02. Other Definitions.

	 	 	 	 	 
	 	 	Defined in
	Term
	 	Section

	“Act”
	 	 	13.14	 
	“Affiliate Transaction”
	 	 	4.11	 
	“Asset Sale Offer”
	 	 	4.10	 
	“Authentication Order”
	 	 	2.02	 
	“Change of Control Offer”
	 	 	4.14	 
	“Change of Control Payment”
	 	 	4.14	 
	“Change of Control Payment Date”
	 	 	4.14	 
	“Covenant Defeasance”
	 	 	8.03	 
	“DTC”
	 	 	2.01	 
	“Event of Default”
	 	 	6.01	 
	“Legal Defeasance”
	 	 	8.02	 
	“nonpayment default”
	 	 	12.03	 
	“Offer Amount”
	 	 	3.08	 
	“Offer Period”
	 	 	3.08	 
	“offshore transaction”
	 	 	2.07	 
	“Paying Agent”
	 	 	2.04	 
	“Payment Blockage Notice”
	 	 	12.03	 
	“Payment Default”
	 	 	6.01	 
	“Permitted Debt”
	 	 	4.09	 
	“Purchase Date”
	 	 	3.08	 
	“Registrar”
	 	 	2.04	 
	“Related Proceedings”
	 	 	13.09	 
	“Repurchase Offer”
	 	 	3.08	 
	“Restricted Payments”
	 	 	4.07	 
	“Specified Courts”
	 	 	13.09	 

Section 1.03. Incorporation by Reference of Trust Indenture Act.

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

           The following TIA terms used in this Indenture have the following
meanings:

     “indenture securities” means the Notes and the Guarantees;

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

     “indenture to be qualified” means this Indenture;

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

     “obligor” on the Notes means the Company, the Guarantors and any
successor obligor upon the Notes or the Guarantees.

25

 

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

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

	(a)	 	a term has the meaning assigned to it;
	 
	(b)	 	an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
	 
	(c)	 	“or” is not exclusive;
	 
	(d)	 	words in the singular include the plural, and in
the plural include the singular;
	 
	(e)	 	“herein”, “hereof” and other word of similar
import refer to this Indenture as a whole and not to any
particular Section, Article or other subdivision;
	 
	(f)	 	all references to Sections or Articles or
Exhibits refer to Sections or Articles or Exhibits of or to
this Indenture unless otherwise indicated;
	 
	(g)	 	references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement of successor sections or rules adopted by the SEC
from time to time; and
	 
	(h)	 	whenever in this Indenture or the Notes it is
provided that the principal amount with respect to a Note
shall be paid, such provision shall be deemed to require
(whether or not so expressly stated) the simultaneous payment
of any accrued and unpaid interest to the date of payment on
such Note.

ARTICLE TWO

THE NOTES

Section 2.01. Form and Dating.

           (a) General. The Notes and the Trustee’s certificate of authentication
shall be substantially in the form of Exhibit A. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes shall be issued
in registered form without interest coupons in minimum denominations of $1,000
and integral multiples of $1,000 in excess thereof.

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

26

 

           (b) Global Notes. Notes issued in global form shall be substantially in
the form of Exhibit A (and shall include the Global Note Legend thereon and the
“Schedule of Exchanges of Interests in the Global Note” attached thereto).
Notes issued in definitive form shall be substantially in the form of Exhibit A
(but without the Global Note Legend thereon and without the “Schedule of
Exchanges of Interests in the Global Note” attached thereto). Each Global Note
shall represent such amount of the outstanding Notes as shall be specified
therein and each shall provide that it represents the aggregate principal
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or, if the Custodian and the
Trustee are not the same Person, by the Custodian at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.07 hereof.

           (c) Regulation S Global Notes. Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Legended Regulation S
Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, as custodian for The Depository Trust
Company (“DTC”) in New York, New York, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear or Clearstream, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. Following
the termination of the
Restricted Period, beneficial interests in the Legended Regulation S
Global Note may be exchanged for beneficial interests in Unlegended Regulation
S Global Notes pursuant to Section 2.07 and the Applicable Procedures.
Simultaneously with the authentication of Unlegended Regulation S Global Notes,
the Trustee shall cancel the Legended Regulation S Global Note. The aggregate
principal amount of the Regulation S Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and
the Depositary or its nominee, as the case may be, in connection with transfers
of interest as hereinafter provided.

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

Section 2.02. Execution and Authentication.

           At least one Officer of the Company shall sign the Notes for the Company
by manual or facsimile signature.

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

           A Note shall not be valid until authenticated by the manual signature of
the Trustee. Such signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.

27

 

           The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is unlimited.

           The Company may, subject to Article Four of this Indenture and applicable
law, issue Additional Notes under this Indenture, including Exchange Notes.
The Notes issued on the Issue Date and any Additional Notes subsequently issued
shall be treated as a single class for all purposes under this Indenture.

           At any time and from time to time after the execution of this Indenture,
the Trustee shall, upon receipt of a written order of the Company signed by an
Officer of the Company (an “Authentication Order”), authenticate Notes for
original issue in an aggregate principal amount specified in such
Authentication Order. The Authentication Order shall specify the amount of
Notes to be authenticated and the date on which the Notes are to be
authenticated.

           The Trustee may appoint an authenticating agent acceptable to the Company,
which acceptance shall not be unreasonably withheld, to authenticate Notes. An
authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as
an Agent to deal with Holders or an Affiliate of the Company.

Section 2.03. Methods of Receiving Payments on the Notes.

           If a Holder has given wire transfer instructions to the Company, the
Company shall pay all principal, interest and premium and Liquidated Damages,
if any, on that Holder’s Notes in accordance with those instructions. All
other payments on Notes shall be made at the office or agency of the Paying
Agent and Registrar within the City and State of New York unless the Company
elects to make interest payments by check mailed to the Holders at their
addresses set forth in the register of Holders.

Section 2.04. Registrar and Paying Agent.

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

           (b) The Company initially appoints DTC to act as Depositary with respect
to the Global Notes.

           (c) The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.

28

 

Section 2.05. Paying Agent to Hold Money in Trust.

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

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
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).

Section 2.07. Transfer and Exchange.

           (a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes shall be exchanged
by the Company for Definitive Notes if (i) DTC (A) notifies the Company that it
is unwilling or unable to continue to act as Depositary for the Global Notes
and the Company fails to appoint a successor Depositary within 60 days after
receiving such notice or (B) has ceased to be a clearing agency registered
under the Exchange Act and the Company fails to appoint a successor Depositary
within 60 days after becoming aware of such condition; (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the issuance of
Definitive Notes in exchange for Global Notes (in whole but not in part);
provided that in no event shall the Legended Regulation S Global Note be
exchanged by the Company for Definitive Notes other than in accordance with
Section 2.07(c)(ii); or (iii) there shall have occurred and be continuing a
Default or Event of Default with respect to the Notes. Upon the occurrence of
any of the preceding events in (i), (ii) or (iii) above, Definitive Notes shall
be issued in such names as the Depositary shall instruct the Trustee. Global
Notes also may be exchanged or replaced, in whole or in part, as provided in
Sections 2.08 and 2.11 hereof. Every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Section 2.07 or Section 2.08 or 2.11 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not
be exchanged for another Note other than as

29

 

provided in this Section 2.07(a);
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.07(b), (c) or (f) hereof.

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

     (i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided,
however, that prior to the expiration of the Restricted Period, transfers
of beneficial interests in the Legended Regulation S Global Note may not
be made to a U.S. Person or for the account or benefit of a U.S. Person.
Beneficial interests in any Unrestricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note. No written orders or instructions shall
be required to be delivered to the Registrar to effect the transfers
described in this Section 2.07(b)(i).

     (ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.07(b)(i) above,
the transferor of such beneficial interest must deliver to the Registrar
either (A) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase or
(B) (1) a written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable Procedures
directing the Depositary to cause to be issued a Definitive Note in an
amount equal to the beneficial interest to be transferred or exchanged
and (2) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall
be registered to effect the transfer or exchange referred to in (1)
above; provided that in no event shall Definitive Notes be issued upon
the transfer or exchange of beneficial interests in the Legended
Regulation S Global Note other than in accordance with Section
2.07(c)(ii). Upon consummation of an Exchange Offer by the Company in
accordance with Section 2.07(f), the requirements of this Section
2.07(b)(ii) shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of Transmittal
delivered by the holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for transfer
or exchange of beneficial interests in Global Notes contained in this
Indenture and the Notes or otherwise applicable under the Securities Act,
the Trustee

30

 

shall adjust the principal amount at maturity of the relevant
Global Notes pursuant to Section 2.07(i).

     (iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.07(b)(ii) above and the
Registrar receives the following:

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

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

     (iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
Holder thereof for a beneficial interest in an Unrestricted Global Note
or transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.07(b)(ii) above and:

     (A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal (1) it is not an
affiliate (as defined in Rule 144) of the Company, (2) it is not
engaged in, and does not intend to engage in, and has no
arrangement or understanding with any Person to participate in, a
distribution of the Exchange Notes to be issued in the Exchange
Offer and (3) it is acquiring the Exchange Notes in its ordinary
course of business;

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

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

     (D) the Registrar receives the following:

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

31

 

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

and, in each such case set forth in this subparagraph (D), if the
Registrar or the Company so requests or if the Applicable
Procedures so require, an opinion of
counsel in form reasonably acceptable to the Registrar and 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 Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.

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

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

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

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

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

     (B) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B, including the
certifications in item (1) thereof;

     (C) [INTENTIONALLY OMITTED];

     (D) [INTENTIONALLY OMITTED];

     (E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from
the registration

32

 

requirements of the Securities Act other than that
listed in subparagraph (B) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof,
if applicable; or

     (F) if such beneficial interest is being transferred to the
Parent, the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B, including the certifications in
item (3)(a) thereof,

the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.07(i) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.07(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee
shall deliver such Definitive Notes to the Persons in whose names such
Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section
2.07(c)(i) shall bear the Private Placement Legend and shall be subject
to all restrictions on transfer contained therein.

     (ii) Beneficial Interests in Legended Regulation S Global Note to
Definitive Notes. Notwithstanding Section 2.07(c)(i)(A), a beneficial
interest in the Legended Regulation S Global Note may not be exchanged
for a Definitive Note or transferred to a Person who takes delivery
thereof in the form of a Definitive Note prior to (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, except in the case of a transfer pursuant to an exemption
from the registration requirements of the Securities Act other than Rule
903 or Rule 904.

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

     (A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies
in the applicable Letter of Transmittal that (1) it is not an
affiliate (as defined in Rule 144) of the Company, (2) it is not
engaged in, and does not intend to engage in, and has no
arrangement or understanding with any Person to participate in, a
distribution of the Exchange Notes to be issued in the Exchange
Offer and (3) it is acquiring the Exchange Notes in its ordinary
course of business;

33

 

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

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

     (D) the Registrar receives the following:

     (1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such Holder in the form
of Exhibit C, including the certifications in item (1)(b)
thereof; or

     (2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private
Placement Legend, a certificate from such Holder in the form
of Exhibit B, including the certifications in item (4)
thereof;

and, in each such case set forth in this subparagraph (D), if the
Registrar or the Company so requests or if the Applicable
Procedures so require, an opinion of counsel in form reasonably
acceptable to the Registrar and 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
Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.

     (iv) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.07(b)(ii), the
Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.07(i), and
the Company shall execute and the Trustee shall authenticate and deliver
to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for
a beneficial interest pursuant to this Section 2.07(c)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.07(c)(iv) shall not bear the Private
Placement Legend.

34

 

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

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

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

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

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

     (D) if such Restricted Definitive Note is being transferred to
the Parent, the Company or any of its Subsidiaries, a certificate
to the effect set forth in Exhibit B, including the certifications
in item (3)(a) thereof,

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

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

     (A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal (1) it is not an affiliate (as defined in Rule 144) of
the Company, (2) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any Person
to participate in, a distribution of the Exchange Notes to be
issued in the Exchange Offer and (3) it is acquiring the Exchange
Notes in its ordinary course of business;

35

 

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

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

     (D) the Registrar receives the following:

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

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

and, in each such case set forth in this subparagraph (D), if the
Registrar or the Company so requests or if the Applicable
Procedures so require, an opinion of counsel in form reasonably
acceptable to the Registrar and 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
Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.

     Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.07(d)(ii), the Trustee shall cancel the Definitive Notes
and increase or cause to be increased the aggregate principal amount of
the Unrestricted Global Note.

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

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

36

 

           (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder’s compliance with the
provisions of this Section 2.07(e), the Registrar shall register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.07(e).

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

     (A) if the transfer shall be made pursuant to Rule 144A under
the Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B, including the certifications in item (1)
thereof;

     (B) [INTENTIONALLY OMITTED]; and

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

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

     (A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that (1) it is not an affiliate (as defined in Rule
144) of the Company, (2) it is not engaged in, and does not intend
to engage in, and has no arrangement or understanding with any
Person to participate in, a distribution of the Exchange Notes to
be issued in the Exchange Offer and (3) it is acquiring the
Exchange Notes in its ordinary course of business;

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

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

37

 

     (D) the Registrar receives the following:

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

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

and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an opinion of counsel in form reasonably
acceptable to the 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 Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.

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

           (f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons
that certify in the applicable Letters of Transmittal that (x) they are not
affiliates (as defined in Rule 144) of the Company, (y) they are not engaged
in, and do not intend to engage in, and have no arrangement or understanding
with any Person to participate in, a distribution of the Exchange Notes to be
issued in the Exchange Offer and (z) they are acquiring the Exchange Notes in
their ordinary course of business and (ii) Unrestricted Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently
with the issuance of such Notes, the Trustee shall cause the aggregate
principal amount of the applicable Restricted Global Notes to be reduced
accordingly, and the Company shall execute and the Trustee shall authenticate
and deliver to the Persons designated by the Holders of Restricted Global Notes
so accepted Unrestricted Global Notes in the appropriate principal amount.

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

38

 

     (i) Private Placement Legend. Except as permitted below, each
Global Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in substantially
the following form:

THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE
NOR THE GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE HOLDER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE
AND THE GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE
AND THE GUARANTEES ENDORSED HEREON) (THE “RESALE RESTRICTION
TERMINATION DATE”) ONLY (A) TO THE PARENT, THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND
THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION
COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE
THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE
IS COMPLETED AND DELIVERED BY THE

39

 

TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

     Notwithstanding the foregoing, any Global Note or Definitive Note
issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.07 (and all Notes
issued in exchange therefor or substitution thereof) shall not bear the
Private Placement Legend.

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

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV)
THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY.

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

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

           (i) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.12 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who shall take delivery
thereof in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such Global Note
shall be reduced accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such reduction; and if the beneficial interest is being exchanged for
or transferred to a Person who shall take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such

40

 

Global Note by the Trustee or by the Depositary at the direction of the
Trustee to reflect such increase.

     (j) General Provisions Relating to Transfers and Exchanges.

     (i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company’s order or at the Registrar’s request.

     (ii) No service charge shall be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer
taxes or similar governmental charge payable upon exchange or transfer
pursuant to Sections 2.11, 3.06, 3.08, 4.10, 4.14 and 9.05).

     (iii) The Registrar shall not be required to register the transfer
of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.

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

     (v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 and ending at the close of business on the
day of selection, (B) to register the transfer of or to exchange any Note
so selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part, (C) to register the transfer
of or to exchange a Note between a record date and the next succeeding
interest payment date or (D) to register the transfer of or to exchange a
Note tendered and not withdrawn in connection with a Change of Control
Offer or an Asset Sale Offer.

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

     (vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02.

     (viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.07
to effect a registration of transfer or exchange may be submitted by
facsimile and may be transmitted electronically.

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Section 2.08. Replacement Notes.

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

           (b) Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.

Section 2.09. Outstanding Notes.

           (a) The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.10, a Note does
not cease to be outstanding because the Company or an Affiliate of the Company
holds the Note; however, Notes held by the Parent, the Company or a Subsidiary
of the Company shall not be deemed to be outstanding for purposes of Section
3.07(b).

           (b) If a Note is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser or protected purchaser.

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

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

Section 2.10. Treasury Notes.

           In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common
control with the Company, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes that
a Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded.

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Section 2.11. Temporary Notes.

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

           (b) Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.

Section 2.12. Cancellation.

           The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee, and no one else, shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall dispose
of canceled Notes in accordance with its procedures for the disposition of
canceled securities in effect as of the date of such disposition (subject to
the record retention requirement of the Exchange Act). Certification of the
disposition of all canceled Notes shall be delivered to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.

Section 2.13. Defaulted Interest.

           If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or,
upon the written request of the Company, the Trustee in the name and at the
expense of the Company) shall mail or cause to be mailed to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.

Section 2.14. CUSIP Numbers.

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

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ARTICLE THREE

REDEMPTION AND OFFERS TO

PURCHASE

Section 3.01. Notices to Trustee.

          If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07, it shall furnish to the Trustee, at least 30 days
but not more than 60 days before a redemption date, an Officers’ Certificate
setting forth (i) the clause of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount of Notes to
be redeemed and (iv) the redemption price.

Section 3.02. Selection of Notes to Be Redeemed.

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

          (b) The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount at maturity thereof to be redeemed. No Notes
in amounts of $1,000 or less shall be redeemed in part. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.

Section 3.03. Notice of Redemption.

          (a) At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior
to a redemption date if the notice is issued in connection with a defeasance of
the Notes or a satisfaction and discharge of this Indenture.

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

     (i) the redemption date;

     (ii) the redemption price;

     (iii) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such

44

 

Note, a new Note or Notes in
principal amount equal to the unredeemed portion of the original Note
shall be issued in the name of the Holder thereof upon cancellation of
the original Note;

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

     (v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price and become due on the date
fixed for redemption;

     (vi) that, unless the Company defaults in making such redemption
payment, interest, if any, on Notes called for redemption ceases to
accrue on and after the redemption date;

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

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

          (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; provided,
however, that the Company shall have delivered to the Trustee, at least 45 days
prior to the redemption date (or such shorter period of time as may be
acceptable to the Trustee), an Officers’ Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.

Section 3.04. Effect of Notice of Redemption.

          Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. Interest, if any, on Notes called for
redemption ceases to accrue on and after the redemption date, unless the
Company defaults in making the applicable redemption payment. A notice of
redemption may not be conditional.

Section 3.05. Deposit of Redemption Price.

          (a) Prior to 12:00 p.m. (noon) on the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued and unpaid interest and Liquidated Damages, if
any, on all Notes to be redeemed on that date. The Trustee or the Paying Agent
shall promptly return to the Company any money deposited with the Trustee or
the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued and unpaid interest and Liquidated Damages, if
any, on all Notes to be redeemed.

          (b) If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest and Liquidated Damages,
if any, shall cease to accrue on the Notes or the portions of Notes called for
redemption. If a Note is redeemed on or after an interest record date but on
or prior to the related interest payment date, then any accrued and

45

 

unpaid
interest and Liquidated Damages, if any, shall be paid to the Person in whose
name such Note was registered at the close of business on such record date. If
any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal from the redemption
date until such principal is paid and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01.

Section 3.06. Notes Redeemed in Part.

          Upon cancellation of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.

Section 3.07. Optional Redemption.

          (a) Except as set forth in clause (b) of this Section 3.07, the Company
shall not have the option to redeem the Notes pursuant to this Section 3.07
prior to October 1, 2008. On or after October 1, 2008, the Company may redeem
all or a portion of the Notes upon not less than 30 days nor more than 60 days
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages, if
any, thereon, to the applicable redemption date, if redeemed during the
twelve-month period beginning on October 1 of the years indicated below:

	 	 	 	 	 
	Year
	 	Percentage

	2008
	 	 	104.875	%
	2009
	 	 	102.438	%
	2010 and thereafter
	 	 	100.000	%

          (b) At any time prior to October 1, 2007, the Company may redeem up to 35%
of the aggregate principal amount of Notes issued hereunder (including any
Additional Notes) at a redemption price of 109.750% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the redemption date, with the net cash proceeds of one or more
Equity Offerings of the Company (or the Parent to the extent such proceeds are
contributed to the common equity of the Company); provided that (1) at least
65% of the aggregate principal amount of Notes issued under this Indenture
(including any Additional Notes) remains outstanding immediately after the
occurrence of such redemption, excluding Notes held by the Parent or its
Subsidiaries; and (2) the redemption must occur within 60 days of the date of
the closing of such Equity Offering.

          (c) Any redemption pursuant to this Section 3.07 shall be made in
accordance with the provisions of Sections 3.01 through 3.06.

46

 

Section 3.08. Repurchase Offers.

          In the event that, pursuant to Section 4.10 or Section 4.14, the Company
shall be required to commence an offer to all Holders to purchase all or a
portion of their respective Notes (a “Repurchase Offer”), it shall follow the
procedures specified in such Sections and, to the extent not inconsistent
therewith, the procedures specified below.

          The Repurchase Offer shall remain open for a period of no less than 30
days and no more than 60 days following its commencement, except to the extent
that a longer period is required by applicable law (the “Offer Period”). No
later than three Business Days after the termination of the Offer Period (the
“Purchase Date”), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 or 4.14 hereof (the “Offer
Amount”) or, if less than the Offer Amount has been tendered, all Notes
tendered in response to the Repurchase Offer. Payment for any Notes so
purchased shall be made in the same manner as interest payments are made.

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

          Upon the commencement of a Repurchase Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders. The notice
shall contain all
instructions and materials necessary to enable such Holders to tender
Notes pursuant to the Repurchase Offer. The Repurchase Offer shall be made to
all Holders. The notice, which shall govern the terms of the Repurchase Offer,
shall state:

     (i) that the Repurchase Offer is being made pursuant to this Section
3.08 and Section 4.10 or Section 4.14 hereof, and the length of time the
Repurchase Offer shall remain open;

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

     (iii) that any Note not tendered or accepted for payment shall
continue to accrue interest and Liquidated Damages, if any;

     (iv) that, unless the Company defaults in making such payment, any
Note (or portion thereof) accepted for payment pursuant to the Repurchase
Offer shall cease to accrue interest and Liquidated Damages, if any,
after the Purchase Date;

     (v) that Holders electing to have a Note purchased pursuant to a
Repurchase Offer may elect to have Notes purchased in integral multiples
of $1,000 only;

     (vi) that Holders electing to have a Note purchased pursuant to any
Repurchase Offer shall be required to surrender the Note, with the form
entitled “Option of Holder to Elect Purchase” on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, the
Depositary, if appointed by the Company, or a

47

 

Paying Agent at the address
specified in the notice at least three days before the Purchase Date;

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

     (viii) that, if the aggregate amount of Notes surrendered by Holders
exceeds the Offer Amount, the Trustee shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and

     (ix) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).

          On the Purchase Date, the Company shall, to the extent lawful, accept for
payment on a pro rata basis to the extent necessary, the Offer Amount of Notes
(or portions thereof) tendered pursuant to the Repurchase Offer, or if less
than the Offer Amount has been tendered, all Notes tendered, and shall deliver
to the Trustee an Officers’ Certificate stating that such Notes (or portions
thereof) were accepted for payment by the Company in accordance with
the terms of this Section 3.08. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than three
days after the Purchase Date) mail or deliver to each tendering Holder an
amount equal to the purchase price of Notes tendered by such Holder, as the
case may be, and accepted by the Company for purchase, and the Company shall
promptly issue a new Note. The Trustee, upon written request from the Company
shall authenticate and mail or deliver such new Note to such Holder, in a
principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to
the respective Holder thereof. The Company shall publicly announce the results
of the Repurchase Offer on the Purchase Date.

Section 3.09. No Sinking Fund.

          The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.

ARTICLE FOUR

COVENANTS

Section 4.01. Payment of Notes.

          (a) The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided in
the Notes. Principal, premium, if any, and interest shall be considered paid
on the date due if the Paying Agent, where not the Parent, the Company or one
of the Company’s Subsidiaries, holds as of 12:00 p.m.

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(noon) Eastern Time on
the due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. The Company shall pay all Liquidated Damages, if any, in
the same manner on the dates and in the amounts set forth in the Registration
Rights Agreement.

          (b) The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest,
and Liquidated Damages (without regard to any applicable grace period) at the
same rate to the extent lawful.

Section 4.02. Maintenance of Office or Agency.

          (a) The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee or
Registrar or agent of the Trustee or Registrar) where Notes may be surrendered
for registration of transfer or for exchange and where notices and demands to
or upon the Company in respect of the Notes 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.

          (b) The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York 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 as one such office or agency of the Company in accordance with Section
2.04.

Section 4.03. Reports.

          (a) Whether or not required by the SEC, the Company shall file a copy of
all of the information and reports referred to in clauses (i) and (ii) below
with the SEC for public availability within the time periods specified in the
SEC’s rules and regulations (unless the SEC will not accept such a filing) and,
upon request, furnish such information to the Holders of the Notes and
prospective investors:

     (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K
under the Exchange Act if the Company were required to file such Forms,
including a “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and, with respect to the

49

 

annual information
only, a report on the annual financial statements by the Company’s
certified independent accountants; and

     (ii) all current reports that would be required to be filed with the
SEC on Form 8-K under the Exchange Act if the Company were required to
file such reports;

provided, however, that the filings, reports and other information required to
be filed and provided by the Company hereunder may be those of the Parent,
rather than the Company, for so long as (a) the Parent is a Guarantor of the
Notes and (b) the filing by the Parent of such filings, reports and other
information would satisfy the requirements of the Company under Section 13 and
15(d) of the Exchange Act.

          (b) If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
this covenant shall include the presentation in the footnotes to the financial
statements of the Company as is required by Rule 3-10 of Regulation S-X,
promulgated pursuant to the Securities Act (as such
Regulation may be amended), with respect to the Company and the Guarantors
separate from the Company’s Subsidiaries that are not Guarantors.

          (c) For so long as any Notes remain outstanding, the Company and the
Guarantors shall furnish to the Holders and to prospective investors, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.

Section 4.04. Compliance Certificate.

          (a) The Company and each Guarantor (to the extent that such Guarantor is
so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers’ Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge, the Company
has kept, observed, performed and fulfilled all of its obligations under this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event
of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.

          (b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a)(i) above shall be accompanied
by a written statement of the Company’s independent public accountants (which
shall be a firm of established national reputation) that in making the
examination necessary for certification of such financial statements, nothing
has come to their attention that would lead them to believe that the Company

50

 

has failed to comply with the provisions of Article Four or Article Five hereof
in so far as they relate to financial or accounting matters or, if an event of
noncompliance has come to their attention, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation.

          (c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, within three Business Days after any Officer becomes
aware of any Default or Event of Default, an Officers’ Certificate specifying
such Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto.

Section 4.05. Taxes.

          The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, any taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the
Holders of the Notes.

Section 4.06. Stay, Extension and Usury Laws.

          The Company and each of the Guarantors covenant (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been
enacted.

Section 4.07. 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 other payment or
distribution on account of the Company’s or any of its Restricted
Subsidiaries’ Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries other than Permitted Tax
Refund Payments) or to the direct or indirect holders of the Company’s or
any of its Restricted Subsidiaries’ Equity Interests in their capacity as
such (other than dividends, payments or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or to the
Company or a Restricted Subsidiary of the Company);

     (ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company
or any Restricted Subsidiary held by Persons other than the Company or
any of its Restricted Subsidiaries;

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     (iii) make any voluntary payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness
that is subordinated to the Notes or any Note Guarantee; or

     (iv) make any Restricted Investment

(all such payments and other actions set forth in Sections 4.07(a)(i) through
(iv) being collectively referred to as “Restricted Payments”),

unless, at the time of and after giving effect to such Restricted Payment:

     (A) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;

     (B) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.09(a); and

     (C) 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 (excluding Restricted
Payments permitted by clauses (2), (3), (4), (5), (6), (7), (8),
(10) and (11) of Section 4.07(b)), is less than the sum, without
duplication, of:

     (1) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after the
Issue Date 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, if such
Consolidated Net Income for such period is a deficit, less
100% of such deficit), plus

     (2) 100% of the aggregate net cash proceeds received by
the Company since the Issue Date as a contribution to its
common equity capital or from the issue or sale of Equity
Interests of the Company (other than Disqualified Stock) or
from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt
securities of the Company that have been converted into or
exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to
a Subsidiary of the Company), plus

     (3) with respect to Restricted Investments made by the
Company and its Restricted Subsidiaries after the Issue Date,
an amount equal to the net reduction in such Investments
(other than reductions in Permitted Investments) in any
Person resulting from repayments of loans or advances, or
other transfers of assets, in each case to the Company or

52

 

any Restricted Subsidiary or from the net cash proceeds from the
sale of any such Investment (except, in each case, to the
extent any such payment or proceeds are included in the
calculation of Consolidated Net Income, from the release of
any Guarantee (except to the extent any amounts are
paid under such Guarantee) or from redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries), not to
exceed, in each case, the amount of Investments previously
made by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary.

          (b) So long as no Default has occurred and is continuing or would be
caused thereby, Section 4.07(a) shall not prohibit:

     (1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would
have complied with the provisions of this Indenture;

     (2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of Company or any Guarantor
or of any Equity Interests of the Company or any Restricted Subsidiary in
exchange for, or out of the net cash proceeds of a contribution to the
common equity of the Company or a substantially concurrent sale (other
than to a Subsidiary of the Company) of, Equity Interests of the Company
(other than Disqualified Stock); provided that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from
Section 4.07(a)(C)(2);

     (3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Guarantor with the net
cash proceeds from an incurrence of Permitted Refinancing Indebtedness;

     (4) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of its common Equity Interests on a pro rata
basis;

     (5) Investments acquired as a capital contribution to, or in
exchange for, or out of the net cash proceeds of a substantially
concurrent offering of, Equity Interests (other than Disqualified Stock)
of the Company; provided that the amount of any such net cash proceeds
that are utilized for any such acquisition or exchange shall be excluded
from Section 4.07(a)(C)(2);

     (6) the repurchase of Capital Stock deemed to occur upon the
exercise of options or warrants if such Capital Stock represents all or a
portion of the exercise price thereof;

     (7) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Parent or the Company (or any of
the Company’s Restricted Subsidiaries) held by any current or former
employee or director of the Parent or the Company (or any of the
Company’s Restricted Subsidiaries) pursuant to the terms of any employee
equity subscription agreement, stock option agreement or similar
agreement entered into in the ordinary course of business; provided that
the aggregate price paid

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(excluding the cancellation of debt owing by
such individual) for all such repurchased, redeemed, acquired or retired
Equity Interests in any calendar year shall not exceed $2.5 million;
provided that the Company may carry over and make in subsequent calendar
years, in addition to the amounts permitted for such calendar year, the
amount of such
repurchases, redemptions, acquisitions or retirements for value
permitted to be made, but not made, in the immediately preceding three
calendar years;

     (8) cash payments, dividends or loans to the Parent in amounts equal
to: (i) the amounts required for the Parent to pay any federal, state,
local or foreign taxes to the extent such taxes are directly attributable
to the income, gain, capital or assets of the Company and the Company’s
Restricted Subsidiaries, provided that any refunds received by the Parent
attributable to the Company or any of the Company’s Subsidiaries shall
promptly be returned by the Parent to the Company through a capital
contribution or a purchase of Capital Stock (other than Disqualified
Stock) of the Company and provided further that the amount of any such
capital contribution or purchase shall be excluded from Section
4.07(a)(C)(2), (ii) the amounts required for the Parent to pay franchise
taxes and other fees required to maintain the Company’s legal existence
and all costs and expenses (including, without limitation, legal and
accounting expenses and filing fees) incurred by the Parent with respect
to filings with the SEC and fees and expenses associated with the
Transactions and (iii) the amounts required for operating costs of the
Parent to the extent attributable to the ownership or operation of the
Company and the Company’s Restricted Subsidiaries, including in respect
of directors fees and expenses, judgments, administrative, legal and
accounting services provided by third parties;

     (9) the repurchase of Indebtedness subordinated to the Notes at a
purchase price not greater than 101% of the principal amount thereof
(plus accrued and unpaid interest) pursuant to a mandatory offer to
repurchase made upon the occurrence of a Change of Control or upon
certain Asset Sales; provided that the Company first makes an offer to
purchase the Notes (and repurchase all tendered notes) under this
Indenture pursuant to Sections 4.10 and 4.14;

     (10) other Restricted Payments in an aggregate amount since the
Issue Date not to exceed $20.0 million; or

     (11) the declaration and payment of dividends and distributions to
holders of any class or series of Disqualified Stock of the Company or
any of its Restricted Subsidiaries, in each case issued or incurred in
accordance with Section 4.09;

          (c) The amount of all Restricted Payments (other than cash) shall be the
Fair Market Value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. Not later
than the date of making any Restricted Payment, the Company shall deliver to
the Trustee an Officers’ Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed.

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Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.

          (a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:

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

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

     (iii) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries.

          (b) However, the preceding restrictions shall not apply to encumbrances or
restrictions:

     (i) existing under, by reason of or with respect to the Credit
Agreement, Existing Indebtedness or any other agreements in effect on the
Issue Date and any amendments, modifications, restatements, renewals,
extensions, supplements, refundings, replacements or refinancings
thereof; provided that the encumbrances and restrictions in any such
amendments, modifications, restatements, renewals, extensions,
supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, than those contained in the Credit
Agreement, Existing Indebtedness or such other agreements as in effect on
the Issue Date;

     (ii) set forth in this Indenture, the Notes and the Note Guarantees;

     (iii) existing under, by reason of or with respect to applicable
law;

     (iv) with respect to any Person or the property or assets of a
Person acquired by the Company or any of its Restricted Subsidiaries
existing at the time of such acquisition and not incurred in connection
with or in contemplation of 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 and any amendments, modifications, restatements,
renewals, extensions, supplements, refundings, replacements or
refinancings thereof; provided that the encumbrances and restrictions in
any such amendments, modifications, restatements, renewals, extensions,
supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, than those in effect on the date of the
acquisition;

55

 

     (v) in the case of Section 4.08(a)(iii):

     (1) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset,

     (2) existing by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any property
or assets of the Company or any Restricted Subsidiary thereof not
otherwise prohibited by this Indenture,

     (3) customary restrictions in Capital Lease Obligations,
security agreements or mortgages securing Indebtedness of the
Company or a Restricted Subsidiary of the Company to the extent
such restrictions restrict the transfer of the property subject to
such Capital Lease Obligations, security agreements and mortgages,
or

     (4) arising or agreed to in the ordinary course of business,
not relating to any Indebtedness, and that do not, individually or
in the aggregate, detract from the value of property or assets of
the Company or any Restricted Subsidiary thereof in any manner
material to the Company or any Restricted Subsidiary thereof;

     (vi) existing under, by reason of or with respect to any agreement
for the sale or other disposition of all or substantially all of the
capital stock of, or property and assets of, a Restricted Subsidiary that
restrict distributions by that Restricted Subsidiary pending such sale or
other disposition;

     (vii) restrictions on cash or other deposits or net worth imposed by
customers or required by insurance, surety or bonding companies, in each
case, under contracts entered into in the ordinary course of business;

     (viii) existing under, by reason of or with respect to customary
supermajority voting provisions and customary provisions with respect to
the disposition or distribution of assets or property, in each case
contained in joint venture agreements;

     (ix) contracts entered into in the ordinary course of business, not
relating to any Indebtedness, and that do not, individually or in the
aggregate, detract from the value of property or assets of the Company or
any of its Restricted Subsidiaries in any manner material to the Company
or any of its Restricted Subsidiaries;

     (x) Permitted Refinancing Indebtedness, provided that the
encumbrances and restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness
being refinanced; and

     (xi) Indebtedness of any Foreign Subsidiary permitted to be incurred
pursuant to Section 4.09; provided that the Board of Directors of the
Company determines in good faith at the time such dividend or other
payment restrictions are created that they will not

56

 

materially adversely
affect the Company’s ability to fulfill its obligations under the Notes
and this Indenture.

Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.

          (a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, incur any Indebtedness (including
Acquired Debt), and the Company shall not permit any of its Restricted
Subsidiaries to issue any preferred stock; provided, however, that the Company
or any Restricted Subsidiary of the Company may incur Indebtedness, and any
Restricted Subsidiary may issue preferred stock, if the Fixed Charge Coverage
Ratio for the Company’s 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 would have been at least 2.0 to
1, determined on a pro forma, consolidated basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred at the beginning of such four-quarter period.

          (b) So long as no Default shall have occurred and be continuing or would
be caused thereby, Section 4.09(a) will not prohibit the incurrence of any of
the following items of Indebtedness (collectively, “Permitted Debt”):

     (i) the incurrence by (x) the Company of Indebtedness under Credit
Facilities (and the incurrence by any Restricted Subsidiary of the
Company of Guarantees thereof) or (y) any Foreign Subsidiary Indebtedness
under Credit Facilities in an aggregate principal amount at any one time
outstanding pursuant to this clause (i) including all Permitted
Refinancing Indebtedness incurred to refund refinance or replace any
Indebtedness incurred pursuant to this clause (i) (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Company and its Restricted Subsidiaries thereunder) not
to exceed $180.0 million, provided that the maximum amount of
Indebtedness outstanding at any time under clause (y) of this clause (i)
shall not exceed $20.0 million, less the aggregate amount of all Net
Proceeds of Asset Sales applied by the Company or any Restricted
Subsidiary to permanently repay any such Indebtedness (and, in the case
of any revolving credit Indebtedness, to effect a corresponding
commitment reduction thereunder) pursuant to Section 4.10;

     (ii) the incurrence of Existing Indebtedness;

     (iii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Note Guarantees to
be issued on the Issue Date and the Exchange Notes and the related Note
Guarantees to be issued pursuant to the Registration Rights Agreement;

     (iv) the incurrence by the Company or any Restricted Subsidiary of
the Company of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property, plant or equipment used
in the business of the Company or such Restricted Subsidiary, in an
aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to

57

 

refund, refinance or replace any Indebtedness
incurred pursuant to this clause (iv), not to exceed $25.0 million at any
time outstanding;

     (v) the incurrence by the Company or any Restricted Subsidiary of
the Company of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of
which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted by this Indenture to
be incurred under Section 4.09(a) or clause (i), (ii), (iii), (iv), (v)
or (viii) of this Section 4.09(b);

     (vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness owing to and held by the
Company or any of its Restricted Subsidiaries; provided, however, that:

	(1)	 	if the Company or any Guarantor is the obligor on
such Indebtedness, such Indebtedness must be unsecured and
expressly subordinated to the prior payment in full in cash of
all Obligations with respect to the Notes, in the case of the
Company, or the Note Guarantee, in the case of a Guarantor;
and
	 
	(2)	 	(A) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by
a Person other than the Company or a Restricted Subsidiary
thereof and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a
Restricted Subsidiary thereof, shall be deemed, in each case,
to constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be,
that was not permitted by this clause (vi);

     (vii) the Guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.09; or

     (viii) the incurrence by the Company or any Restricted Subsidiary of
the Company of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (viii), not to
exceed $50.0 million.

          For purposes of determining compliance with this Section 4.09, in the
event that any proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in Sections 4.09(b)(i) through (viii)
above, or is entitled to be incurred pursuant to Section 4.09(a), the Company
shall be permitted to classify at the time of its incurrence (and, except as
provided in the following sentence, later reclassify) such item of Indebtedness
in any manner that complies with this Section 4.09. Indebtedness under Credit
Facilities outstanding on the date on which the Notes are first issued under
this Indenture shall be deemed to have been incurred on such date in reliance
on Section 4.09(b)(i).

          (c) Notwithstanding any other provision of this Section 4.09, the maximum
amount of Indebtedness that may be incurred pursuant to this Section 4.09 shall
not be deemed to

58

 

be exceeded, with respect to any outstanding Indebtedness due
solely to the result of fluctuations in the exchange rates of currencies.

Section 4.10. Asset Sales.

          (a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:

     (i) the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to
the Fair Market Value of the assets or Equity Interests issued or sold or
otherwise disposed of;

     (ii) a resolution of the Board of Directors of the Company or such
Restricted Subsidiary with respect to the determination of such Fair
Market Value is set forth in an Officers’ Certificate delivered to the
Trustee; and

     (iii) at least 75% of the consideration therefore received by the
Company or such Restricted Subsidiary is in the form of cash, Cash
Equivalents or Replacement Assets or a combination of the foregoing. For
purposes of this Section 4.10(a)(iii), each of the following shall be
deemed to be cash:

     (A) any liabilities (as shown on the Company’s or such
Restricted Subsidiary’s most recent balance sheet) of the Company
or any Restricted Subsidiary (other than contingent liabilities,
Indebtedness that is by its terms subordinated to the Notes or any
Note Guarantee and liabilities to the extent owed to the Company or
any Affiliate of the Company) that are assumed by the transferee of
any such assets pursuant to a customary written novation agreement
that releases the Company or such Restricted Subsidiary from
further liability; and

     (B) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are (subject to ordinary settlement periods) converted by the
Company or such Restricted Subsidiary into cash (to the extent of
the cash received in that conversion) within 120 days after such
Asset Sale.

          (b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or such Restricted Subsidiary may apply such Net Proceeds at
its option:

     (i) to repay Senior Debt of the Company or any Subsidiary Guarantor
and, if the Senior Debt repaid is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto;

     (ii) to repay Indebtedness of a Restricted Subsidiary that is not a
Subsidiary Guarantor; or

     (iii) to purchase Replacement Assets (or enter into binding
agreements to purchase such assets so long as such purchases are
consummated no later than 90 days

59

 

after the end of such 360-day period) or make a capital expenditure
in or that is used or useful in a Permitted Business.

Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture.

          (c) Any Net Proceeds from Asset Sales that are not applied or invested as
provided in Section 4.10(b) shall constitute “Excess Proceeds.” Within 30 days
after the aggregate amount of Excess Proceeds exceeds $20.0 million, the
Company shall make an offer (“Asset Sale Offer”) to all Holders of Notes and
all holders of other Indebtedness that is pari passu with the Notes or any Note
Guarantee containing provisions similar to those set forth in this Indenture
with respect to offers to purchase with the proceeds of sales of assets, to
purchase the maximum principal amount of Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer will be equal to 100% of the principal amount of the
Notes and such other pari passu Indebtedness plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes and
such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds
the amount of Excess Proceeds, the Notes and such other pari passu Indebtedness
shall be purchased on a pro rata basis based on the principal amount of Notes
and such other pari passu Indebtedness tendered. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.

          (d) The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
compliance.

Section 4.11. Transactions with Affiliates.

          (a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into, make, amend, renew or extend any transaction,
contract, agreement, understanding, loan, advance or Guarantee with, or for the
benefit of, any Affiliate (each, an “Affiliate Transaction”), unless:

     (i) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable arm’s-length transaction by
the Company or such Restricted Subsidiary with a Person that is not an
Affiliate of the Company; and

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     (ii) the Company delivers to the Trustee:

     (1) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, a resolution of the Board of Directors set
forth in an Officers’ Certificate certifying that such Affiliate
Transaction or series of related Affiliate Transactions complies
with this Section 4.11 and that such Affiliate Transaction or
series of related Affiliate Transactions has been approved by a
majority of the disinterested members of the Board of Directors;
and

     (2) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $25.0 million, an opinion as to the fairness to the
Company or such Restricted Subsidiary of such Affiliate Transaction
or series of related Affiliate Transactions from a financial point
of view issued by an independent accounting, appraisal or
investment banking firm of national standing.

          (b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a):

     (i) transactions between or among the Company and/or its Restricted
Subsidiaries;

     (ii) payment of reasonable and customary fees to, and reasonable and
customary indemnification and similar payments and reasonable
compensation and other employee benefits arrangements on behalf of,
directors, officers and employees of the Company and/or its Restricted
Subsidiaries;

     (iii) Restricted Payments that are permitted by the provisions of
Section 4.07;

     (iv) any sale of Capital Stock (other than Disqualified Stock) of
the Company and the granting of any registration rights in connection
therewith;

     (v) payments to Galen Advisors LLC in connection with the
Transactions, as described in the Offering Memorandum;

     (vi) any tax sharing agreement or arrangement and payments pursuant
thereto among the Company and its Subsidiaries and the Parent and any
other Person with which the Company or its Subsidiaries is required or
permitted to file a consolidated, combined or unitary tax return or with
which the Company or any of its Restricted Subsidiaries is or could be
part of a consolidated, combined or unitary group for tax purposes in
amounts not otherwise prohibited by this Indenture; provided that any
refunds received by any such other Person attributable to the Company or
any of its Subsidiaries shall promptly be returned by such other Person
to the Company through a capital contribution to, or the purchase of
Capital Stock (other than Disqualified Stock) of the Company from, the
Company;

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     (vii) loans and advances to officers and employees of the Company or
any of its Restricted Subsidiaries in an amount not to exceed $5.0
million; and

     (viii) transactions with a Person engaged in a Permitted Business;
provided that all the outstanding ownership interests of such Person are
owned only by the Company, its Restricted Subsidiaries and Persons who
are not Affiliates of the Company.

Section 4.12. Liens.

          The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind securing Indebtedness (other than
Permitted Liens) upon any of their property or assets, now owned or hereafter
acquired, unless all payments due under this Indenture and the Notes are
secured on an equal and ratable basis with the obligations so secured (or, in
the case of subordinated Indebtedness, prior or senior thereto, with the same
relative priority as the Notes shall have with respect to such subordinated
Indebtedness) until such time as such obligations are no longer secured by a
Lien.

Section 4.13. Business Activities.

          The Company shall not, and shall not permit any Restricted Subsidiary
thereof to, engage in any business other than Permitted Businesses, except to
such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.

Section 4.14. Offer to Repurchase upon a Change of Control.

          (a) If a Change of Control occurs, each Holder of Notes shall have the
right to require the Company to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of that Holder’s Notes pursuant to an offer by
the Company (a “Change of Control Offer”) on the terms set forth herein. The
Company will offer a payment in cash (a “Change of Control Payment”) equal to
101% of the aggregate principal amount of such repurchased Notes plus accrued
and unpaid interest and Liquidated Damages, if any, thereon, to the Change of
Control Payment Date. Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Notes on a date (the “Change of Control Payment Date”) specified in such
notice, which date shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed, pursuant to the procedures described in
Section 3.08 (including the notice required thereby). The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions
of this Indenture, the Company
shall comply with the applicable securities laws and regulations and will
not be deemed to have breached its obligations under the Change of Control
provisions of this Indenture by virtue of such compliance.

          (b) On the Change of Control Payment Date, the Company shall, to the
extent lawful:

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     (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;

     (ii) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so tendered;
and

     (iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers’ Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company.

          (c) The Paying Agent shall promptly mail or wire transfer to each Holder
of Notes so tendered the Change of Control Payment for such Notes, and the
Trustee shall promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note shall be in a principal amount of $1,000 or an integral multiple
thereof.

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

          (e) Prior to purchasing notes pursuant to the provisions of this Section
4.14, but in any event within 90 days following a Change of Control, the
Company shall either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of Notes required by this Section.

          (f) Notwithstanding anything to the contrary in this Section 4.14, the
Company 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 this
Section 4.14 and all other provisions of this Indenture applicable to a Change
of Control Offer made by the Company and purchases all Notes validly tendered
and not withdrawn under such Change of Control Offer.

Section 4.15. Limitation on Senior Subordinated Debt.

          The Company shall not incur any Indebtedness that is subordinate or junior
in right of payment to any Senior Debt of the Company unless it is pari passu
or subordinate in right of payment to the Notes to the same extent. No
Guarantor will incur any Indebtedness that is subordinate or junior in right of
payment to the Senior Debt of such Guarantor unless it is pari passu or
subordinate in right of payment to such Guarantor’s Note Guarantee to the same
extent. For purposes of the foregoing, no Indebtedness will be deemed to be
subordinated in right of
payment to any other Indebtedness of the Company or any Guarantor, as
applicable, solely by virtue of being unsecured or by virtue of the fact that
the holders of any secured Indebtedness have entered into intercreditor
agreements giving one or more of such holders priority over the other holders
in the collateral held by them.

Section 4.16. Designation of Restricted and Unrestricted Subsidiaries.

          (a) The Board of Directors of the Company may designate any Restricted
Subsidiary of the Company to be an Unrestricted Subsidiary; provided that:

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     (i) any Guarantee by the Company or any Restricted Subsidiary
thereof of any Indebtedness of the Subsidiary being so designated shall
be deemed to be an incurrence of Indebtedness by the Company or such
Restricted Subsidiary (or both, if applicable) at the time of such
designation, and such incurrence of Indebtedness would be permitted under
Section 4.09;

     (ii) the aggregate Fair Market Value of all outstanding Investments
owned by the Company and its Restricted Subsidiaries in the Subsidiary
being so designated (including any Guarantee by the Company or any
Restricted Subsidiary of any Indebtedness of such Subsidiary) shall be
deemed to be a Restricted Investment made as of the time of such
designation and such Investment would be permitted under Section 4.07;

     (iii) such Subsidiary does not own any Equity Interests of, or hold
any Liens on any property of, the Company or any Restricted Subsidiary
thereof;

     (iv) the Subsidiary being so designated:

     (1) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company
or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of the Company;

     (2) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect
obligation (A) to subscribe for additional Equity Interests or (B)
to maintain or preserve such Person’s financial condition or to
cause such Person to achieve any specified levels of operating
results; and

     (3) has not Guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any
of its Restricted Subsidiaries, except to the extent such Guarantee
or credit support would be released upon such designation; and

     (4) has at least one director on its Board of Directors that
is not a director or officer of the Company or any of its
Restricted Subsidiaries and has at least one executive officer that
is not a director or officer of the Company or any of its
Restricted Subsidiaries; and

     (v) no Default or Event of Default would be in existence following
such designation.

          (b) Any designation of a Restricted Subsidiary of the Company as an
Unrestricted Subsidiary 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

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preceding conditions and was
permitted by this Indenture. If, at any time, any Unrestricted Subsidiary (x)
would fail to meet any of the preceding requirements described in subclause
(1), (2) or (3) of clause (iv) above, or (y) fails to meet the requirement
described in subclause (4) of clause (iv) above and such failure continues for
a period of 30 days it shall thereafter cease to be an Unrestricted Subsidiary
for purposes of this Indenture and any Indebtedness, Investments, or Liens on
the property, of such Subsidiary shall be deemed to be incurred or made by a
Restricted Subsidiary of the Company as of such date and, if such Indebtedness,
Investments or Liens are not permitted to be incurred or made as of such date
under this Indenture, the Company shall be in default under this Indenture.

          (c) The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that:

     (i) such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall
only be permitted if such Indebtedness is permitted under Section 4.09
calculated on a pro forma basis as if such designation had occurred at
the beginning of the applicable four-quarter reference period;

     (ii) all outstanding Investments owned by such Unrestricted
Subsidiary shall be deemed to be made as of the time of such designation
and such Investments shall only be permitted if such Investments would be
permitted under Section 4.07;

     (iii) all Liens upon property or assets of such Unrestricted
Subsidiary existing at the time of such designation would be permitted
under Section 4.12; and

     (iv) no Default or Event of Default would be in existence following
such designation.

Section 4.17. Payments for Consent.

          The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the
terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid and is paid to all Holders of the Notes
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.

Section 4.18. Guarantees.

          (a) If the Company or any of its Restricted Subsidiaries acquires or
creates another Domestic Subsidiary on or after the Issue Date, then that newly
acquired or created Domestic Subsidiary must promptly become a Guarantor and
execute a supplemental indenture and deliver an Opinion of Counsel to the
Trustee. The Company shall not permit any of its Restricted Subsidiaries,
directly or indirectly, to Guarantee or pledge any assets to secure the payment
of any other Indebtedness of the Company or any Subsidiary Guarantor unless
such Restricted Subsidiary is a Guarantor or simultaneously executes and
delivers a supplemental indenture providing for the Guarantee of the payment of
the Notes by such Restricted Subsidiary,

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which Guarantee shall be senior to or
pari passu with such Subsidiary’s Guarantee of such other Indebtedness unless
such other Indebtedness is Senior Debt, in which case the Guarantee of the
Notes may be subordinated to the Guarantee of such Senior Debt to the same
extent as the Notes are subordinated to such Senior Debt. The form of the Note
Guarantee is attached as Exhibit E hereto and the form of the Supplemental
Indenture is attached as Exhibit F hereto.

          (b) Notwithstanding Section 4.18(a), any Note Guarantee may provide by its
terms that it will be automatically and unconditionally released and discharged
under the circumstances described under Section 10.05 hereof.

Section 4.19. Limitation on Issuances and Sales of Equity Interests in
Restricted Subsidiaries.

          The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, issue, transfer, convey, sell, lease or otherwise dispose of
any Equity Interests in any Restricted Subsidiary of the Company to any Person
(other than the Company or a Restricted Subsidiary of the Company or, if
necessary, shares of its Capital Stock constituting directors’ qualifying
shares or issuances of shares of Capital Stock of foreign Restricted
Subsidiaries to foreign nationals, to the extent required by applicable law),
except:

     (a) if, immediately after giving effect to such issuance, transfer,
conveyance, sale, lease or other disposition, such Restricted Subsidiary
would no longer constitute a Restricted Subsidiary and any Investment in
such Person remaining after giving effect to such issuance or sale would
have been permitted to be made under Section 4.07, including Investments
permitted as a Permitted Investment, if made on the date of such issuance
or sale and the cash Net Proceeds from such transfer, conveyance, sale,
lease or other disposition are applied in accordance with Section 4.10;
or

     (b) sales of (i) common stock of a Restricted Subsidiary by the
Company or a Restricted Subsidiary, or (ii) Disqualified Stock or
Preferred Stock of a Restricted Subsidiary by the Company or a Restricted
Subsidiary of the Company that are otherwise
permitted under Section 4.09; provided, in each case, that the
Company or such Restricted Subsidiary complies with Section 4.10.

ARTICLE FIVE

SUCCESSORS

Section 5.01. Merger, Consolidation or Sale of Assets.

          (a) The Company shall not, directly or indirectly: (1) consolidate or
merge with or into another Person (whether or not the Company is the surviving
corporation) or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties and assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person or Persons, unless:

     (i) either: (1) the Company is the surviving corporation; or (2) the
Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, conveyance
or other disposition shall have been made (A) is a corporation organized
or existing under the laws of the United States, any

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state thereof or the
District of Columbia and (B) assumes all the obligations of the Company
under the Notes, this Indenture and the Registration Rights Agreement
pursuant to agreements reasonably satisfactory to the Trustee;

     (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists;

     (iii) immediately after giving effect to such transaction on a pro
forma basis, the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, conveyance or other disposition shall have
been made, will, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in Section 4.09(a);

     (iv) each Guarantor, unless such Guarantor is the Person with which
the Company has entered into a transaction under this Section 5.01, shall
have by amendment to its Note Guarantee confirmed that its Note Guarantee
shall apply to the obligations of the Company or the surviving Person in
accordance with the Notes and this Indenture; and

     (v) the Company delivers to the Trustee an Officers’ Certificate
(attaching the arithmetic computation to demonstrate compliance with
Section 5.01(a)(iii)) and an Opinion of Counsel, in each case stating
that such transaction and such agreement complies with this covenant and
that all conditions precedent provided for herein relating to such
transaction have been complied with.

          (b) In addition, neither the Company nor any Restricted Subsidiary thereof
may, directly or indirectly, lease all or substantially all of its properties
or assets, in one or more related transactions, to any other Person. This
Section 5.01 covenant will not apply to the Transactions. Section 5.01(a)(iii)
shall not apply to any merger, consolidation or sale, assignment, transfer,
conveyance or other disposition of assets between or among the Company and any
of its Restricted Subsidiaries.

Section 5.02. Successor Corporation Substituted.

          Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, conveyance or other
disposition, the provisions of this Indenture referring to the “Company” shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein.

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ARTICLE SIX

DEFAULTS AND REMEDIES

Section 6.01. Events of Default.

          (a) Each of the following is an “Event of Default”:

     (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes whether or not prohibited
by the subordination provisions of this Indenture;

     (ii) default in payment when due (whether at maturity, upon
acceleration, redemption or otherwise) of the principal of, or premium,
if any, on the Notes, whether or not prohibited by Article Twelve of this
Indenture;

     (iii) failure by the Company or any of its Restricted Subsidiaries
to comply with Sections 4.10, 4.14, 5.01 or 10.04(a);

     (iv) failure by the Company or any of its Restricted Subsidiaries
for 60 days after written notice by the Trustee or Holders representing
25% or more of the aggregate principal amount of Notes outstanding to
comply with any of the other agreements in this Indenture;

     (v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is Guaranteed by the Company or any
of its Restricted Subsidiaries) whether such Indebtedness or Guarantee
now exists, or is created after the Issue Date, if that default:

     (A) is caused by a failure to make any payment when due at the
final maturity of such Indebtedness (a “Payment Default”); or

     (B) results in the acceleration of such Indebtedness prior to
its express maturity;

and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $15.0 million or more;

     (vi) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of $20.0 million (exclusive of
any portion of any such payment covered by insurance, if and to the
extent the insurer has acknowledged in writing its liability therefor),
which judgments are not paid, discharged or stayed for a period of 60
days;

     (vii) except as permitted by this Indenture, any Note Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be

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in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Note Guarantee;

     (viii) the Company, the Parent or any Significant Subsidiary of the
Company (or any Restricted Subsidiaries of the Company that together
would constitute a Significant Subsidiary of the Company) pursuant to or
within the meaning of Bankruptcy Law:

     (A) commences a voluntary case,

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

     (C) makes a general assignment for the benefit of its
creditors, or

     (D) generally is not paying its debts as they become due; and

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

     (A) is for relief against the Company, the Parent or any
Significant Subsidiary of the Company (or Restricted Subsidiaries
of the Company that together would constitute a Significant
Subsidiary of the Company), in an involuntary case; or

     (B) appoints a custodian of the Company, the Parent or any
Significant Subsidiary of the Company (or Restricted Subsidiaries
of the Company that together would constitute a Significant
Subsidiary of the Company) or for all or substantially all of the
property of the Company, the Parent or any Significant Subsidiary
of the Company (or Restricted Subsidiaries of the Company that
together would constitute a Significant Subsidiary of the Company);
or

     (C) orders the liquidation of the Company, the Parent or any
Significant Subsidiary of the Company (or Restricted Subsidiaries
of the Company that together would constitute a Significant
Subsidiary of the Company);

and the order or decree remains unstayed and in effect for 60 consecutive days.

Section 6.02. Acceleration.

          (a) In the case of an Event of Default specified in clause (viii) of
Section 6.01, with respect to the Company, the Parent, or any Significant
Subsidiary of the Company (or any Restricted Subsidiaries of the Company that
together would constitute a Significant Subsidiary of the Company), all
outstanding Notes will become due and payable immediately without further
action or notice. If any other Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately
by notice in writing to the Company specifying the Event of Default; provided,
however, that so long as any Indebtedness permitted to be incurred

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pursuant to
the Credit Agreement shall be outstanding, that acceleration shall not be
effective until the earlier of (1) an acceleration of Indebtedness under the
Credit Agreement; and (2) five Business Days after receipt by the Company and
the Agent under the Credit Agreement of written notice of the acceleration of
the Notes.

          (b) In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of the Company with the
intention of avoiding payment of the premium that the Company would have had to
pay if the Company then had elected to redeem the Notes pursuant to Section
3.07, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law upon the acceleration of the Notes. If
an Event of Default occurs during any time that the Notes are outstanding, by
reason of any willful action or inaction taken or not taken by or on behalf of
the Company with the intention of avoiding the prohibition on redemption of the
Notes, then the premium specified in Section 3.07 shall also become immediately
due and payable to the extent permitted by law upon the acceleration of the
Notes.

Section 6.03. Other Remedies.

          (a) If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, interest, and
Liquidated Damages, if any, with respect to, the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

          (b) The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.

Section 6.04. Waiver of Past Defaults.

          Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences
hereunder (including rescinding any related acceleration of the payment of the
Notes) except a continuing Default or Event of Default in the payment of
interest or Liquidated Damages on, or the principal of, the Notes.

          The Company shall deliver to the Trustee an Officers’ Certificate stating
that the requisite percentage of Holders have consented to such waiver and
attaching copies of such consents. In case of any such waiver, the Company,
the Trustee and the Holders shall be restored to their former positions and
rights hereunder and under the Notes, respectively. This Section 6.04 shall be
in lieu of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the
TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA. Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon

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Section 6.05. Control by Majority.

          The Holders of a majority in principal amount of the then outstanding
Notes will have the right to direct the time, method and place of conducting
any proceeding for exercising any remedy available to the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Notes not joining in the giving of such direction and may take any
other action it deems proper that is not inconsistent with any such direction
received from Holders of Notes.

Section 6.06. Limitation on Suits.

          (a) A Holder may not pursue any remedy with respect to this Indenture or
the Notes unless:

     (i) the Holder gives the Trustee written notice of a continuing
Event of Default;

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

     (iii) such Holder or Holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense;

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

     (v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the
Trustee a direction that is inconsistent with the request.

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

Section 6.07. Rights of Holders of Notes to Receive Payment.

          Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of the principal of, premium or Liquidated
Damages, if any, or interest on, such Note or to bring suit for the enforcement
of any such payment, on or after the due date expressed in the Notes, which
right shall not be impaired or affected without the consent of the Holder.

Section 6.08. Collection Suit by Trustee.

          If an Event of Default specified in Section 6.01(a)(i) or (a)(ii) occurs
and is continuing, the Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount of principal of, premium, if any, interest, and Liquidated Damages, if
any, remaining unpaid on the Notes and interest on overdue

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principal and
premium, if any, and, to the extent lawful, interest and Liquidated Damages, if
any, and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

Section 6.09. Trustee May File Proofs of Claim.

          The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including
any claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and the Holders of the Notes
allowed in any judicial proceedings relative to the Company or any Guarantor
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
securities or property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 7.07 out of the estate in any such proceeding shall be denied for any
reason, payment of the same shall be secured by a Lien on, and shall be paid
out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Holder, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.

Section 6.10. Priorities.

          (a) If the Trustee collects any money pursuant to this Article Six, it
shall pay out the money in the following order:

     First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;

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

     Third: to the Company or to such party as a court of competent
jurisdiction shall direct.

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          (b) The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.

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 a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than
ten percent in principal amount of the then outstanding Notes.

ARTICLE SEVEN

TRUSTEE

Section 7.01. Duties of Trustee.

          (a) If an Event of Default has occurred and is continuing, the Trustee
shall be required, in the exercise of its power vested in it by this Indenture,
and use the degree of care of a prudent person in the conduct of his or her own
affairs.

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

     (i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth (or incorporated by
reference) in this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and

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

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

     (i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;

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

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     (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.

          (d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section 7.01.

          (e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense that might be incurred by it in connection with the request or
direction.

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

          (g) In all cases, the duties and responsibilities of the Trustee shall be
as provided in the Trust Indenture Act of 1939 (as from time to time in
effect).

Section 7.02. Certain Rights of Trustee.

          (a) The Trustee may conclusively rely upon any document reasonably
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.

          (b) Before the Trustee acts or refrains from acting, it may require an
Officers’ Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers’ Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

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

          (d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.

          (e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.

          (f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee security or
indemnity reasonably satisfactory to it against any loss, liability or expense.

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          (g) The Trustee shall not be deemed to have notice of any Default or Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of such event is sent to the Trustee in
accordance with Section 12.03, and such notice references the Notes.

Section 7.03. Individual Rights of Trustee.

          The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may become a creditor of, or otherwise deal with, the
Company or any of its Affiliates with the same rights it would have if it were
not Trustee. However, in the event that the Trustee acquires any conflicting
interest as described in the Trust Indenture Act of 1939 (as in effect at such
time), it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11.

Section 7.04. Trustee’s Disclaimer.

          The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company’s use of the proceeds from the Notes or any money
paid to the Company or upon the Company’s direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes
or any other document in connection with the sale of the Notes or pursuant to
this Indenture other than its certificate of authentication.

Section 7.05. Notice of Defaults.

          If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default relating to the payment of principal or
interest or Liquidated Damages on any Note, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of
the Notes.

Section 7.06. Reports by Trustee to Holders of the Notes.

          (a) Within 60 days after each May 15 beginning with the May 15 following
the Issue Date, and for so long as Notes remain outstanding, the Trustee shall
mail to the Holders of the Notes a brief report dated as of such reporting date
that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted).
The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall
also transmit by mail all reports as required by TIA Section 313(c).

          
(b) A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the

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Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange or any delisting thereof.

Section 7.07. Compensation and Indemnity.

          (a) The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services provided
hereunder. The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee’s agents and counsel and any taxes
and other expenses incurred by a trust created pursuant to Section 8.04.

          (b) The Company and the Guarantors shall indemnify the Trustee and its
agents against any and all losses, liabilities or expenses incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company and the Guarantors (including this Section 7.07)
and defending itself against any claim (whether asserted by either of the
Company or any Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its
negligence, bad faith or willful misconduct. The Trustee shall notify the
Company and the Guarantors promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder unless the failure to notify the
Company impairs the Company’s ability to defend such claim. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld, conditioned or delayed.

          (c) The obligations of the Company and the Guarantors under this Section
7.07 shall survive the satisfaction and discharge of this Indenture and
resignation or removal of the Trustee.

          (d) To secure the Company’s and the Guarantors’ payment obligations in
this Section 7.07, the Trustee shall have a Lien prior to the Notes on all
money or property held or collected by the Trustee, except that such Lien shall
not apply to money and property held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of
this Indenture and resignation or removal of the Trustee.

          (e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(a)(viii) and (ix) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.

          (f) The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.

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Section 7.08. Replacement of Trustee.

          (a) A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 7.08.

          (b) The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:

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

     (ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;

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

     (iv) the Trustee becomes incapable of acting.

          (c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.

          (d) If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition at the expense of the Company any court of competent jurisdiction
for the appointment of a successor Trustee.

          (e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

          (f) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall
mail a notice of its succession to Holders. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
provided all sums owing to the Trustee hereunder have been paid and subject to
the Lien provided for in Section 7.07. Notwithstanding replacement of the
Trustee pursuant to this Section 7.08, the Company’s obligations under Section
7.07 shall continue for the benefit of the retiring Trustee.

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Section 7.09. Successor Trustee by Merger, Etc.

          If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another Person, the
successor Person without any further act shall be the successor Trustee.

Section 7.10. Eligibility; Disqualification.

          There shall at all times be a Trustee hereunder that is a corporation or
banking association organized and doing business under the laws of the United
States of America or of any state thereof that is authorized under such laws to
exercise corporate trust powers, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of
at least $50.0 million as set forth in its most recent published annual report
of condition.

          This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).

Section 7.11. Preferential Collection of Claims Against Company.

          The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
The Trustee hereby waives any right to set off any claim that it may have
against the Company in any capacity (other than as Trustee and Paying Agent)
against any of the assets of the Company held by the Trustee; provided,
however, that if the Trustee is or becomes a lender of any other Indebtedness
permitted hereunder to be pari passu with the Notes, then such waiver shall not
apply to the extent of such Indebtedness.

ARTICLE EIGHT

DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.

          The Company may, at the option of the Board of Directors evidenced by a
resolution set forth in an Officers’ Certificate, at any time, elect to have
either Section 8.02 or 8.03 be applied to all outstanding Notes upon compliance
with the conditions set forth below in this Article Eight.

Section 8.02. Legal Defeasance and Discharge.

          Upon the Company’s exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes and all
obligations of the Guarantors shall be deemed to have been discharged with
respect to their obligations under the Note Guarantees on the date the
conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).
For this purpose, Legal Defeasance means that the Company and the Guarantors
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Notes and Note Guarantees, respectively,

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which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05
and the other Sections of this Indenture referred to in (a) and (b) below, and
to have satisfied all its other obligations under such Notes and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a)
the rights of Holders of outstanding Notes to receive, payments in respect of
the principal of, premium from the trust referred to in Section 8.04, if any,
interest and Liquidated Damages, if any, on such Notes when such payments are
due, (b) the Company’s obligations pursuant to Sections 2.08, 2.11 and 4.02,
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and the Company’s and the Guarantors’ obligations in connection therewith and
(d) the provisions of this Article Eight related to Legal Defeasance. Subject
to compliance with this Article Eight, the Company may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.

Section 8.03. Covenant Defeasance.

          Upon the Company’s exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from their obligations under the covenants contained in Sections 4.03,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19,
5.01 and 10.04 with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, “Covenant
Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for
the purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed “outstanding” for all other purposes hereunder (it
being understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, the Company and the Guarantors may omit to comply with
and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01, but, except as
specified above, the remainder of this Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company’s exercise under Section
8.01 of the option applicable to this Section 8.03, subject to the satisfaction
of the conditions set forth in Section 8.04, Sections 6.01(a)(iii) through
(vii) shall not constitute Events of Default.

Section 8.04. Conditions to Legal or Covenant Defeasance.

          (a) The following shall be the conditions to the application of either
Section 8.02 or 8.03 to the outstanding Notes:

     (i) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, or
interest and premium and Liquidated Damages, if any, on the outstanding
Notes on the

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Stated Maturity or on the applicable redemption date, as the
case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;

     (ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to
the Trustee confirming that (1) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (2) since
the Issue Date, 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 of the outstanding
Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal 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 Legal Defeasance had not
occurred;

     (iii) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to
the Trustee confirming that the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;

     (iv) no Default or Event of Default shall have occurred and be
continuing either: (1) on the date of such deposit; or (2) insofar as
Events of Default from bankruptcy or insolvency events are concerned, at
any time in the period ending on the 123rd day after the date of deposit;

     (v) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under any material
agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound;

     (vi) the Company must have delivered to the Trustee an Opinion of
Counsel to the effect that (1) assuming no intervening bankruptcy of the
Company or any Guarantor between the date of deposit and the 123rd day
following the deposit and assuming that no Holder is an “insider” of the
Company under applicable bankruptcy law, after the 123rd day following
the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally, including Section 547 of the
United States Bankruptcy Code, and (2) the creation of the defeasance
trust does not violate the Investment Company Act of 1940;

     (vii) the Company must deliver to the Trustee an Officers’
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others;

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     (viii) if the Notes are to be redeemed prior to their Stated
Maturity, the Company must deliver to the Trustee irrevocable
instructions to redeem all of the Notes on the specified redemption date;
and

     (ix) the Company must deliver to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.

Section 8.05. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions.

          (a) Subject to Section 8.06, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee pursuant
to Section 8.04 in respect of the outstanding Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due thereon in respect
of principal, premium and Liquidated Damages, if any, and interest, but such
money need not be segregated from other funds except to the extent required by
law.

          (b) The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

          (c) Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a)), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06. Repayment to the Company.

          Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any,
interest, or Liquidated Damages, if any, on any Note and remaining unclaimed
for two years after such principal, and premium, if any, interest, or
Liquidated Damages, if any, has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Note shall thereafter look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
reasonable expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a

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date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.

Section 8.07. Reinstatement.

          If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02
or 8.03, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 and, in the case of a Legal Defeasance, the Guarantors’
obligations under their respective Note Guarantees shall be revised and
reinstated as though no deposit had occurred pursuant to Section 8.02, in each
case until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03, as the case may be;
provided, however, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.

ARTICLE NINE

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes.

          (a) Notwithstanding Section 9.02, the Company, the Guarantors, and the
Trustee may amend or supplement this Indenture, the Notes or the Note
Guarantees without the consent of any Holder of a Note:

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

     (ii) to provide for uncertificated Notes in addition to or in place
of certificated Notes;

     (iii) to provide for the assumption of the Parent’s, the Company’s
or any Guarantor’s obligations to Holders of Notes in the case of a
merger or consolidation or sale of all or substantially all of the
Parent’s, the Company’s or such Guarantor’s assets;

     (iv) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the
legal rights under this Indenture of any such Holder;

     (v) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust Indenture
Act of 1939;

     (vi) to comply with Section 4.18;

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     (vii) to evidence and provide for the acceptance of appointment by a
successor Trustee; or

     (viii) to provide for the issuance of Additional Notes in accordance
with this Indenture.

          (b) Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of any documents
requested under Section 7.02(b) hereof, the Trustee shall join with the Company
in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee
shall not be obligated to enter into such amended or supplemental Indenture
that affects its own rights, duties or immunities under this Indenture or
otherwise.

Section 9.02. With Consent of Holders of Notes.

          (a) Except as otherwise provided in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Notes or
the Notes Guarantees with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes), and, subject to Sections 6.04 and 6.07, any existing Default
or Event of Default or compliance with any provision of this Indenture or the
Notes or the Notes Guarantees may be waived with the consent of the Holders of
a majority in principal amount of the then outstanding Notes (including
Additional Notes, if any) (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes).

          (b) The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record
date, or its duly designated proxies, and only such Persons, shall be entitled
to consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder
be cancelled and of no further effect.

          (c) Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amendment or
supplement to this Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02(b), the Trustee shall join with the Company in the execution of
such amendment or supplement unless such amendment or supplement directly
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amendment or supplement.

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

          (e) After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver. Subject to Sections 6.04 and 6.07, the Holders of a majority in
aggregate principal amount of the then outstanding Notes (including Additional
Notes, if any) may waive compliance in a particular instance by the Company
with any provision of this Indenture, or the Notes. However, without the
consent of each Holder affected, an amendment or waiver under this Section 9.02
may not (with respect to any Notes held by a non-consenting Holder):

     (i) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;

     (ii) reduce the principal of or change the fixed maturity of any
Note or alter the provisions, or waive any payment, with respect to the
redemption of the Notes pursuant to Sections 4.10 and 4.14;

     (iii) reduce the rate of or change the time for payment of interest
on any Note;

     (iv) waive a Default or Event of Default in the payment of principal
of, or interest or premium, or Liquidated Damages, if any, on the Notes
(except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the Notes and a waiver
of the payment default that resulted from such acceleration);

     (v) make any Note payable in money other than U.S. dollars;

     (vi) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of, or interest or premium or Liquidated Damages,
if any, on the Notes;

     (vii) release any Guarantor from any of its obligations under its
Note Guarantee or this Indenture, except in accordance with the terms of
this Indenture;

     (viii) impair the right to institute suit for the enforcement of any
payment on or with respect to the Notes or the Note Guarantees;

     (ix) amend, change or modify the obligation of the Company to make
and consummate an Asset Sale Offer with respect to any Asset Sale in
accordance with Section 4.10 after the obligation to make such Asset Sale
Offer has arisen, or the obligation of the Company to make and consummate
a Change of Control Offer in the event of a Change of Control in
accordance with Section 4.14 after such Change of

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Control has occurred,
including, in each case, amending, changing or modifying any definition
relating thereto;

     (x) except as otherwise permitted under Section 4.18 and Section
5.01, consent to the assignment or transfer by the Company or any
Guarantor of any of their rights or obligations under this Indenture; or

     (xi) make any change in the preceding amendment and waiver
provisions.

          (f) Without the consent of the Holders of at least 75% of the principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes), an amendment or waiver may not amend or modify any of the
provisions of this Indenture or the related definitions affecting the
subordination or ranking of the Notes or any Note Guarantee in any manner
adverse to the holders of the Notes or any Note Guarantee.

Section 9.03. Compliance with Trust Indenture Act.

          Every amendment or supplement to this Indenture or the Notes shall be set
forth in a document that complies with the TIA as then in effect.

Section 9.04. Revocation and Effect of Consents.

          Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder’s Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.

Section 9.05. Notation on or Exchange of Notes.

          (a) The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.

          (b) Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.

Section 9.06. Trustee to Sign Amendments, Etc.

          The Trustee shall sign any amendment or supplement to this Indenture or
any Note authorized pursuant to this Article Nine if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or
supplemental Indenture or Note until its Board of Directors approves it. In

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executing any amendment or supplement or Note, the Trustee shall be entitled to
receive and (subject to Section 7.01) shall be fully protected in relying upon
an Officers’ Certificate and an Opinion of Counsel stating that the execution
of such amendment or supplement is authorized or permitted by this Indenture.

ARTICLE TEN

NOTE GUARANTEES

Section 10.01. Guarantee.

          (a) Subject to this Article Ten, each of the Guarantors hereby, jointly
and severally, and fully and unconditionally, as primary obligor and not merely
as surety, guarantees to each Holder of a Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns, irrespective of
the validity and enforceability of, this Indenture, the Notes or the
obligations of the Company hereunder or thereunder, that: (i) the principal
of, premium, if any, and interest and Liquidated Damages, if any, on the Notes
will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of, premium, if
any, and interest and Liquidated Damages, if any, on the Notes, if lawful
(subject in all cases to any applicable grace period provided herein), and all
other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full, all in accordance with the terms
hereof and thereof; and (ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, the same will be
promptly paid in full when due in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a guarantee of payment and not
a guarantee of collection.

          (b) The Guarantors hereby agree that, to the maximum extent permitted
under applicable law, their obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof,
the recovery of any judgment against the Company, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Subject to Section 6.06, each
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice
and all demands whatsoever and covenants that this Note Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes and this Indenture.

          (c) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to any of the Company or the
Guarantors, any amount paid by any of them to the Trustee or such Holder, this
Note Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect.

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          (d) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six for
the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article Six hereof, such obligations (whether
or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Note Guarantee. The Guarantors shall have
the right to seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Note Guarantee.

Section 10.02. Limitation on Guarantor Liability.

          Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee
of such Guarantor not constitute (i) a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to its Note Guarantee or (ii) an unlawful distribution under any
applicable state law prohibiting shareholder distributions by an insolvent
subsidiary to the extent applicable to its Note Guarantee. To effectuate the
foregoing intention, the Trustee, the Holders and the Guarantors hereby
irrevocably agree that the obligations of such Guarantor will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article Ten, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance or such an unlawful shareholder distribution.

Section 10.03. Execution and Delivery of Note Guarantee.

          (a) To evidence its Note Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form included in Exhibit E shall be endorsed by an Officer of such
Guarantor by manual or facsimile signature on each Note authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf of
such Guarantor by one of its Officers.

          (b) Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 10.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.

          (c) If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.

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          (d) The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set
forth in this Indenture on behalf of the Guarantors.

          (e) If required by Section 4.18, the Company shall cause such Subsidiaries
to execute supplemental indentures to this Indenture and Note Guarantees in
accordance with Section 4.18 and this Article Ten, to the extent applicable.

Section 10.04. Guarantors May Consolidate, Etc., on Certain Terms.

          (a) A Subsidiary Guarantor may not sell or otherwise dispose of all or
substantially all of its assets to, or consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person), another
Person, other than the Company or another Subsidiary Guarantor, unless:

     (i) immediately after giving effect to that transaction, no Default
or Event of Default exists; and

     (ii) either:

     (A) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such
consolidation or merger (if other than the Guarantor) is a
corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia and assumes
all the obligations of that Guarantor under this Indenture and its
Note Guarantee pursuant to a supplemental indenture and the
Registration Rights Agreement pursuant to a joinder agreement
reasonably satisfactory to the Trustee; or

     (B) such sale or other disposition or consolidation or merger
complies with Section 4.10.

          (b) In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all
of the covenants and conditions of this Indenture to be performed by a
Guarantor, such successor Person shall succeed to and be substituted for a
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Note Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
all of such Note Guarantees had been issued at the date of the execution
hereof.

          (c) Except as set forth in Article Five, and notwithstanding clauses (i)
and (ii) of Section 10.04(a), nothing contained in this Indenture or in any of
the Notes shall prevent any consolidation or merger of a Guarantor with or into
the Company or another Guarantor, or shall

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prevent any sale or conveyance of
the property of a Guarantor as an entirety or substantially as an entirety to
the Company or another Guarantor.

Section 10.05. Release of Guarantor.

          (a) Any Subsidiary Guarantor will be released of any obligations under its
Note Guarantee, (i) in connection with any sale or other disposition of all of
the Capital Stock of such Guarantor to a Person that is not (either before or
after giving effect to such transaction) an Affiliate of the Company, if the
sale of all such Capital Stock of that Guarantor complies with Section 4.10;
(ii) if the Company properly designates any Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary under this Indenture; or (iii) solely
in the case of a Note Guarantee created pursuant to Section 4.18(a), upon the
release or discharge of the Guarantee which resulted in the creation of such
Note Guarantee pursuant to Section 4.18(a), except a discharge or release by or
as a result of payment under such Note Guarantee. Upon delivery by the Company
to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the
effect that one of the foregoing requirements has been satisfied and the
conditions to the release of a Guarantor under this Section 10.05 have been
met, the Trustee shall execute any documents reasonably required in order to
evidence the release of such Guarantor from its obligations under its Note
Guarantee.

          (b) Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
and Liquidated Damages, if any, on the Notes and for the other obligations of
any Guarantor under this Indenture as provided in this Article Ten.

Section 10.06. Subordination of Note Guarantee.

          Payments under the Note Guarantees shall be subordinated to the prior
payment in full of all Senior Debt of such Guarantor, including Senior Debt
incurred after the Issue Date, on the same basis as the payments by the Company
on the Notes are subordinated to the prior payment in full of Senior Debt of
the Company. For the purposes of the foregoing sentence, the Trustee and the
Holders shall have the right to receive and/or retain payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article Twelve.

ARTICLE ELEVEN

SATISFACTION AND DISCHARGE

Section 11.01. Satisfaction and Discharge.

          (a) This Indenture shall be discharged and shall cease to be of further
effect as to all Notes issued hereunder, when:

     (i) either:

     (A) all Notes that have been authenticated (except lost,
stolen or destroyed Notes that have been replaced or paid and Notes
for whose payment

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money has theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered to the
Trustee for cancellation; or

     (B) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the making of
a notice of redemption or otherwise or will become due and payable
within one year and the Company or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders, cash in U.S.
dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge
the entire indebtedness on the Notes not delivered to the Trustee
for cancellation for principal, premium and Liquidated Damages, if
any, and accrued interest to the date of maturity or redemption;

     (ii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or
any Guarantor is a party or by which the Company or any Guarantor is
bound;

     (iii) the Company or any Guarantor has paid or caused to be paid all
sums payable by it under this Indenture; and

     (iv) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the case may
be.

          (b) In addition, the Company must deliver an Officers’ Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.

          (c) Notwithstanding the above, the Trustee shall pay to the Company from
time to time upon its request any cash or Government Securities held by it as
provided in this section which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification
delivered to the Trustee, are in excess of the amount thereof that would then
be required to be deposited to effect a satisfaction and discharge under this
Article Eleven.

          (d) After the conditions to discharge contained in this Article Eleven
have been satisfied, and the Company has paid or caused to be paid all other
sums payable hereunder by the Company, and delivered to the Trustee an
Officers’ Certificate and Opinion of Counsel, each stating that all conditions
precedent to satisfaction and discharge have been satisfied, the Trustee upon
written request shall acknowledge in writing the discharge of the obligations
of the Company and the Guarantors under this Indenture (except for those
surviving obligations specified in Section 11.04).

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Section 11.02. Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions.

          Subject to Section 11.03 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee pursuant
to Section 11.01 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium and Liquidated Damages, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.

Section 11.03. Repayment to the Company.

          Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium and
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, and premium or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times or The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining shall be repaid to the Company.

Section 11.04. Survival.

          In the event that the Company makes (or causes to be made) an irrevocable
deposit with the Trustee for the benefit of the Holders pursuant to Section
11.01(a)(i)(B) hereof, prior to the date of maturity or redemption, as the case
may be, the following provisions of this Indenture shall survive until
otherwise terminated or discharged hereunder:

     (1) the rights of Holders of outstanding Notes to receive payments
in respect of the principal of, premium, if any, interest and Liquidated
Damages, if any, on such Notes when such payments are due from the trust;

     (2) the Company’s obligations with respect to such Notes under
Article 2 and Section 4.02 hereof;

     (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company’s obligations in connection therewith; and

     (4) this Article 11.

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Section 11.05. Reinstatement.

          If the Trustee or Paying Agent is unable to apply any Government
Securities in accordance with Section 11.02 hereof, as the case may be, by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company’s obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 11.01(a)(2)
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 11.02 hereof; provided, however, that, if
the Company makes any payment of principal of, premium, if any, interest and
Liquidated Damages, if any, on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.

ARTICLE TWELVE

SUBORDINATION

Section 12.01. Agreement to Subordinate.

          The Company agrees, and each Holder by accepting a Note agrees, that the
payment of principal interest and premium and Liquidated Damages, if any, on
the Notes and any other Obligations under or relating to the Notes is
subordinated in right of payment, to the extent and in the manner provided in
this Article 12, to the prior payment in full in cash or Cash Equivalents of
all Senior Debt of the Company, including Senior Debt of the Company incurred
after the Issue Date.

Section 12.02. Liquidation; Dissolution; Bankruptcy.

          The holders of Senior Debt of the Company shall be entitled to receive
payment in full in cash or Cash Equivalents of all Obligations due in respect
of Senior Debt of the Company (including interest after the commencement of any
bankruptcy proceeding at the rate specified in the documentation for the
applicable Senior Debt of the Company, whether or not such interest is an
allowed claim under applicable law) before the Holders of Notes shall be
entitled to receive any payment with respect to the Notes (except that Holders
of Notes may receive and retain Permitted Junior Securities and payments made
from the trust pursuant to Article 8), in the event of any distribution to
creditors of the Company in connection with: (a) any liquidation or dissolution
of the Company; (b) any bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property; (c) any assignment
for the benefit of creditors; or (d) any marshaling of the Company’s assets and
liabilities.

Section 12.03. Default on Designated Senior Debt.

          The Company shall not make any payment in respect of the Notes (except in
Permitted Junior Securities or from the trust pursuant to Article 8) if:

     (a) a payment default on Designated Senior Debt of the Company
occurs and is continuing beyond any applicable grace period; or

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     (b) any other default (a “nonpayment default”) occurs and is
continuing on any series of Designated Senior Debt of the Company that
permits holders of that series of Designated Senior Debt of the Company
to accelerate its maturity and the Trustee receives a notice of such
default (a “Payment Blockage Notice”) from a representative of the
holders of such Designated Senior Debt.

     (c) Payments on the Notes may and shall be resumed:

     (i) in the case of a payment default on Designated Senior Debt
of the Company, upon the date on which such default is cured or
waived; and

     (ii) in case of a non-payment default on Designated Senior
Debt of the Company, the earlier of (x) the date on which such
default is cured or waived, (y) 179 days after the date on which
the applicable Payment Blockage Notice is received and (z) the date
the Trustee receives notice from the representative for such
Designated Senior Debt rescinding the Payment Blockage Notice,
unless the maturity of such Designated Senior Debt of the Company
has been accelerated.

     (d) No new Payment Blockage Notice may be delivered unless and
until:

     (i) 360 days have elapsed since the delivery of the
immediately prior Payment Blockage Notice; and

     (ii) all scheduled payments of principal, interest and premium
and Liquidated Damages, if any, on the Notes that have come due
have been paid in full in cash.

     (e) No non-payment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice unless
such default has been cured or waived for a period of not less than 90
days.

     (f) If the Trustee or any Holder of the Notes receives a payment in
respect of the Notes (except in Permitted Junior Securities or from the
trust described under Article 8) when (i) the payment is prohibited by
this Article Twelve and (ii) the Trustee or the Holder has actual
knowledge that the payment is prohibited; the Trustee or the Holder, as
the case may be, shall hold the payment in trust for the benefit of the
holders of Senior Debt of the Company or if there is any payment default
on any Designated Senior Debt, the Trustee or the Holder, as the case may be, shall deliver the
amounts in trust to the holders of Senior Debt of the Company or their
proper representative.

Section 12.04. Acceleration of Securities.

          If payment of the Notes is accelerated because of an Event of Default, the
Company and the Trustee shall promptly notify holders of Senior Debt of the
acceleration.

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Section 12.05. When Distribution Must Be Paid Over.

          In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes (except in Permitted Junior Securities or
from the trust pursuant to Article Eight hereof) at a time when the Trustee or
such Holder, as applicable, has actual knowledge that such payment is
prohibited by Article Twelve, such payment shall be held by the Trustee or such
Holder, as applicable, in trust for the benefit of, and shall be paid forthwith
over and delivered, upon written request, to the holders of Senior Debt as
their interests may appear or their Representative under this Indenture or
other agreement (if any) pursuant to which Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders
of Senior Debt.

          With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically
set forth in this Article Twelve, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall
be entitled by virtue of this Article Twelve, except if such payment is made as
a result of the willful misconduct or gross negligence of the Trustee.

Section 12.06. Notice by the Company.

          The Company shall promptly notify the Trustee and the Paying Agent in
writing of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article Twelve, but
failure to give such notice shall not affect the subordination of the Notes to
the Senior Debt as provided in this Article Twelve.

Section 12.07. Subrogation.

          After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of Notes shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to
the payment of Senior Debt. A distribution made under this Article Twelve to
holders of Senior Debt that otherwise would have been made to Holders of Notes
is not, as between the Company and Holders, a payment by the Company on the
Notes.

Section 12.08. Relative Rights.

          This Article Twelve defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:

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

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     (b) affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior
Debt; or

     (c) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.

          If the Company fails because of this Article Twelve to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.

Section 12.09. Subordination May Not Be Impaired by the Company.

          No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with 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 Debt, the distribution may be made and the notice given to their
Representative.

          Upon any payment or distribution of assets of the Company referred to in
this Article Twelve, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or upon any certificate
of such Representative or of the liquidating trustee or agent or other Person
making any distribution to the Trustee or to the Holders of Notes for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt 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
Twelve.

Section 12.11. Rights of Trustee and Paying Agent.

          Notwithstanding this Article Twelve or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment or distribution by the
Trustee, and the Trustee and the Paying Agent may continue to make payments on
the Notes, unless the Trustee shall have received at its Corporate Trust Office
at least five Business Days prior to the date of such payment written notice of
facts that would cause the payment of any Obligations with respect to the Notes
to violate this Article Twelve. Only the Company or a Representative may give
the notice. Nothing in this Article Twelve shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof.

          The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.

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Section 12.12. Authorization to Effect Subordination.

          Each Holder of Notes, by the Holder’s acceptance thereof, authorizes and
directs the Trustee on such Holder’s behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article Twelve, and appoints the Trustee to act as such Holder’s
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of
the time to file such claim, the lenders under the Credit Agreement are hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.

ARTICLE THIRTEEN

MISCELLANEOUS

Section 13.01. Trust Indenture Act Controls.

          This Indenture is subject to the provisions of the TIA that are required
to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any
TIA provision that may be so modified, such TIA provision shall be deemed to
apply to this Indenture as so modified. If any provision of this Indenture excludes any TIA provision that may be so excluded, such TIA
provision shall be excluded from this Indenture.

          If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties shall control.

Section 13.02. Notices.

          (a) Any notice or communication by the Company or any Guarantor, on the
one hand, or the Trustee on the other hand, to the other is duly given if in
writing and delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), telecopier or overnight air courier
guaranteeing next day delivery, to the other’s address:

If to the Company and/or any Guarantor:

c/o Encore Medical Corporation

9800 Metric Blvd.

Austin, TX 78758

Facsimile: (512) 834-6310

Attention: Chief Financial Officer

with a copy to:

Jackson Walker LLP

100 Congress Avenue, Suite 1100

Austin, TX 78701

Facsimile: (512) 236-2002

Attention: Lawrence A. Waks

96

 

If to the Trustee:

Wells Fargo Bank, N.A.

Corporate Trust Services

608 2nd Avenue South

N9303-120

Minneapolis, MN 55402

Facsimile: (612) 667-9825

Attention: Jeffery Rose

          (b) The Company, the Guarantors or the Trustee, by notice to the others
may designate additional or different addresses for subsequent notices or
communications.

          (c) All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; three Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery.

          (d) Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
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.

          (e) Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance on such waiver.

          (f) In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

          (g) If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.

          (h) If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.

Section 13.03. Communication by Holders of Notes with Other Holders of
Notes.

          Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company,
the Trustee, the Registrar and any other Person shall have the protection of
TIA Section 312(c).

97

 

     Section 13.04. Certificate and Opinion as to Conditions Precedent.

          Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:

     (i) an Officers’ Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied; and

     (ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of such counsel
(who may rely upon an Officers’ Certificate as to matters of fact), all
such conditions precedent and covenants have been satisfied.

Section 13.05. Statements Required in Certificate or Opinion.

          Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:

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

     (ii) 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;

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

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

Section 13.06. Rules by Trustee and Agents.

          The Trustee may make reasonable rules for actions taken by, or meetings or
consents of, Holders. The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.

Section 13.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.

          No director, officer, employee, incorporator, stockholder, manager, member
or partner of the Parent, the Company or any Guarantor, as such, shall have any
liability for any obligations of the Company or the Guarantors under the Notes,
this Indenture, the Note Guarantees, or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. This

98

 

waiver and
release are part of the consideration for issuance of the Notes and the Note
Guarantees. The waiver may not be effective to waive liabilities under the
federal securities laws.

Section 13.08. Governing Law.

          THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.

Section 13.09. Consent to Jurisdiction.

          Any legal suit, action or proceeding arising out of or based upon this
Indenture or the transactions contemplated hereby (“Related Proceedings”) may
be instituted in the federal courts of the United States of America located in
the City of New York or the courts of the State of New York in each case
located in the City of New York (collectively, the “Specified Courts”), and
each party irrevocably submits to the non-exclusive jurisdiction of such courts
in any such suit, action or proceeding. Service of any process, summons,
notice or document by mail (to the extent allowed under any applicable statute
or rule of court) to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in
any such court has been brought in an inconvenient forum.

Section 13.10. No Adverse Interpretation of Other Agreements.

          This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or any of its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

Section 13.11. Successors.

          All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of each Guarantor in this Indenture shall bind such
Guarantor’s successors, except as otherwise provided in Section 10.04.

Section 13.12. Severability.

          In case any provision in this Indenture or the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

Section 13.13. Counterpart Originals.

          The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.

99

 

Section 13.14. Acts of Holders.

          (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by the Holders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by agents duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Trustee and the Company if made
in the manner provided in this Section 13.14.

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

          (c) Notwithstanding anything to the contrary contained in this Section
13.14, the principal amount and serial numbers of Notes held by any Holder, and
the date of holding the same, shall be proved by the register of the Notes
maintained by the Registrar as provided in Section 2.04.

          (d) If the Company shall solicit from the Holders of the Notes any
request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to a resolution of its
Board of Directors, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other Act, but the Company shall have no obligation
to do so. Notwithstanding TIA Section 316(c), such record date shall be the
record date specified in or pursuant to such resolution, which shall be a date
not earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith or the date of the most recent list of
Holders forwarded to the Trustee prior to such solicitation pursuant to Section
2.06 and not later than the date such solicitation is completed. If such a
record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of the then
outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the then outstanding Notes shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective

100

 

unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after
the record date.

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

          (f) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Note may do so itself with
regard to all or any part of the principal amount of such Note or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.

Section 13.15. Benefit of Indenture.

          Nothing in this Indenture, the Notes or the Note Guarantees, express or
implied, shall give to any Person, other than the parties hereto, any Paying
Agent, any Registrar and its successors hereunder, and the Holders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.

Section 13.16. Table of Contents, Headings, Etc.

          The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.

[SIGNATURE PAGES FOLLOW]

101

 

          IN WITNESS WHEREOF, the parties have executed this Indenture as of
October 4, 2004.

	 	 	 	 	 
	 	 	ENCORE MEDICAL IHC, INC.
	 
	 	 	 	 
	 	 	By:   /s/
Harry L. Zimmerman
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
	

	 	 	 	Title:    Executive Vice
President-General Counsel
	 
	 	 	 	 
	 	 	ENCORE MEDICAL CORPORATION
	 
	 	 	 	 
	 	 	By:  /s/
Harry L. Zimmerman
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
	

	 	 	 	Title:    Executive
Vice President-General Counsel
	 
	 	 	 	 
	 	 	ENCORE MEDICAL L.P.
	 
	 	 	 	 
	 	 	By:
Encore Medical GP, Inc., its General Partner

	 	 	 	 	 
	 	 	By:   /s/
Harry L. Zimmerman
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
	

	 	 	 	Title:    Executive Vice
President-General Counsel

	 	 	 	 	 
	 	 	ENCORE MEDICAL ASSET CORPORATION
	 
	 	 	 	 
	 	 	By:  /s/
Harry L. Zimmerman
	

	 	 	 	

	

	 	 	 	Name:    Harry
L. Zimmerman
	

	 	 	 	Title:      Executive
Vice President-General Counsel

S-1

 

	 	 	 	 	 
	 	 	ENCORE MEDICAL GP, INC.
	 
	 	 	 	 
	 	 	By: /s/
Harry L. Zimmerman
	

	 	 	 	

	

	 	 	 	Name:  Harry
L. Zimmerman
	

	 	 	 	Title:    Executive
Vice President-General Counsel
	 
	 	 	 	 
	 	 	ENCORE MEDICAL PARTNERS, INC.
	 
	 	 	 	 
	 	 	By:  /s/
Harry L. Zimmerman
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
	

	 	 	 	Title:    Executive
Vice President-General Counsel
	 
	 	 	 	 
	 	 	EMPI, INC.
	 
	 	 	 	 
	 	 	By:  /s/
Harry L. Zimmerman
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
	

	 	 	 	Title:    Executive
Vice President-General Counsel
	 
	 	 	 	 
	 	 	EMPI CORP.
	 
	 	 	 	 
	 	 	By:  /s/
Harry L. Zimmerman
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
	

	 	 	 	Title:    Executive
Vice President-General Counsel
	 
	 	 	 	 
	 	 	EMPI SALES CORP.
	 
	 	 	 	 
	 	 	By:  /s/
Harry L. Zimmerman
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
	

	 	 	 	Title:    Executive
Vice President-General Counsel

S-2

 

	 	 	 	 	 
	 	 	WELLS FARGO BANK, N.A.
	 
	 	 	 	 
	 	 	By:  /s/
Jeffery Rose
	

	 	 	 	

	

	 	 	 	Name:  Jeffery Rose
	

	 	 	 	Title:    Corporate
Trust Officer

S-3

 

EXHIBIT A

[Face of Note]

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.

THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR THE GUARANTEES ENDORSED HEREON NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND
THE GUARANTEES ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE
GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE
PARENT, THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(i) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40 DAY DISTRIBUTION
COMPLIANCE PERIOD WITHIN

A-1

 

THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E)
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

[Additional language for Regulation S Note to be inserted after paragraph 1]

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

A-2

 

	 	 	 	 
	

	 	CUSIP
	 
	 	 	 
	No.

	**$	 	**
	 
	 	
 	 

ENCORE MEDICAL IHC, INC.

9.750% SENIOR SUBORDINATED NOTES DUE 2012

Issue Date:

          Encore Medical IHC, Inc., a Delaware corporation (the “Company,” which
term includes any successor under the Indenture hereinafter referred to), for
value received, promises to pay to CEDE & CO., or its registered assigns, the
principal sum of
$[          ] on October 1, 2012.

Interest Payment Dates: April 1 and October 1, commencing April 1, 2005.

Record Dates: March 15 and September 15.

          Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

[Attach Notation of Guarantee for each Guarantor]

A-3

 

          IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officer.

	 	 	 	 	 
	 	 	ENCORE MEDICAL IHC, INC.
	 
	 	 	 	 
	

	 	By:
	 	

	

	 	 	 	Name:
	

	 	 	 	Title:

A-4

 

(Trustee’s Certificate of Authentication)

This is one of the 9.750% Senior Subordinated Notes due 2012 described in the
within-mentioned Indenture.

	 	 	 	 	 
	Dated: 

	

	,	

	 

WELLS FARGO BANK, N.A.,

as Trustee

	 	 	 
	By:

	 	

Authorized Signatory

A-5

 

[Reverse Side of Note]

ENCORE MEDICAL IHC, INC.

9.750% Senior Subordinated Notes due 2012

          Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.

          1. Interest. The Company promises to pay interest on the principal amount
of this Note at 9.750% per annum from the date hereof until maturity and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company shall pay
interest and Liquidated Damages, if any, semi-annually in arrears on April 1
and October 1 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day each an Interest Payment Date. Interest on the
Notes shall accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from the date of original issuance; provided
that if there is no existing Default in the payment of interest, and if this
Note is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided further that the first Interest
Payment Date shall be April 1, 2005. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal from time to time on demand at a rate that is 1% per annum in excess
of the rate then in effect; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.

          2. Method of Payment. The Company shall pay interest on the Notes (except
defaulted interest) and Liquidated Damages, if any, to the Persons who are
registered Holders of Notes at the close of business on the record date
immediately preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.13 of the Indenture with respect to defaulted
interest. If a Holder has given wire transfer instructions to the Company, the
Company shall pay all principal, interest and premium and Liquidated Damages,
if any, on that Holder’s Notes in accordance with those instructions. All
other payments on Notes shall be made at the office or agency of the Paying
Agent and Registrar within the City and State of New York unless the Company
elects to make interest payments by check mailed to the Holders at their
addresses set forth in the register of Holders. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.

          3. Paying Agent and Registrar. Initially, the Trustee under the Indenture
shall act as Paying Agent and Registrar. The Company may change any Paying
Agent or Registrar without prior notice to any Holder. The Company or any of
its Subsidiaries may act in any such capacity.

A-6

 

          4. Indenture. The Company issued the Notes under an Indenture dated as of
October 4, 2004 among the Company, the Guarantors and the Trustee. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended. The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of
this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling. The Indenture
pursuant to which this Note is issued provides that an unlimited aggregate
principal amount of Additional Notes may be issued thereunder.

          5. Optional Redemption. (a) Except as set forth in paragraph 5(b) below,
the Company shall not have the option to redeem the Notes prior to October 1
2008. On or after October 1, 2008 the Company may redeem all or part of the
Notes upon not less than 30 days nor more than 60 days notice, at the
redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest and Liquidated Damages, if any, thereon
to the applicable redemption date, if redeemed during the twelve-month period
beginning on October 1 of the years indicated below:

	 	 	 	 	 
	Year	 	Percentage
	2008
	 	 	104.875	%
	2009
	 	 	102.438	%
	2010 and thereafter
	 	 	100.000	%

          (b) At any time prior to October 1, 2007, the Company may redeem up to 35%
of the aggregate principal amount of Notes issued under the Indenture
(including any Additional Notes) at a redemption price of 109.750% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the redemption date, with the net cash proceeds of
one or more Equity Offerings of the Company (or of the Parent to the extent
such proceeds are contributed to the common equity of the Company); provided
that (1) at least 65% of the aggregate principal amount of Notes issued under
the Indenture (including any Additional Notes) remains outstanding immediately
after the occurrence of such redemption, (excluding Notes held by the Parent
and its Subsidiaries); and (2) the redemption must occur within 60 days of the
date of the closing of such Equity Offering.

          6. Repurchase at Option of Holder. (a) If a Change of Control occurs,
each Holder of Notes shall have the right to require the Company to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of that
Holder’s Notes pursuant to a Change of Control Offer. In the Change of Control
Offer the Company will offer a Change of Control Payment in cash equal to 101%
of the aggregate principal amount of Notes repurchased plus accrued and unpaid
interest and Liquidated Damages, if any, thereon, to the Change of Control
Payment Date. Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes on the Change
of Control Payment Date specified in such notice, which shall be no earlier
than 30 days and no later than 60 days from the date such notice is mailed,
pursuant to the procedures required by the Indenture and described in such
notice.

A-7

 

          (b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or Restricted Subsidiary of the Company, as applicable, may
apply such Net Proceeds at its option: (1) to repay Senior Debt of the Company
or any Subsidiary Guarantor and, if the Senior Debt repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect thereto; (2)
to repay Indebtedness of a Restricted Subsidiary that is not a Subsidiary
Guarantor; (3) to purchase Replacement Assets (or enter into binding agreements
to purchase such assets so long as such purchases are consummated no later than
90 days after the end of such 360-day period) or make a capital expenditure in
or that is used or useful in a Permitted Business. Pending the final
application of any such Net Proceeds, the Company may temporarily reduce
revolving credit borrowings or otherwise invest such Net Proceeds in any manner
that is not prohibited by the Indenture.

          Within 30 days after the aggregate amount of Excess Proceeds exceeds $20.0
million, the Company shall make an Asset Sale Offer to all Holders of Notes and
all holders of other Indebtedness that is pari passu with the Notes or any Note
Guarantee containing provisions similar to those set forth in the Indenture
with respect to offers to purchase with the proceeds of sales of assets, to
purchase the maximum principal amount of Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer will be equal to 100% of the principal amount of the
Notes and such other pari passu Indebtedness plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes and
such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds
the amount of Excess Proceeds, the Notes and such other pari passu Indebtedness
shall be purchased on a pro rata basis based on the principal amount of Notes
and such other pari passu Indebtedness tendered. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.

          7. Denominations, Transfer, Exchange. The Notes are in registered form
without interest coupons in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The transfer of Notes may be registered
and Notes may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Company
is not required to transfer or exchange any Note selected for redemption. Also,
the Company is not required to (1) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under Section 3.02
under the Indenture and ending at the close of business on the day of
selection, (2) to register the transfer of or to exchange any Note so selected
for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part, (3) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment date or (4) to
register the transfer of or to exchange a Note tendered and not withdrawn in
connection with a Change of Control Offer or an Asset Sale Offer. Transfer may
be restricted as provided in the Indenture.

          8. Persons Deemed Owners. The registered Holder of a Note will be treated
as its owner for all purposes.

A-8

 

          9. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Notes), and any
existing default or compliance with any provision of the Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes (including, without limitation, consents obtained
in connection with a purchase of, or tender offer or exchange offer for,
Notes). Without the consent of any Holder of a Note, the Indenture or the
Notes may be amended or supplemented to, among other things, cure any
ambiguity, defect or inconsistency, or make any change that does not adversely
affect the legal rights under the Indenture of any such Holder.

          10. Defaults and Remedies. In the case of an Event of Default arising
from events of bankruptcy or insolvency specified in clause (viii) or (ix) of
Section 6.01(a) of the Indenture, with respect to the Company, the Parent or
any Significant Subsidiary of the Company (or any Restricted Subsidiaries that
together would constitute a Significant Subsidiary of the Company), all
outstanding Notes will become due and payable immediately without further
action or notice. If any other Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately
by notice in writing to the Company specifying the Event of Default; provided,
however, that so long as any Indebtedness permitted to be incurred pursuant to
the Credit Agreement shall be outstanding, that acceleration shall not be
effective until the earlier of (1) an acceleration of Indebtedness under the
Credit Agreement; and (2) five Business Days after receipt by the Company and
the agent under the Credit Agreement of written notice of the acceleration of
the Notes. Holders of the Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations, Holders
of a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest or
Liquidated Damages) if it determines that withholding the notice is in the
interests of the Holders of the Notes. The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event
of Default and its consequences under the Indenture (including rescinding any
related acceleration of the payment of the Notes), except a continuing Default
or Event of Default in the payment of interest or Liquidated Damages on, or the
principal of, the Notes. The Holders of a majority in principal amount of the
then outstanding Notes will have the right to direct the time, method and place
of conducting any proceeding for exercising any remedy available to the
Trustee. However, the Trustee may refuse to follow any direction that conflicts
with law or the Indenture, that may involve the Trustee in personal liability,
or that the Trustee determines in good faith may be unduly prejudicial to the
rights of Holders of Notes not joining in the giving of such direction and may
take any other action it deems proper that is not inconsistent with any such
direction received from Holders of Notes.

          11. Trustee Dealings with Company. The Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and may become a
creditor of, or otherwise deal with the Company or any of its Affiliates, with
the same rights it would have if it were not Trustee.

A-9

 

          12. No Recourse Against Others. No director, officer, employee,
incorporator or stockholder of the Parent, the Company or any Guarantor, as
such, shall have any liability for any obligations of the Company or the
Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such
liability. This waiver and release are part of the consideration for issuance
of the Notes. The waiver may not be effective to waive liabilities under the
federal securities laws.

          13. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee.

          14. Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders under the
Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes
shall have all the rights set forth in the Registration Rights Agreement.

          15. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

          16. Guarantee. The Company’s obligations under the Notes are fully and
unconditionally guaranteed, jointly and severally, by the Guarantors, as
primary obligor and not merely as surety.

          17. Copies of Documents. The Company shall furnish to any Holder upon
written request and without charge a copy of the Indenture and/or the
Registration Rights Agreement. Requests may be made to:

          Encore Medical IHC, Inc.

          9800 Metric Blvd.

          Austin, TX 78758

          Attention: Chief Financial Officer

          18. Subordination. The Notes are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture.

A-10

 

Assignment Form

          To assign this Note, fill in the form below:

		
	(I) or (we) assign and transfer this Note to: 	

(Insert assignee’s legal name)

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

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

		
	and irrevocably appoint 	
 

to transfer this Note on the books of the Company. The agent may substitute
another to act for him.

			
	Date:  	

	 

	 	 	 	 	 
	

	 	Your Signature:	 	 
	

	 	 	 	

	

	 	 	 	(Sign exactly as your name appears on the face of this Note)
	 
	 	 	 	 

			
	Signature Guarantee*: 	

	 

* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).

A-11

 

OPTION OF HOLDER TO ELECT PURCHASE

          If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.14 of the Indenture, check the appropriate box below:

o   Section 4.10          o  Section 4.14

          If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:

			
	$ 	

	 

			
	Date:  	

	 

	 	 	 	 	 	 
	 	Your Signature:	 	

	 	 	 	(Sign exactly as your name appears on the face of this Note)
	 	Tax Identification No.:	 	

			
	Signature Guarantee*:  	

	 

	*	 	Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

A-12

 

[To be inserted for Rule 144A Global Note]

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

          The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal Amount at	 	 
	 	 	Amount of Decrease in	 	Amount of Increase in	 	Maturity	 	Signature of
	 	 	Principal Amount at	 	Principal Amount at	 	of this Global Note	 	Authorized Officer
	 	 	Maturity	 	Maturity	 	Following such	 	of Trustee or
	Date of
Exchange
	 	of this Global Note
	 	of this Global Note
	 	decrease (or increase)
	 	Custodian

	 
	 	 	 	 	 	 	 	 

[To be inserted for Regulation S Global Note]

SCHEDULE OF EXCHANGES OF REGULATION S GLOBAL NOTE

          The following exchanges of a part of this Regulation S Global Note for an
interest in another Global Note or of other Restricted Global Notes for an
interest in this Regulation S Global Note, have been made:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal Amount at	 	 
	 	 	Amount of Decrease in	 	Amount of Increase in	 	Maturity	 	Signature of
	 	 	Principal Amount at	 	Principal Amount at	 	of this Global Note	 	Authorized Officer
	 	 	Maturity	 	Maturity	 	Following such	 	of Trustee or
	Date of Exchange
	 	of this Global Note
	 	of this Global Note
	 	decrease (or increase)
	 	Custodian

	 
	 	 	 	 	 	 	 	 

A-13

 

EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

Encore Medical IHC, Inc.

9800 Metric Blvd.

Austin, TX 78758

Attention: Chief Financial Officer

Wells Fargo Bank, N.A.

608 2nd Ave. South

Minneapolis, MN 55402

Attention: Corporate Trust Administration

          Re: 9.750% Senior Subordinated Notes due 2012

          Reference is hereby made to the Indenture, dated as of October 1, 2004
(the “Indenture”), among Encore Medical IHC, Inc., a Delaware corporation (the
“Company”), the Guarantors named therein, and Wells Fargo Bank, N.A., a
nationally chartered banking association, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.

           
                                      (the “Transferor”) owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount at maturity of $         
                          in such Note[s] or interests (the
“Transfer”), to          
                              (the “Transferee”), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:

[CHECK ALL THAT APPLY]

     o 1. Check if Transferee will take delivery of a beneficial interest in the
144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believed and believes is purchasing the beneficial interest or Definitive Note
for its own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion, and such Person and each such
account is a “qualified institutional buyer” within the meaning of Rule 144A in
a transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.

     o 2. Check if Transferee will take delivery of a beneficial interest in a
Legended Regulation S Global Note, or a Definitive Note pursuant to Regulation
S. The

B-1

 

Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) the transfer is not being made to a U.S. Person or for
the account or benefit of a U.S. Person (other than an Initial Purchaser).
Upon consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Legended Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.

     o 3. Check and complete if Transferee will take delivery of a Restricted
Definitive Note pursuant to any provision of the Securities Act other than Rule
144, Rule 144A or Regulation S. The Transfer is being effected in compliance
with the transfer restrictions applicable to beneficial interests in Restricted
Global Notes and Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act and any applicable blue sky securities laws of any
state of the United States, and accordingly the Transferor hereby further
certifies that (check one):

     o (a) such Transfer is being effected to the Parent, the Company or a
subsidiary thereof; or

     o (b) such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to Restricted Definitive
Notes and the requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in the form of
Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred Definitive Note will be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Definitive Notes and in the Indenture and the Securities Act.

          4. Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.

     o (a) Check if Transfer is Pursuant to Rule 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance

B-2

 

with the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any state of the United States and (ii)
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.

     o (b) Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any state of
the United States and, in the case of a transfer from a Restricted Global Note
or a Restricted Definitive Note, the Transferor hereby further certifies that
(a) the Transfer is not being made to a person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the
United States, (b) no directed selling efforts have been made in contravention
of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the
Securities Act, (c) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act and (d) the transfer is not
being made to a U.S. Person or for the account or benefit of a U.S. Person, and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.

     o (c) Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is
being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903
or Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.

B-3

 

          This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

	 	 	 	 	 
	

	 	Dated:
	 	

	 
	 	 	 	 
	

	 	

	

	 	 	 	[Insert Name of Transferor]

	 	 	 	 	 
	

	 	By:
	 	

	

	 	 	 	Name:
	

	 	 	 	Title:

B-4

 

ANNEX A TO CERTIFICATE OF TRANSFER

	1.	 	The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

	 	 	 	 	 	 	 	 	 
	o

	 	(a)
	 	a beneficial interest in the:
	

	 	(i)
	 	144A Global Note (CUSIP                   ); or
	

	 	(ii)
	 	Regulation S Global Note (CUSIP                    ); or
	o

	 	(b)
	 	a Restricted Definitive Note.

	2.	 	After the Transfer the Transferee will hold:

[CHECK ONE]

	 	 	 	 	 	 	 	 	 
	o

	 	(a)
	 	a beneficial interest in the:
	

	 	(i)
	 	144A Global Note (CUSIP                   ); or
	

	 	(ii)
	 	Regulation S Global Note (CUSIP                    ); or
	

	 	(iii)
	 	Unrestricted Global Note (CUSIP                    ); or
	o

	 	(b)
	 	a Restricted Definitive Note; or
	o

	 	(c)
	 	an Unrestricted Definitive Note,

in accordance with the terms of the Indenture.

B-5

 

EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

Encore Medical IHC, Inc.

9800 Metric Blvd.

Austin, TX 78758

Attention: Chief Financial Officer

Wells Fargo Bank, N.A.

608 2nd Ave. South

Minneapolis, MN 55402

Attention: Corporate Trust Administration

          Re: 9.750% Senior Subordinated Notes due 2012

     Reference is hereby made to the Indenture, dated as of October 4, 2004
(the “Indenture”), among Encore Medical IHC, Inc., a Delaware corporation (the
“Company”), the Guarantors named therein and Wells Fargo Bank, N.A., a
nationally chartered banking association, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.

                                            (the “Owner”) owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount
at maturity of $                    in such Note[s] or interests (the “Exchange”). In
connection with the Exchange, the Owner hereby certifies that:

          1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note

     o (a) Check if Exchange is from beneficial interest in a Restricted Global
Note to beneficial interest in an Unrestricted Global Note. In connection with
the Exchange of the Owner’s beneficial interest in a Restricted Global Note for
a beneficial interest in an Unrestricted Global Note in an equal principal
amount at maturity, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to
the Global Notes and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the “Securities Act”), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any
state of the United States.

     o (b) Check if Exchange is from beneficial interest in a Restricted Global
Note to Unrestricted Definitive Note. In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner’s own account without transfer,

C-1

 

(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Definitive
Note is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.

     o (c) Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner’s
Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner’s own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.

     o (d) Check if Exchange is from Restricted Definitive Note to Unrestricted
Definitive Note. In connection with the Owner’s Exchange of a Restricted
Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Unrestricted Definitive Note is being acquired for the Owner’s own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.

     2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes

     o (a) Check if Exchange is from beneficial interest in a Restricted Global
Note to Restricted Definitive Note. In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount at maturity, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner’s
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Definitive Note and
in the Indenture and the Securities Act.

     o (b) Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
:

          o 144A Global Note,

C-2

 

          o Regulation S Global Note,

with an equal principal amount at maturity, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.

          This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.

	 	 	 	 	 
	

	 	Dated:
	

	 
	 	 	 	 
	

	 	

	

	 	 	 	[Insert Name of Transferor]
	 
	 	 	 	 
	

	 	By:
	

	

	 	 	Name:	 
	

	 	 	Title:	 

C-3

 

EXHIBIT D

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

Encore Medical IHC, Inc.

9800 Metric Blvd.

Austin, TX 78758

Attention: Chief Financial Officer

Wells Fargo Bank, N.A.

608 2nd Ave. South

Minneapolis, MN 55402

Attention: Corporate Trust Administration

          Re: 9.750% Senior Subordinated Notes due 2012

          Reference is hereby made to the Indenture, dated as of October 4, 2004
(the “Indenture”), among Encore Medical IHC, Inc., a Delaware corporation (the
“Company”), the Guarantors named therein and Wells Fargo Bank, N.A., a
nationally chartered banking association, as trustee (the “Trustee”).
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.

          In connection with our proposed purchase of $                   aggregate
principal amount of:

          (a)   o beneficial interest in a Global Note, or

          (b)  o a Definitive Note,

          we confirm that:

          1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the “Securities Act”).

          2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which
we are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we shall do so only (A) to the Parent, the Company or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act
to a “qualified institutional buyer” (as defined therein), (C) to an
institutional “accredited investor” (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-

D-1

 

dealer) to you and to the Company a signed letter substantially in the
form of this letter and an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Note or beneficial interest in a Global Note
from us in a transaction meeting the requirements of clauses (A) through (E) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.

          3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.

          4. We are an institutional “accredited investor” (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and 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 Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.

          5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional “accredited investor”) as to each of which we exercise sole
investment discretion.

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

	 	 	 
	Dated:                                                         

	 	                                                                                               

[Insert Name of Accredited Investor]
	 
	

	 	By:                                                                                               
	

	 	      Name:
	

	 	      Title:

D-2

 

EXHIBIT E

FORM OF NOTATION OF GUARANTEE

          Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.

          For value received, each undersigned Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in and subject to the
provisions in the Indenture dated as of October 4, 2004 (the “Indenture”) among
Encore Medical IHC, Inc., a Delaware corporation, the Guarantors named therein
and Wells Fargo Bank, N.A., a nationally chartered banking association, as
trustee (the “Trustee”), (a) the due and punctual payment of the principal of,
premium, if any, and interest and Liquidated Damages, if any, on the Notes,
whether at maturity, by acceleration, redemption or otherwise, and the due and
punctual payment of interest on overdue principal, premium, if any, and
interest and Liquidated Damages, if any, on the Notes, if lawful (subject in
all cases to any applicable grace periods provided in the Indenture and the
Notes), and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee all in accordance with the terms of the
Indenture and the Notes and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Note Guarantee and the Indenture are expressly set forth in
Article Ten of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Note Guarantee. Each Holder of a Note, by accepting
the same, (a) agrees to and shall be bound by such provisions and (b) appoints
the Trustee attorney-in-fact of such Holder for such purpose.

[SIGNATURE PAGES FOLLOW]

E-1

 

          IN WITNESS HEREOF, each Guarantor has caused this Notation of Guarantee to
be signed manually or by facsimile by its duly authorized officer.

	 	 	 	 	 
	 	[NAME OF GUARANTOR]

 

 	 
	 	By:  	                                                                                                 
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

E-2

 

	 	 	 	 	 

EXHIBIT F

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS

          Supplemental Indenture (this “Supplemental Indenture”), dated as of
[DATE], among [NAME OF SUBSEQUENT GUARANTOR] (the “Guaranteeing Subsidiary”), a
subsidiary of Encore Medical IHC, Inc., a Delaware corporation (or its
permitted successor) (the “Company”), each other then existing Guarantor under
the Indenture (defined below) (the “Guarantors”) and Wells Fargo Bank, N.A., a
nationally chartered banking association (or its permitted successor), as
trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

          WHEREAS, the Company and the other Guarantors party thereto have
heretofore executed and delivered to the Trustee an indenture (the
“Indenture”), dated as of October 4, 2004 providing for the issuance of the
Company’s 9.750% Senior Subordinated Notes due 2012 (the “Notes”);

          WHEREAS, Section 4.18 of the Indenture provides that under certain
circumstances the Guaranteeing Subsidiary shall execute and deliver to the
Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary
shall, subject to Article Ten of the Indenture, unconditionally guarantee the
Notes on the terms and conditions set forth therein (the “Note Guarantee”); and

          WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

          NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary, the Company, the Guarantors and the Trustee agree as
follows for the equal and ratable benefit of the Holders of the Notes:

          1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

          2. Agreement to Guarantee.

          (a) Subject to Article Ten of the Indenture, the Guaranteeing Subsidiary,
jointly and severally with all other Guarantors, fully and unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of the Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that:

          (i) the principal of, premium, if any, and interest and Liquidated
Damages, if any, on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes, if lawful (subject in all

F-1

 

cases to any applicable grace period provided herein), and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full, all in accordance with the
terms hereof and thereof; and

          (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same will be promptly paid in
full when due in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same
immediately. The Guaranteeing Subsidiary agrees that this is a guarantee
of payment and not a guarantee of collection.

          (b) The Guaranteeing Subsidiary hereby agrees that, to the maximum extent
permitted under applicable law, its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Notes or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a Guarantor.

          (c) The Guaranteeing Subsidiary, subject to Section 6.06 of the Indenture,
hereby waives diligence, presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that this Note Guarantee shall not be discharged
except by complete performance of the obligations contained in the Notes and
the Indenture.

          (d) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors, or any custodian, trustee, liquidator or
other similar official acting in relation to any of the Company or the
Guarantors, any amount paid by any of them to the Trustee or such Holder, this
Note Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect.

          (e) The Guaranteeing Subsidiary agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.

          (f) The Guaranteeing Subsidiary agrees that, as between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article Six of the Indenture for the purposes of the Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article Six of the Indenture, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantors for the purpose of the
Note Guarantee.

F-2

 

          (g) The Guaranteeing Subsidiary shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Note Guarantee.

          (h) The Guaranteeing Subsidiary confirms, pursuant to Section 10.02 of the
Indenture, that it is the intention of such Guaranteeing Subsidiary that the
Note Guarantee not constitute (i) a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to the Note Guarantee or (ii) an unlawful distribution under any
applicable state law prohibiting shareholder distributions by an insolvent
subsidiary to the extent applicable to the Note Guarantee. To effectuate the
foregoing intention, the Guaranteeing Subsidiary and the Trustee hereby
irrevocably agree that the obligations of the Guaranteeing Subsidiary will be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guaranteeing Subsidiary that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under
Article Ten of the Indenture, result in the obligations of the Guaranteeing
Subsidiary under the Note Guarantee not constituting a fraudulent transfer or
conveyance or such an unlawful shareholder distribution.

          3. Execution and Delivery. The Guaranteeing Subsidiary agrees that the
Note Guarantee shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of the Note Guarantee.

          4. Guaranteeing Subsidiary May Consolidate, Etc., on Certain Terms.

          (a) The Guaranteeing Subsidiary may not sell or otherwise dispose of all
or substantially all of its assets to, or consolidate with or merge with or
into (whether or not the Guaranteeing Subsidiary is the surviving Person),
another Person, other than the Company or another Guarantor, unless:

          (i) immediately after giving effect to that transaction, no Default
or Event of Default exists; and

          (ii) either:

               (A) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such
consolidation or merger (if other than the Guaranteeing Subsidiary)
is organized or existing under the laws of the United States, any
state thereof or the District of Columbia and assumes all the
obligations of that Guaranteeing Subsidiary under the Indenture,
this Supplemental Indenture, the Note Guarantee and the
Registration Rights Agreement pursuant to a supplemental indenture
reasonably satisfactory to the Trustee; or

               (B) such sale or other disposition or consolidation or merger
complies with Section 4.10 of the Indenture.

F-3

 

          (b) In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all
of the covenants and conditions of the Indenture to be performed by the
Guaranteeing Subsidiary, such successor Person shall succeed to and be
substituted for the Guaranteeing Subsidiary with the same effect as if it had
been named herein as a Guaranteeing Subsidiary. Such successor Person
thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable under the Indenture which theretofore
shall not have been signed by the Company and delivered to the Trustee. All
the Note Guarantees so issued shall in all respects have the same legal rank
and benefit under the Indenture as the Note Guarantees theretofore and
thereafter issued in accordance with the terms of the Indenture as though all
of such Note Guarantees had been issued at the date of the execution of the
Indenture.

          (c) Except as set forth in Article Five of the Indenture, and
notwithstanding clauses (i) and (ii) of Section 4(a) above and clauses (i) and
(ii) of Section 10.04(a) of the Indenture, nothing contained in the Indenture
or in any of the Notes shall prevent any consolidation or merger of a
Guaranteeing Subsidiary with or into the Company or another Guarantor, or shall
prevent any sale or conveyance of the property of a Guaranteeing Subsidiary as
an entirety or substantially as an entirety to the Company or another
Guarantor.

          5. Release.

          (a) The Guaranteeing Subsidiary will be released and relieved of any
obligations under the Note Guarantee, (i) in connection with any sale or other
disposition of Capital Stock of the Guaranteeing Subsidiary to a Person that is
not (either before or after giving effect to such transaction) a Subsidiary of
the Company such that, immediately after giving effect to such transaction, the
Guaranteeing Subsidiary would no longer constitute a Subsidiary of the Company,
if the sale of such Capital Stock of the Guaranteeing Subsidiary complies with
Section 4.10 and Section 4.07 of the Indenture; (ii) if the Company properly
designates the Guaranteeing Subsidiary as an Unrestricted Subsidiary under the
Indenture; or (iii) solely in the case of a Note Guarantee created pursuant to
the second sentence of Section 4.18(a) of the Indenture, upon the release or
discharge of the Guarantee which resulted in the creation of the Note Guarantee
pursuant to Section 4.18(b) of the Indenture, except a discharge or release by
or as a result of payment under such Guarantee. Upon delivery by the Company
to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the
effect that one of the foregoing requirements has been satisfied and the
conditions to the release of the Guaranteeing Subsidiary under this Section 5
have been met, the Trustee shall execute any documents reasonably required in
order to evidence the release of the Guaranteeing Subsidiary from its
obligations under the Note Guarantee.

          (b) If the Guaranteeing Subsidiary is not released from its obligations
under the Note Guarantee it shall remain liable for the full amount of
principal of and interest and Liquidated Damages, if any, on the Notes and for
the other obligations of any Guarantor under the Indenture as provided in
Article Ten of the Indenture.

F-4

 

          6. No Recourse Against Others. Pursuant to Section 13.07 of the
Indenture, no director, officer, employee, incorporator or stockholder of the
Guaranteeing Subsidiary shall have any liability for any obligations of the
Guaranteeing Subsidiary under the Notes, the Indenture, this Supplemental
Indenture, the Note Guarantees or for any claim based on, in respect of, or by
reason of, such obligations or their creation. This waiver and release are
part of the consideration for the Note Guarantee.

          7. Subordination of Note Guarantee. Payments under the Note Guarantees
pursuant to this Supplemental Indenture shall be subordinated to the prior
payment in full of all Senior Debt of such Guarantor, including Senior Debt
incurred after the date of this Supplemental Indenture, on the same basis as
the payments by the Company on the Notes are subordinated to the prior payment
in full of Senior Debt of the Company. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by the Guaranteeing Subsidiary only at such times as they may
receive and/or retain payments in respect of the Notes pursuant to the
Indenture, including Article Twelve thereof.

          8. NEW YORK LAW TO GOVERN. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE AND THE NOTE GUARANTEE.

          9. 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.

          10. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.

          11. Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.

[SIGNATURE PAGE FOLLOWS]

F-5

 

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

	 	 	 
	

	 	[NAME OF GUARANTEEING SUBSIDIARY]
	 
	 	 
	

	 	By:                                                                            
	

	 	      Name:
	

	 	      Title:
	 
	 	 
	

	 	ENCORE MEDICAL IHC, INC.
	 
	 	 
	

	 	By:                                                                            
	

	 	      Name:
	

	 	      Title:
	 
	 	 
	

	 	WELLS FARGO BANK, N.A.,
AS TRUSTEE
	 
	 	 
	

	 	By:                                                                            
	

	 	      Name:
	

	 	      Title:
	 
	 	 
	

	 	[EACH THEN EXISTING GUARANTOR]
	 
	 	 
	

	 	By:                                                                            
	

	 	      Name:
	

	 	      Title:

F-6exv4w2

 

Exhibit 4.2

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

by and among

Encore Medical IHC, Inc.

and

The Guarantors listed on Schedule A hereto

and

Banc of America Securities LLC

and

First Albany Capital Inc.

Dated as of October 4, 2004

 

 

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is made and entered
into as of October 4, 2004, by and among Encore Medical IHC, Inc., a Delaware
corporation (the “Company”), the initial Guarantors listed on Schedule A
hereto, and any Guarantors which may from time to time become party hereto, by
executing a Joinder Agreement to the Registration Rights Agreement, a form of
which is attached as Exhibit A hereto (together, the “Guarantors”), and Banc of
America Securities LLC and First Albany Capital Inc. (collectively the “Initial
Purchasers”), who have agreed to purchase the Company’s 9.75% Senior
Subordinated Notes due 2012 (the “Initial Notes”) pursuant to the Purchase
Agreement (as defined below).

     This Agreement is made pursuant to the Purchase Agreement, dated as of
September 28, 2004 (the “Purchase Agreement”), by and among the Company, Encore
Medical Corporation and certain subsidiaries of the Company identified therein
and the Initial Purchasers (i) for the benefit of the Initial Purchasers and
(ii) for the benefit of the holders from time to time of the Notes (including
the Initial Purchasers). In order to induce the Initial Purchasers to purchase
the Initial Notes, the Company and the Guarantors have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 5(h) of the Purchase Agreement.

     The parties hereby agree as follows:

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

     Additional Interest Payment Date: With respect to the Initial Notes, each
Interest Payment Date.

     Broker-Dealer: Any broker or dealer registered under the Exchange Act.

     Business Day: Any day except a Saturday, Sunday or other day that in the
City of New York, or in the city of the corporate trust office of the Trustee,
banks are authorized to close.

     Closing Date: The date of this Agreement.

     Commission: The Securities and Exchange Commission.

     Consummate: An Exchange Offer shall be deemed “Consummated” for purposes
of this Agreement upon the occurrence of (i) the filing and effectiveness under
the Securities Act of the Exchange Offer Registration Statement relating to the
Exchange Notes to be issued in the Exchange Offer, (ii) the maintenance of such
Registration Statement continuously effective and the keeping of the Exchange
Offer open for a period not less than the minimum period required pursuant to
Section 3(b) hereof, and (iii) the delivery by the Company to the Registrar
under the

 

 

Indenture of Exchange Notes in the same aggregate principal amount as the
aggregate principal amount of Initial Notes that were tendered by Holders
thereof pursuant to the Exchange Offer.

     Effectiveness Target Date: As defined in Section 5.

     Exchange Act: The Securities Exchange Act of 1934, as amended.

     Exchange Notes: The 9.75% Senior Subordinated Notes due 2012, of the same
series under the Indenture as the Initial Notes, and the related Guarantees to
be issued to Holders in exchange for Transfer Restricted Securities pursuant to
this Agreement.

     Exchange Offer: The registration by the Company and the Guarantors under
the Securities Act of the Exchange Notes pursuant to a Registration Statement
pursuant to which the Company and the Guarantors offer the Holders of all
outstanding Transfer Restricted Securities the opportunity to exchange all such
outstanding Transfer Restricted Securities held by such Holders for Exchange
Notes in an aggregate principal amount equal to the aggregate principal amount
of the Transfer Restricted Securities tendered in such exchange offer by such
Holders.

     Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.

     Holders: As defined in Section 2(b) hereof.

     Indemnified Holder: As defined in Section 8(a) hereof.

     Indenture: The Indenture, dated as of October 4, 2004, among the Company
and Wells Fargo Bank, N.A., as trustee (the “Trustee”), pursuant to which the
Notes are to be issued, as such Indenture is amended or supplemented from time
to time in accordance with the terms thereof.

     Initial Notes: The 9.75% Senior Subordinated Notes due 2012, of the same
series under the Indenture as the Exchange Notes and the related Guarantees,
for so long as such securities constitute Transfer Restricted Securities.

     Initial Placement: The issuance and sale by the Company of the Initial
Notes to the Initial Purchasers pursuant to the Purchase Agreement.

     Initial Purchasers: As defined in the preamble hereto.

     Interest Payment Date: As defined in the Indenture and the Notes.

     NASD: National Association of Securities Dealers, Inc.

     Notes: The Initial Notes and the Exchange Notes.

     Person: An individual, partnership, corporation, trust or unincorporated
organization, or a government or agency or political subdivision thereof.

2

 

     Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.

     Registration Default: As defined in Section 5 hereof.

     Registration Statement: Any registration statement of the Company and the
Guarantors relating to (a) an offering of Exchange Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, which is filed
pursuant to the provisions of this Agreement, in each case, including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.

     Securities Act: The Securities Act of 1933, as amended.

     Shelf Filing Deadline: As defined in Section 4 hereof.

     Shelf Registration Statement: As defined in Section 4 hereof.

     Transfer Restricted Securities: Each Note, until the earliest to occur of
(a) the date on which such Note is exchanged in the Exchange Offer and entitled
to be resold to the public by the Holder thereof without complying with the
prospectus delivery requirements of the Securities Act, (b) the date on which
such Note has been effectively registered under the Securities Act and disposed
of in accordance with a Shelf Registration Statement and (c) the date on which
such Note is distributed to the public pursuant to Rule 144 under the
Securities Act or by a Broker-Dealer pursuant to the “Plan of Distribution”
contemplated by the Exchange Offer Registration Statement (including delivery
of the Prospectus contained therein).

     Trust Indenture Act: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa 77bbbb) as in effect on the date of the Indenture.

     Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to
the public.

     Section 2. Securities Subject to This Agreement.

     (a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.

     (b) Holders of Transfer Restricted Securities. A Person is deemed to be a
holder of Transfer Restricted Securities (each, a “Holder”) whenever such
Person owns Transfer Restricted Securities.

     Section 3. Registered Exchange Offer.

     (a) Unless the Exchange Offer shall not be permissible under applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), the Company and the Guarantors shall (i) cause to be
filed with the Commission not later than 90 days after the Closing Date, a
Registration Statement under the Securities Act relating to the Exchange Notes
and the Exchange Offer, (ii) use their reasonable best efforts to cause such

3

 

Registration Statement to become effective not later than 180 days after
the Closing Date, (iii) in connection with the foregoing, file (A) all
pre-effective amendments to such Registration Statement as may be necessary in
order to cause such Registration Statement to become effective, (B) if
applicable, a post-effective amendment to such Registration Statement pursuant
to Rule 430A under the Securities Act and (C) cause all necessary filings in
connection with the registration and qualification of the Exchange Notes to be
made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of such
Registration Statement, commence the Exchange Offer. The Exchange Offer shall
be on the appropriate form permitting registration of the Exchange Notes to be
offered in exchange for the Transfer Restricted Securities and to permit
resales of Notes held by Broker-Dealers as contemplated by Section 3(c) below.

     (b) The Company and the Guarantors shall use their reasonable best efforts
to cause the Exchange Offer Registration Statement to be effective continuously
and shall keep the Exchange Offer open for a period of not less than the
minimum period required under applicable federal and state securities laws to
Consummate the Exchange Offer; provided, however, that in no event shall such
period be less than 30 days after the date notice of the Exchange Offer is
mailed to the Holders. The Company and the Guarantors shall cause the Exchange
Offer to comply with all applicable federal and state securities laws. No
securities other than the Notes shall be included in the Exchange Offer
Registration Statement. The Company and the Guarantors shall use their
reasonable best efforts to cause the Exchange Offer to be Consummated on the
earliest practicable date after the Exchange Offer Registration Statement has
become effective, but in no event later than 30 Business Days after the date
the Exchange Offer Registration Statement has become effective.

     (c) The Company shall indicate in a “Plan of Distribution” section
contained in the Prospectus forming a part of the Exchange Offer Registration
Statement that any Broker-Dealer who holds Initial Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company), may exchange such
Initial Notes pursuant to the Exchange Offer; however, such Broker-Dealer may
be deemed to be an “underwriter” within the meaning of the Securities Act and
must, therefore, deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of the Exchange Notes received by
such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement
may be satisfied by the delivery by such Broker-Dealer of the Prospectus
contained in the Exchange Offer Registration Statement. Such “Plan of
Distribution” section shall also contain all other information with respect to
such resales by Broker-Dealers that the Commission may require in order to
permit such resales pursuant thereto, but such “Plan of Distribution” shall not
name any such Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer except to the extent required by the Commission as a result of a
change in policy after the date of this Agreement.

     The Company and the Guarantors shall use their reasonable best efforts to
keep the Exchange Offer Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section 6(c) below to
the extent necessary to ensure that it is available for resales of Notes
acquired by Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules and
regulations of the

4

 

Commission as announced from time to time, for a period ending on the
earlier of (i) 180 days from the date on which the Exchange Offer Registration
Statement is declared effective (ii) the date on which a Broker-Dealer is no
longer required to deliver a prospectus in connection with market-making or
other trading activities and (iii) the date on which all the Notes covered by
such Exchange Offer Registration Statement have been sold pursuant to such
Exchange Offer Registration Statement.

     The Company shall provide sufficient copies of the latest version of such
Prospectus to Broker-Dealers promptly upon request at any time during such
180-day (or shorter as provided in the foregoing sentence) period in order to
facilitate such resales.

     Section 4. Shelf Registration.

     (a) Shelf Registration. If (i) the Company and the Guarantors are not
required to file an Exchange Offer Registration Statement or to consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable law or
Commission policy (after the procedures set forth in Section 6(a)(i) below have
been complied with), (ii) for any reason the Exchange Offer is not Consummated
within 30 Business Days after the Effectiveness Target Date with respect to the
Exchange Offer Registration Statement, or (iii) with respect to any Holder of
Transfer Restricted Securities, such holder notifies the Company prior to the
20th day following the consummation of the Exchange Offer that (A) such Holder
is prohibited by applicable law or Commission policy from participating in the
Exchange Offer, or (B) such Holder may not resell the Exchange Notes acquired
by it in the Exchange Offer to the public without delivering a prospectus and
that the Prospectus contained in the Exchange Offer Registration Statement is
not appropriate or available for such resales by such Holder, or (C) such
Holder is a Broker-Dealer and holds Initial Notes acquired directly from the
Company or one of its affiliates, then, upon such Holder’s request, the Company
and the Guarantors shall

     (x) cause to be filed a shelf registration statement pursuant to
Rule 415 under the Securities Act, which may be an amendment to the
Exchange Offer Registration Statement (in either event, the “Shelf
Registration Statement”) as soon as practicable but in any event on or
prior to 45 days after the filing obligation arises (such date being the
“Shelf Filing Deadline”), which Shelf Registration Statement shall
provide for resales of all Transfer Restricted Securities the Holders of
which shall have provided the information required pursuant to Section
4(b) hereof; and

     (y) use their reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on or
prior to 90 days after the Shelf Filing Deadline, provided, however, that
in no event shall the Company and the Guarantors be obligated to cause
such Shelf Registration to be declared effective by the Commission prior
to 180 days after the closing of this offering.

     The Company and the Guarantors shall use their reasonable best efforts to
keep such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Notes by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period until the earlier of
(i) the expiration of the period referred to in Rule 144(k)

5

 

under the Securities Act (or any successor rule) with respect to Transfer
Restricted Securities, (ii) two years following the effective date of such
Shelf Registration Statement and (iii) the date on which all the Notes covered
by such Shelf Registration Statement have been sold pursuant to such Shelf
Registration Statement.

     (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 Business Days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information
previously furnished to the Company by such Holder not materially misleading.

     Section 5. Additional Interest. (a) If (i) any of the Registration
Statements required by this Agreement is not filed with the Commission on or
prior to the date specified for such filing in this Agreement, (ii) any of such
Registration Statements has not been declared effective by the Commission on or
prior to the date specified for such effectiveness in this Agreement (the
“Effectiveness Target Date”), (iii) the Exchange Offer has not been Consummated
within 30 Business Days after the Effectiveness Target Date with respect to the
Exchange Offer Registration Statement or (iv) any Registration Statement
required by this Agreement is filed and declared effective but shall thereafter
cease to be effective or fail to be usable for its intended purpose (each such
event referred to in clauses (i) through (iv), a “Registration Default”), the
Company hereby agrees that the interest rate borne by the Transfer Restricted
Securities shall be increased by 0.25% per annum during the 90-day period
immediately following the occurrence of any Registration Default and shall
increase by 0.25% per annum at the end of each subsequent 90-day period, but in
no event shall such increase exceed 1.00% per annum. Following the cure of all
Registration Defaults relating to any particular Transfer Restricted
Securities, the interest rate borne by the relevant Transfer Restricted
Securities will be reduced to the original interest rate borne by such Transfer
Restricted Securities; provided, however, that, if after any such reduction in
interest rate, a different Registration Default occurs, the interest rate borne
by the relevant Transfer Restricted Securities shall again be increased
pursuant to the foregoing provisions.

     (b) A Registration Default referred to in Section 5(iv) hereof shall be
deemed not to have occurred and be continuing in relation to a Shelf
Registration Statement or the related Prospectus if (i) such Registration
Default has occurred solely as a result of material events with respect to the
Company and the Guarantors that would need to be described in such Shelf
Registration Statement or the related Prospectus and such event is not so
described therein and (ii) the Company and the Guarantors are proceeding
promptly and in good faith to amend or supplement such Shelf Registration
Statement and related Prospectus to describe such events; provided, however,
that in any case if such Registration Default occurs for a continuous period in
excess of 30 days in any 12 month period, Additional Interest shall be payable
in accordance with the above paragraph from the day such Registration Default
occurs until such Registration Default is cured.

6

 

     All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations with
respect to such Note shall have been satisfied in full.

     Section 6. Registration Procedures.

     (a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with all of the
provisions of Section 6(c) below, shall use their best efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:

     (i) If in the reasonable opinion of counsel to the Company there is
a question as to whether the Exchange Offer is permitted by applicable
law, the Company and the Guarantors hereby agree to seek a no-action
letter or other favorable decision from the Commission allowing the
Company and the Guarantors to Consummate an Exchange Offer for such
Initial Notes. The Company and the Guarantors each hereby agree to
pursue the issuance of such a decision to the Commission staff level but
shall not be required to take action to effect a change of Commission
policy. The Company and the Guarantors each hereby agree, however, to
(A) participate in telephonic conferences with the Commission, (B)
deliver to the Commission staff an analysis prepared by counsel to the
Company setting forth the legal bases, if any, upon which such counsel
has concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution by the Commission staff of such
submission.

     (ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the
Company (which may be contained in the letter of transmittal contemplated
by the Exchange Offer Registration Statement) to the effect that (A) it
is not an affiliate of the Company, (B) it is not engaged in, and does
not intend to engage in, and has no arrangement or understanding with any
person to participate in, a distribution of the Exchange Notes to be
issued in the Exchange Offer and (C) it is acquiring the Exchange Notes
in its ordinary course of business. In addition, all such Holders of
Transfer Restricted Securities shall otherwise cooperate in the Company’s
preparations for the Exchange Offer. Each Holder, including any Holder
that is a Broker-Dealer, shall acknowledge and agree that any such Holder
using the Exchange Offer to participate in a distribution of the
securities to be acquired in the Exchange Offer (1) could not under
Commission policy as in effect on the date of this Agreement rely on the
position of the Commission enunciated in Morgan Stanley & Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commission’s letter to
Shearman & Sterling dated July 2, 1993, and similar no-action letters
(which may include any no-action letter obtained pursuant to clause (i)
above), and (2) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction and that such a secondary resale transaction should be
covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as

7

 

applicable, of Regulation S-K if the resales are of Exchange Notes
obtained by such Holder in exchange for Initial Notes acquired by such
Holder directly from the Company.

     (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all
the provisions of Section 6(c) below and shall use their reasonable best
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto the Company and the
Guarantors will as expeditiously as possible prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available for
the sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.

     (c) General Provisions. In connection with any Registration Statement and
any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Notes by
Broker-Dealers), the Company and the Guarantors shall:

     (i) use their reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements including, if required by the Securities Act or any regulation
thereunder, financial statements of the Guarantors for the period
specified in Section 3 or 4 of this Agreement, as applicable; upon the
occurrence of any event that would cause any such Registration Statement
or the Prospectus contained therein (A) to contain an untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein not misleading or (B) not to be effective and usable
for resale of Transfer Restricted Securities during the period required
by this Agreement, the Company and the Guarantors shall file promptly an
appropriate amendment to such Registration Statement or supplement to the
Prospectus or document incorporated by reference, in the case of clause
(A), correcting any such misstatement or omission, and, in the case of an
amendment, use their reasonable best efforts to cause such amendment to
be declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;

     (ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act,
and to comply fully with the applicable provisions of Rules 424 and 430A
under the Securities Act, as applicable, in a timely manner; and comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;

     (iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect

8

 

to any Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the
Securities Act or of the suspension by any state securities commission of
the qualification of the Transfer Restricted Securities for offering or
sale in any jurisdiction, or the initiation of any proceeding for any of
the preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, or
any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under state securities or Blue Sky
laws, the Company and the Guarantors shall use their reasonable best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;

     (iv) furnish without charge to each of the Initial Purchasers, each
selling Holder named in any Registration Statement, and each of the
underwriter(s), if any, at least one copy before filing with the
Commission of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration
Statement or Prospectus (including, if requested in writing by any such
Person, all documents incorporated by reference after the initial filing
of such Registration Statement), which Registration Statement or any
Prospectus included therein or any amendments or supplements to any such
Registration Statement or Prospectus will be subject to the review of the
Initial Purchasers and such Holders and underwriter(s) in connection with
such sale, if any, for a period of at least five Business Days, and the
Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus to which the Initial Purchasers or the underwriter(s), if any,
shall reasonably object in writing within five Business Days after the
receipt thereof (such objection to be deemed timely made upon
confirmation of telecopy transmission within such period). The objection
of an Initial Purchaser or an underwriter, if any, shall be deemed to be
reasonable if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains an untrue
statement of a material fact or omits to state a material fact necessary
to make the statements therein not misleading;

     (v) make available at reasonable times for inspection by the Initial
Purchasers, any managing underwriter participating in any disposition
pursuant to such Registration Statement and any attorney or accountant
retained by such Initial Purchaser or any of the underwriter(s), all
financial and other records, pertinent corporate documents and properties
of the Company and the Guarantors and cause the Company’s and the
Guarantors’ officers and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney or accountant in
connection with such Registration Statement subsequent to the filing
thereof and prior to its effectiveness; provided, however, that the
foregoing inspection and information gathering shall be

9

 

coordinated on behalf of the Initial Purchasers by Shearman &
Sterling LLP and on behalf of any other parties by one counsel designated
by and on behalf of such other parties as described in Section 7 hereof.

     (vi) if requested in writing by any selling Holders or the
underwriter(s), if any, promptly incorporate in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may reasonably request to have included therein,
including, without limitation, information relating to the “Plan of
Distribution” of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid therefor and
any other terms of the offering of the Transfer Restricted Securities to
be sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as practicable
after the Company is notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;

     (vii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies,
if so requested by the Holders of a majority in aggregate principal
amount of Notes covered thereby or the underwriter(s), if any;

     (viii) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including financial statements and schedules and, if
requested in writing, all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);

     (ix) deliver to each selling Holder and each of the underwriter(s),
if any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Company and the Guarantors hereby
consent to the use of the Prospectus and any amendment or supplement
thereto by each of the selling Holders and each of the underwriter(s), if
any, in connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;

     (x) enter into, and cause the Guarantors to enter into, such
agreements (including an underwriting agreement), and make, and cause the
Guarantors to make, such representations and warranties, and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities pursuant
to any Shelf Registration Statement contemplated by this Agreement, all
to such extent as may be reasonably requested by an Initial Purchaser or
by any Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to any Shelf Registration
Statement contemplated by this Agreement; and, whether or not an
underwriting agreement is entered into and whether or not such
registration is an Underwritten Registration, the Company and the
Guarantors shall:

     (A) furnish to the Initial Purchasers, each selling Holder and
each underwriter, if any, in such substance and scope as they may
request and as are

10

 

customarily made by issuers to underwriters in primary
underwritten offerings, upon the date of the effectiveness of the
Shelf Registration Statement:

     (1) a certificate, dated the date of the effectiveness
of the Shelf Registration Statement signed by (y) the
President or any Vice President and (z) a principal financial
or accounting officer of each of the Company and the
Guarantors, confirming, as of the date thereof, the matters
set forth in paragraphs (i), (ii), (iii) and (iv) of Section
5 (e) of the Purchase Agreement and such other matters as
such parties may reasonably request;

     (2) an opinion, dated the date of the effectiveness of
the Shelf Registration Statement of counsel for the Company
and the Guarantors, covering the matters set forth in
paragraph (c) of Section 5 of the Purchase Agreement and such
other matter as such parties may reasonably request, and in
any event including a statement to the effect that such
counsel has participated in conferences with officers and
other representatives of the Company and the Guarantors,
representatives of the independent public accountants for the
Company and the Guarantors, the Initial Purchasers’
representatives and the Initial Purchasers’ counsel in
connection with the preparation of such Registration
Statement and the related Prospectus and have considered the
matters required to be stated therein and the statements
contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness
of such statements; and that such counsel advises that, on
the basis of the foregoing (relying as to materiality to a
large extent upon facts provided to such counsel by officers
and other representatives of the Company and the Guarantors
and without independent check or verification), no facts came
to such counsel’s attention that caused such counsel to
believe that the Shelf Registration Statement, at the time
such Registration Statement or any post-effective amendment
thereto became effective contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus contained in such
Registration Statement as of its date contained an untrue
statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading. Without limiting the foregoing, such counsel may
state further that such counsel assumes no responsibility
for, and has not independently verified, the accuracy,
completeness or fairness of the financial statements, notes
and schedules and other financial data included in any
Registration Statement contemplated by this Agreement or the
related Prospectus; and

     (3) customary comfort letters, dated as of the date of
the effectiveness of the Shelf Registration Statement from
(i) the Company’s and the Guarantors’ independent accountants
and (ii) the independent accountants of any other Person for
which financial statements are included in or incorporated by
reference in to such Shelf Registration

11

 

Statement, in the customary form and covering matters of
the type customarily covered in comfort letters by
underwriters in connection with primary underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 5(a) of the Purchase
Agreement, without exception;

     (B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and

     (C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company or the Guarantors pursuant to this clause (x), if any.

     If at any time the representations and warranties of the Company and
the Guarantors contemplated in clause (A)(1) above cease to be true and
correct, the Company or the Guarantors shall so advise the Initial
Purchasers and the underwriter(s), if any, and each selling Holder
promptly and, if requested by such Persons, shall confirm such advice in
writing;

     (xi) prior to any public offering of Transfer Restricted Securities,
cooperate with, and cause the Guarantors to cooperate with, the selling
Holders, the underwriter(s), if any, and their respective counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s) may reasonably
request and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Shelf Registration Statement; provided,
however, that neither the Company nor the Guarantors shall be required to
register or qualify as a foreign corporation where it is not then so
qualified or to take any action that would subject it to the service of
process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction
where it is not then so subject;

     (xii) shall issue, upon the request of any Holder of Initial Notes
covered by and sold pursuant to the Shelf Registration Statement,
Exchange Notes, having an aggregate principal amount equal to the
aggregate principal amount of Initial Notes surrendered to the Company by
such Holder in exchange therefor; such Exchange Notes to be registered in
the name of the purchaser of such Notes; in return, the Initial Notes
held by such Holder shall be surrendered to the Company for cancellation;

     (xiii) cooperate with, and cause the Guarantors to cooperate with,
the selling Holders and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive legends;
and enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two Business Days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);

12

 

     (xiv) use its reasonable best efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
or the underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (viii) above;

     (xv) if any fact or event contemplated by clause (c)(iii)(D) above
shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading;

     (xvi) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit
with the Depository Trust Company;

     (xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any “qualified independent underwriter”) that is
required to be retained in accordance with the rules and regulations of
the NASD, and use their reasonable best efforts to cause such
Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;

     (xviii) otherwise use their reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make
generally available to Encore Medical Corporation’s security holders, as
soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) for the twelve-month
period (A) commencing at the end of any fiscal quarter in which Transfer
Restricted Securities are sold to underwriters in a firm or best efforts
Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Company’s first fiscal
quarter commencing after the effective date of the Registration
Statement;

     (xix) cause the Indenture to be qualified under the Trust Indenture
Act not later than the effective date of the first Registration Statement
required by this Agreement, and, in connection therewith, cooperate with,
and cause the Guarantors to cooperate with, the Trustee and the Holders
of Notes to effect such changes to the Indenture as may be required for
such Indenture to be so qualified in accordance with the terms of the
Trust Indenture Act; and to execute, and cause the Guarantors to execute,
and use their reasonable best efforts to cause the Trustee to execute,
all documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable
such Indenture to be so qualified in a timely manner; and

13

 

     (xx) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act.

     Each Holder shall agree by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the applicable Registration Statement until such Holder’s receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi)
hereof, or until it is advised in writing (the “Advice”) by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company’s expense) all copies, other than permanent file copies
then in such Holder’s possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such notice.
In the event the Company shall give any such notice, the time period regarding
the effectiveness of such Registration Statement set forth in Section 3 or 4
hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(c)(iii)(D) hereof to and including the date when each selling Holder
covered by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice; however, no such extension shall be taken into
account in determining whether Additional Interest is due pursuant to Section 5
hereof or the amount of such Additional Interest, it being agreed that the
Company’s option to suspend use of a Registration Statement pursuant to this
paragraph shall be treated as a Registration Default for purposes of Section 5.

     Section 7. Registration Expenses.

     (a) All expenses incident to the Company’s or the Guarantors’ performance
of or compliance with this Agreement will be borne by the Company and the
Guarantors, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses
(including filings made by the Initial Purchasers or Holders with the NASD
(and, if applicable, the fees and expenses of any “qualified independent
underwriter” and its counsel that may be required by the rules and regulations
of the NASD)); (ii) all fees and expenses of compliance with federal securities
and state Blue Sky or securities laws; (iii) all expenses of printing
(including printing of Prospectuses), messenger and delivery services and
telephone; (iv) all fees and disbursements of counsel for the Company, the
Guarantors and, subject to Section 7(b) below, the Holders of Transfer
Restricted Securities; and (v) all fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).

     The Company and the Guarantors will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.

     (b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf

14

 

Registration Statement), the Company and the Guarantors will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the “Plan of
Distribution” contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Shearman & Sterling LLP or such other counsel as may be chosen by the Holders
of a majority in principal amount of the Transfer Restricted Securities for
whose benefit such Registration Statement is being prepared.

     Section 8. Indemnification.

     (a) The Company agrees and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder and (ii) each person, if any, who
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) any Holder (any of the persons referred to in this clause
(ii) being hereinafter referred to as a “controlling person”) and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Holder or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an “Indemnified Holder”), to
the fullest extent lawful, from and against any and all losses, claims,
damages, liabilities, judgments, actions and expenses (including without
limitation and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing, settling, compromising, paying or defending
any claim or action, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, including the reasonable fees and
expenses of counsel to any Indemnified Holder), joint or several, directly or
indirectly caused by, related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (or any amendment or
supplement thereto), or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except (i) insofar as such losses, claims, damages,
liabilities or expenses are caused by an untrue statement or omission or
alleged untrue statement or omission that is made in reliance upon and in
conformity with information relating to any of the Holders furnished in writing
to the Company and the Guarantors by any of the Holders expressly for use
therein and (ii) with respect to any untrue statement or omission or alleged
untrue statement or omission of material fact made in any preliminary
prospectus relating to a Shelf Registration Statement, the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any Holder
from whom the Person asserting any such losses, claims, damages, or liabilities
purchased the Notes concerned if the Company or the Guarantors sustain the
burden of proving that (x) a prospectus relating to such Notes was required to
be delivered by such Holder under the Securities Act in connection with such
purchase, (y) such Holder sold the Notes to a Person whom such Holder failed to
send or give, at or prior to the written confirmation of the sale of such
Notes, a copy of the final prospectus (as amended or supplemented) and (z) any
loss, claim, damage or liability of such Holder results solely from an untrue
statement or omission or alleged untrue statement or omission of material fact
contained in or omitted from such preliminary prospectus which was corrected in
the final prospectus and such final prospectus was provided by the Company and
the Guarantors to such Holder sufficiently in advance of the closing of such
sale to allow for distribution of the final prospectus in a timely manner.
This indemnity agreement shall be in addition to any liability which the
Company or any Guarantor may otherwise have.

15

 

     In case any action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be brought or asserted against any of the
Indemnified Holders with respect to which indemnity may be sought against the
Company or any Guarantor, such Indemnified Holder (or the Indemnified Holder
controlled by such controlling person) shall promptly notify the Company and
the Guarantors in writing (provided that the failure to give such notice shall
not relieve the Company or the Guarantors of their respective obligations
pursuant to this Agreement). Such Indemnified Holder shall have the right to
employ its own counsel in any such action and the fees and expenses of such
counsel shall be paid, as incurred, by the Company and the Guarantors
(regardless of whether it is ultimately determined that an Indemnified Holder
is not entitled to indemnification hereunder). The Company and the Guarantors
shall not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for such Indemnified
Holders, which firm shall be designated by the Holders. The Company shall be
liable for any settlement of any such action or proceeding effected with the
Company’s prior written consent, which consent shall not be withheld
unreasonably, and the Company and the Guarantors agree to indemnify and hold
harmless any Indemnified Holder from and against any loss, claim, damage,
liability or expense by reason of any settlement of any action effected with
the written consent of the Company. The Company and the Guarantors shall not,
without the prior written consent of each Indemnified Holder, settle or
compromise or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, claim, litigation or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not any Indemnified Holder is a party thereto), unless such
settlement, compromise, consent or termination includes an unconditional
release of each Indemnified Holder from all liability arising out of such
action, claim, litigation or proceeding.

     (b) Each Holder of Transfer Restricted Securities shall, severally and not
jointly, indemnify and hold harmless the Company, the Guarantors and their
respective officers, directors, partners, employees, representatives and
agents, and any person controlling (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) the Company and the
Guarantors, and the respective officers, directors, partners, employees,
representatives and agents of each such person, to the same extent as the
foregoing indemnity from the Company and the Guarantors to each of the
Indemnified Holders, but only with respect to claims and actions based on
information relating to such Holder furnished in writing by such Holder
expressly for use in any Registration Statement. In case any action or
proceeding shall be brought against the Company, the Guarantors, any such
controlling person, or their respective officers, directors, partners,
employees, representatives and agents in respect of which indemnity may be
sought against a Holder of Transfer Restricted Securities, such Holder shall
have the rights and duties given the Company and the Guarantors and the
Company, the Guarantors, such controlling person and their respective officers,
directors, partners, employees, representatives and agents shall have the
rights and duties given to each Indemnified Holder by Section 8(a). In no
event shall the liability of any selling Holder hereunder be greater in amount
than the dollar amount of the proceeds received by such Holder upon the sale of
the Notes giving rise to such indemnification obligation.

     (c) If the indemnification provided for in this Section 8 is unavailable
to an indemnified party under Section 8(a) or Section 8(b) hereof (other than
by reason of exceptions

16

 

provided in those Sections) in respect of any losses, claims, damages,
liabilities, judgments, actions or expenses referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Holders, on the other
hand, from the Initial Placement (which in the case of the Company shall be
deemed to be equal to the total gross proceeds from the Initial Placement as
set forth on the cover page of the Offering Memorandum) or if such allocation
is not permitted by applicable law, the relative fault of the Company and the
Guarantors on the one hand, and of the Indemnified Holder, on the other hand,
in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand
and of the Indemnified Holder on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Indemnified Holder and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable
by a party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 8(a), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.

     The Company and the Guarantors agree and each Holder of Transfer
Restricted Securities shall agree that it would not be just and equitable if
contribution pursuant to this Section 8(c) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, none of the Holders (and its
related Indemnified Holders) shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the net proceeds received by such
Holder from the sale of the Notes pursuant to a Registration Statement exceeds
the amount of any damages which such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Holders’ obligations to contribute pursuant to this Section 8(c) are several in
proportion to the respective principal amount of Initial Notes held by each of
the Holders hereunder and not joint.

     Section 9. Rule 144A. The Company and the Guarantors each hereby agrees
with each Holder, for so long as any Transfer Restricted Securities remain
outstanding, to make available to any Holder or beneficial owner of Transfer
Restricted Securities in connection with any sale thereof and any prospective
purchaser of such Transfer Restricted Securities from such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Transfer Restricted Securities pursuant to Rule
144A.

17

 

     Section 10. Participation In Underwritten Registrations. No Holder may
participate in any Underwritten Registration hereunder unless such Holder (a)
agrees to sell such Holder’s Transfer Restricted Securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of
such underwriting arrangements.

     Section 11. Selection Of Underwriters. The Holders of Transfer
Restricted Securities covered by the Shelf Registration Statement who desire to
do so may sell such Transfer Restricted Securities in an Underwritten Offering.
In any such Underwritten Offering, the investment banker or investment bankers
and manager or managers that will administer the offering will be selected by
the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities included in such offering; provided that such investment
bankers and managers must be reasonably satisfactory to the Company.

     Section 12. Miscellaneous.

     (a) Remedies. The Company and the Guarantors each hereby agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agree
to waive the defense in any action for specific performance that a remedy at
law would be adequate.

     (b) No Inconsistent Agreements. The Company will not, and will cause the
Guarantors not to, on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. Neither the Company nor any of the Guarantors has entered
into any agreement granting any registration rights with respect to its
securities to any Person pursuant to which any such Person would have the right
to include any securities in any Registration Statement to be filed with the
Commission as required under this Agreement. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company’s securities under any agreement
in effect on the date hereof.

     (c) Adjustments Affecting the Notes. The Company and the Guarantors will
not take any action, or permit any change to occur, with respect to the Notes
that would materially and adversely affect their ability to Consummate the
Exchange Offer.

     (d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount
of Transfer Restricted Securities being tendered or registered; provided that,
with respect to any matter that directly or indirectly affects the rights of
the Initial Purchasers hereunder, the Company shall obtain the written consent
of the

18

 

Initial Purchasers with respect to which such amendment, qualification,
supplement, waiver, consent or departure is to be effective.

     (e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:

     (i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and

     (ii) if to the Company or the Guarantors:

c/o Encore Medical Corporation

9800 Metric Blvd.

Austin, Texas 78758

Facsimile: (512) 832-6310

Attention: Harry L. Zimmerman

With a copy to:

Winstead Sechrest & Minick P.C.

401 Congress Avenue, Suite 2100

Austin, Texas 78701

Facsimile: (512) 370-2850

Attention: Darrell R. Windham

     (iii) if to the Initial Purchasers:

c/o Banc of America Securities LLC

9 West 57th Street

New York, New York 10019

Facsimile: (212) 583-8567

Attention: Legal Department

With a copy to:

Shearman & Sterling LLP

599 Lexington Avenue

New York, New York 10022

Facsimile: (646) 848-7293

Attention: Andrew R. Schleider

     All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next Business Day, if timely delivered to an air courier guaranteeing overnight
delivery.

     Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

19

 

     (f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign
acquired Transfer Restricted Securities from such Holder.

     (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

     (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

     (k) Entire Agreement. This Agreement together with the Purchase
Agreement, the DTC Agreement and the Indenture (as defined in the Purchase
Agreement) is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein with respect to the registration
rights granted by the Company and the Guarantors with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

20

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

	 	 	 	 	 
	 	 	ENCORE MEDICAL IHC, INC.
	 
	 	 	 	 
	

	 	By:	 	            /s/ Harry L. Zimmerman
 
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
 
	

	 	 	 	Title:    Executive Vice President -
General Counsel
	 
	 	 	 	 
	 	 	ENCORE MEDICAL CORPORATION
	 
	 	 	 	 
	

	 	By:	 	            /s/ Harry L. Zimmerman
 
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
 
	

	 	 	 	Title:    Executive Vice President -
General Counsel
	 
	 	 	 	 
	 	 	ENCORE MEDICAL L.P.
	 
	 	 	 	 
	 	 	By: Encore Medical GP,
Inc., its General Partner

	 	 	 	 	 
	

	 	By:	 	            /s/ Harry L. Zimmerman
 
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
	

	 	 	 	Title:    Executive Vice President -
General Counsel

	 	 	 	 	 
	 	 	ENCORE MEDICAL ASSET CORPORATION
	 
	 	 	 	 
	

	 	By:	 	            /s/ Harry L. Zimmerman
 
	

	 	 	 	

	

	 	 	 	Name:  Harry L. Zimmerman
	

	 	 	 	Title:    Executive Vice President -
General Counsel

21

 

	 	 	 	 	 
	 	ENCORE MEDICAL GP, INC.

 	 
	 	By:	      /s/ Harry L. Zimmerman
 	 
	 	Name:  Harry L. Zimmerman 	 
	 	Title:    Executive Vice President - General Counsel	 	 
	 	 	 

	 	 	 	 	 
	 	ENCORE MEDICAL PARTNERS, INC.

 	 
	 	By:	      /s/ Harry L. Zimmerman
 	 
	 	Name:  Harry L. Zimmerman 	 
	 	Title:    Executive Vice President - General Counsel	 	 
	 	 	 

	 	 	 	 	 
	 	EMPI, INC.

 	 
	 	By:	      /s/ Harry L. Zimmerman
 	 
	 	Name:  Harry L. Zimmerman 	 
	 	Title:    Executive Vice President - General Counsel	 	 
	 	 	 

	 	 	 	 	 
	 	EMPI CORP.

 	 
	 	By:	      /s/ Harry L. Zimmerman
 	 
	 	Name:  Harry L. Zimmerman 	 
	 	Title:    Executive Vice President - General Counsel	 	 
	 	 	 

22

 

	 	 	 	 	 
	 	EMPI SALES CORP.

 	 
	 	By:	      /s/ Harry L. Zimmerman
 	 
	 	Name:  Harry L. Zimmerman 	 
	 	Title:    Executive Vice President - General Counsel	 	 
	 	 	 

23

 

     The foregoing Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written:

BANC OF AMERICA SECURITIES LLC

FIRST ALBANY CAPITAL INC.

		
	By: 	Bank of America Securities LLC for itself

and on behalf of the other Initial Purchaser

	 	 	 
	By
	 	/s/ Christopher K. Ooten
	

	 	

	

	 	Authorized Signatory

Christopher K. Ooten

Vice President

24

 

SCHEDULE A

Guarantors

	 	 	 
	Guarantor
	 	Jurisdiction of Organization

	Encore Medical Corporation

	 	Delaware
	 
	 	 
	Encore Medical L.P.

	 	Delaware
	 
	 	 
	Encore Medical Asset Corporation

	 	Nevada
	 
	 	 
	Encore Medical GP, Inc.

	 	Nevada
	 
	 	 
	Encore Medical Partners, Inc.

	 	Nevada
	 
	 	 
	Empi, Inc.

	 	Minnesota
	 
	 	 
	Empi Corp.

	 	Minnesota
	 
	 	 
	Empi Sales Corp.

	 	Minnesota

 

 

EXHIBIT A

Form of Joinder Agreement to the Registration Rights Agreement

JOINDER AGREEMENT TO THE REGISTRATION RIGHTS AGREEMENT

     The undersigned hereby joins that certain Registration Rights Agreement,
dated as of October 4, 2004 (the “Registration Rights Agreement”), by and among
Encore Medical IHC, Inc., the Guarantors (as defined in the Registration Rights
Agreement), Banc of America Securities LLC and First Albany Capital Inc.
pursuant to this Joinder Agreement (the “Joinder Agreement”).

     From and after the date hereof, the undersigned shall be deemed to be a
Guarantor under the Registration Rights Agreement and shall be bound by the
terms thereof in such capacity and to the same extent as if it was an original
party thereto.

     Unless otherwise provided in this Joinder Agreement, capitalized terms
shall have the meaning set forth in the Registration Rights Agreement.

 

 

     In witness whereof, the parties hereto have each caused this Joinder
Agreement to be duly executed and delivered as of [DATE], 2004.

	 	 	 	 	 
	 	 	[NAME OF NEW GUARANTOR]
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	 	 	Name:
	

	 	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]