Document:

Exhibit
10.19

 

 

AGREEMENT AND PLAN
OF MERGER

 

BY AND AMONG

 

CLICK COMMERCE,
INC.

 

REQUISITE
ACQUISITION INC.,

 

THOMAS G. WASHING,

as representative,

 

AND

 

REQUISITE
TECHNOLOGY, INC.

 

Dated as of November 22,
2005

 

 

 

TABLE OF CONTENTS

 

	
  Article 1

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 2

  	
  THE MERGER

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  The Merger

  	
   

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Conversion of Company
  Preferred Stock

  	
   

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  Mechanics of Exchange

  	
   

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Escrow Fund

  	
   

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  Dissenting Stockholders

  	
   

  
	
   

  	
   

  	
   

  
	
  2.7

  	
  Dividends

  	
   

  
	
   

  	
   

  	
   

  
	
  2.8

  	
  Withholding Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  2.9

  	
  Additional Action

  	
   

  
	
   

  	
   

  	
   

  
	
  2.10

  	
  No Further Rights of Transfers

  	
   

  
	
   

  	
   

  	
   

  
	
  2.11

  	
  Certificate of Incorporation
  of the Surviving Corporation

  	
   

  
	
   

  	
   

  	
   

  
	
  2.12

  	
  By-laws of the Surviving Corporation

  	
   

  
	
   

  	
   

  	
   

  
	
  2.13

  	
  Directors and Officers of the
  Surviving Corporation

  	
   

  
	
   

  	
   

  	
   

  
	
  2.14

  	
  Working Capital Adjustment

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 3

  	
  REPRESENTATIONS AND
  WARRANTIES OF THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Due Organization, Good Standing
  and Corporate Power

  	
   

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Authorization and Validity
  of this Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Capitalization

  	
   

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Consents and Approvals; No Violations

  	
   

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Company Financial Statements

  	
   

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  Absence of Certain Changes or
  Events

  	
   

  
	
   

  	
   

  	
   

  
	
  3.7

  	
  Title to
  Properties; Encumbrances

  	
   

  
	
   

  	
   

  	
   

  
	
  3.8

  	
  Compliance with Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  3.9

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  
	
  3.10

  	
  Employee Benefit Plans

  	
   

  
	
   

  	
   

  	
   

  
	
  3.11

  	
  Employment
  Relations and Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  3.12

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  3.13

  	
  Intellectual Property

  	
   

  

 

i

 

	
  3.14

  	
  Broker’s or Finder’s Fee

  	
   

  
	
   

  	
   

  	
   

  
	
  3.15

  	
  Certain Contracts
  and Arrangements

  	
   

  
	
   

  	
   

  	
   

  
	
  3.16

  	
  Environmental
  Laws and Regulations

  	
   

  
	
   

  	
   

  	
   

  
	
  3.17

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  3.18

  	
  Working
  Capital; Accounts Receivable

  	
   

  
	
   

  	
   

  	
   

  
	
  3.19

  	
  Inventories

  	
   

  
	
   

  	
   

  	
   

  
	
  3.20

  	
  Suppliers and
  Customers

  	
   

  
	
   

  	
   

  	
   

  
	
  3.21

  	
  Bank Accounts and
  Powers of Attorney

  	
   

  
	
   

  	
   

  	
   

  
	
  3.22

  	
  Disclosure

  	
   

  
	
   

  	
   

  	
   

  
	
  3.23

  	
  Related Party Transactions

  	
   

  
	
   

  	
   

  	
   

  
	
  3.24

  	
  Non-Disclosure Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  3.25

  	
  Right to Sell and
  Supply Products

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 4

  	
  REPRESENTATIONS
  AND WARRANTIES OF PARENT AND SUB

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Due Organization,
  Good Standing and Corporate Power

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Authorization and
  Validity of Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Capitalization;
  Issuance of Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  Consents and
  Approvals; No Violations

  	
   

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  Commission
  Documents; Securities Law Compliance

  	
   

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Parent Financials

  	
   

  
	
   

  	
   

  	
   

  
	
  4.7

  	
  Broker’s or Finder’s Fee

  	
   

  
	
   

  	
   

  	
   

  
	
  4.8

  	
  Ownership of
  Sub and Sub’s Operations

  	
   

  
	
   

  	
   

  	
   

  
	
  4.9

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  
	
  4.10

  	
  Absence of Certain
  Changes or Events

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 5

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Access to
  Information Concerning Properties and Records

  	
   

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Conduct of
  the Business of the Company Pending the Closing Date

  	
   

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Company
  Stockholders’ Approval

  	
   

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Commercially
  Reasonable Efforts

  	
   

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  Notification of
  Certain Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  Stock Option and Other
  Plans

  	
   

  

 

ii

 

	
  5.7

  	
  Company Warrants

  	
   

  
	
   

  	
   

  	
   

  
	
  5.8

  	
  Public Announcements

  	
   

  
	
   

  	
   

  	
   

  
	
  5.9

  	
  Registration

  	
   

  
	
   

  	
   

  	
   

  
	
  5.10

  	
  Financial Statements

  	
   

  
	
   

  	
   

  	
   

  
	
  5.11

  	
  Employee and
  Employee Benefits Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  5.12

  	
  NASDAQ Listing

  	
   

  
	
   

  	
   

  	
   

  
	
  5.13

  	
  Acquisition Proposals

  	
   

  
	
   

  	
   

  	
   

  
	
  5.14

  	
  COC Incentive Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 6

  	
  CONDITIONS
  PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Conditions
  Precedent to Each Party’s Obligation to Effect the Merger

  	
   

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Additional
  Conditions to Obligations of the Company

  	
   

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Additional
  Conditions to the Obligations of Parent and Sub

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 7

  	
  TERMINATION
  AND ABANDONMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Effect of Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 8

  	
  THE REPRESENTATIVE

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Representative
  of the Company Preferred Stockholders and COC Recipients; Power of Attorney

  	
   

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Actions of the
  Representative

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 9

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  Indemnification
  Procedure

  	
   

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  Payment of Claims

  	
   

  
	
   

  	
   

  	
   

  
	
  9.5

  	
  Third-Party Claims

  	
   

  
	
   

  	
   

  	
   

  
	
  9.6

  	
  Limitations of
  Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  9.7

  	
  Indemnification for
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  9.8

  	
  Exclusive Remedy

  	
   

  
	
   

  	
   

  	
   

  
	
  9.9

  	
  Characterization
  of Indemnity Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 10

  	
  MISCELLANEOUS

  	
   

  

 

iii

 

	
  10.1

  	
  Fees and Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  10.2

  	
  Representations
  and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  Extension; Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  10.4

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  10.5

  	
  Entire Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  10.6

  	
  Binding Effect;
  Benefit; Assignment

  	
   

  
	
   

  	
   

  	
   

  
	
  10.7

  	
  Amendment and Modification

  	
   

  
	
   

  	
   

  	
   

  
	
  10.8

  	
  Further Actions

  	
   

  
	
   

  	
   

  	
   

  
	
  10.9

  	
  Headings

  	
   

  
	
   

  	
   

  	
   

  
	
  10.10

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  10.11

  	
  Facsimile Signatures

  	
   

  
	
   

  	
   

  	
   

  
	
  10.12

  	
  Applicable Law; Waiver
  of Jury Trial

  	
   

  
	
   

  	
   

  	
   

  
	
  10.13

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  10.14

  	
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Escrow Agreement

  	
   

  
	
  Exhibit B

  	
  Form of Opinion of Counsel to Parent

  	
   

  
	
  Exhibit C

  	
  Form of Opinion of Counsel to the
  Company

  	
   

  
	
  Exhibit D

  	
  Form of Stockholders Questionnaire

  	
   

  
	
  Exhibit E

  	
  Cashed Company Preferred Stockholders

  	
   

  
	
  Exhibit F

  	
  COC Stock Payments and COC Cash Payments

  	
   

  

 

iv

 

AGREEMENT
AND PLAN OF MERGER

 

AGREEMENT AND PLAN OF MERGER, dated as of November 22,
2005 (this “Agreement”), by and among CLICK COMMERCE, INC., a
corporation organized under the laws of Delaware (“Parent”), REQUISITE
ACQUISITION INC., a corporation organized under the laws of Delaware and an
indirect wholly-owned subsidiary of Parent (“Sub”), REQUISITE
TECHNOLOGY, INC., a corporation organized under the laws of Delaware (the “Company”),
and Thomas G. Washing, solely in the capacity of representative of the Company
Stockholders and COC Recipients and not in a personal capacity (the “Representative”).  Parent, Sub, the Company and the
Representative are herein referred to collectively as the “Parties” and
individually as a “Party.”

 

W I  T  N  E  S  S
E  T  H:

 

WHEREAS, the Boards of Directors of Parent, Sub and
the Company have determined that the acquisition of the Company by Parent
pursuant to the Merger (as defined below) and on the terms and conditions set
forth in this Agreement is advisable and in the best interests of their
respective corporations and stockholders and consequently have approved the
Merger and this Agreement, in accordance with the Delaware General Corporation
Law (the “DGCL”); and

 

WHEREAS, in order to effectuate the foregoing, upon
the terms and subject to the conditions of this Agreement the acquisition will
be consummated through a merger of Sub with and into the Company, with the
Company being the surviving corporation (the “Merger”).

 

NOW, THEREFORE, in consideration of the premises and
of the mutual covenants, representations, warranties and agreements herein
contained, the Parties intending to be legally bound, agree as follows:

 

ARTICLE 1

DEFINITIONS

 

1.1           Definitions.  When used in this Agreement, the following
terms have the respective meanings specified below (such meanings to be equally
applicable to both the singular and plural forms of the terms defined).

 

“Accredited Investor” means an “accredited
investor” as defined in Rule 501(a) of Regulation D, as amended,
under the Securities Act.

 

“Acquisition Proposal” has the meaning set
forth in Section 5.13(a).

 

“Adjustment
Amount” has the meaning set forth in Section 2.14(a).

 

“Affiliate”
of any Person means any Person directly or indirectly controlling, controlled
by, or under common control with, such Person; provided, that for the
purposes of this definition, “control” (including with correlative meanings,
the terms “controlled by” and “under common control with”), as used with
respect to any Person, shall mean the possession, directly or

 

 

indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or partnership interests, by
contract or otherwise.

 

“Agreement”
has the meaning set forth in the preamble hereto.

 

“Allowed Delay”
has the meaning set forth in Section 5.9(i).

 

“Alternative
Efforts” has the meaning set forth in Section 5.13(a).

 

“Business Day” means any day except a Saturday,
a Sunday or any other day on which commercial banks are required or authorized
to close in Chicago, Illinois.

 

“Balance Sheet Date” has the meaning set forth
in Section 3.5(b).

 

“Cash Escrow Fund” has the meaning set forth in
Section 2.5.

 

“Cash Merger Consideration” means the cash to
be received by the Cashed Company Preferred Stockholders identified on Exhibit E
(which exhibit shall be prepared immediately prior to Closing) as receiving
cash consideration in the Merger.

 

“Cashed Company Preferred Stockholders” means
those Company Preferred Stockholders identified on Exhibit E as
receiving cash consideration in the Merger.

 

“Certificate of Merger” has the meaning set
forth in Section 2.1(a).

 

“Certificates” means the stock certificates representing
the Company Stock.

 

“Claim Notice” has the meaning set forth in Section 9.3.

 

“Closing” has the meaning set forth in Section 2.2.

 

“Closing Date” has the meaning set forth in Section 2.2.

 

“Closing Date Working Capital” means the
working capital of the Company as of the Effective Time determined in
accordance with Section 2.14 and by applying the accounting principles,
policies and practices set forth on Schedule 2.14.

 

“COC Acceptance Form” has the meaning set forth
in Section 5.14.

 

“COC Cash Payments” means the cash payments to
be received by the COC Cash Recipients identified on Exhibit F as
receiving COC Cash Payments.

 

“COC Cash Recipients” means those Company
employees identified on Exhibit F as receiving COC Cash Payments.

 

“COC Incentive Payments” has the meaning set
forth in Section 3.11(b).

 

“COC Recipients” means the COC Cash Recipients
and the COC Stock Recipients.

 

2

 

“COC Stock Payments” means the number of shares
of Parent Common Stock equal to (a) the dollar value of the stock payments
to be received by the COC Stock Recipients identified on Exhibit F
as receiving COC Stock Payments, (b) divided by the Market Price, rounded
down to the next whole share of Parent Common Stock.

 

“COC Stock Recipients” means those Company
employees identified on Exhibit F as receiving COC Stock Payments.

 

“COC Tax” has the meaning set forth in Section 3.11(b).

 

“Code” means the United States Internal Revenue
Code of 1986, as amended, and the regulations promulgated and the rulings
issued thereunder.

 

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

 

“Company” has the meaning set forth in the
preamble of this Agreement.

 

“Company Charter” means the Company’s
Certificate of Incorporation, as amended and in effect as of the date hereof.

 

“Company COC Tax” has the meaning set forth in Section 3.11(b).

 

“Company COC Withholding” has the meaning set
forth in Section 3.11(b).

 

“Company Common Stock” means the fully paid and
non-assessable shares of common stock, par value $0.001 per share, of the
Company.

 

“Company Disclosure Letter” means that
disclosure letter prepared and delivered by the Company to Parent and Sub prior
to entering into this Agreement.

 

“Company Indemnitees” has the meaning set forth
in Section 9.2(b).

 

“Company Options” mean outstanding stock
options and other rights (other than the Company Warrants) exercisable or
exchangeable for, or convertible into, Company Stock heretofore granted or
issued under any of the Company Option Plans or otherwise.

 

“Company Option Plans” means all incentive
stock option, stock option and stock issuance plans of the Company.

 

“Company Preferred Stock” means the fully paid
and non-assessable shares of Series A Stock, Series B Stock, Series C
Stock, Series D Stock, Series E Stock and Series F Stock.

 

“Company Preferred Stockholders” means the
holders of shares of the Company Preferred Stock.

 

“Company Property” means any real property and
improvements owned (directly, indirectly, or beneficially), leased, used,
operated or occupied by the Company or its Subsidiaries.

 

3

 

“Company Stock” means, in aggregate, the
Company Common Stock and the Company Preferred Stock.

 

“Company Stockholders” means the holders of
shares of Company Stock.

 

“Company Stockholders’ Meeting” has the meaning
set forth in Section 5.3.

 

“Company Transaction Expenses” means the fees
and expenses of third-party accountants, attorneys and other professionals,
advisors, brokers or finders incurred by the Company and the Company
Stockholders with respect to this Agreement, the due diligence performed with
respect thereto and the transactions contemplated hereby, and which are
included as a liability for purposes of determining the Closing Date Working
Capital under this Agreement, but shall not include any fees and expenses for
auditors incurred by Parent after the Effective Time in connection with any
filings it makes with the Commission, including the Registration Statement or a
Form 8-K filed in connection with the Merger or the Registration
Statement, except to the extent such fees and expenses relate to the re-audit
(or re-review) of previously audited (or reviewed) financial statements of the
Company.

 

“Company Warrants” means the warrants to
purchase Company Stock listed on Section 3.3(a) of the Company
Disclosure Letter.

 

“Confidentiality Agreement” means that certain
Confidentiality Agreement by and between Parent and the Company dated August 3,
2005.

 

“Continuing Employees” has the meaning set
forth in Section 5.11.

 

“Contracts” has the meaning set forth in Section 3.15.

 

“Control” means direct ownership of stock
possessing at least eighty percent (80%) of the total combined voting power of
all classes of stock entitled to vote and at least eighty percent (80%) of the
total number of shares of each other class of stock of any corporation, provided,
that a Person is not considered to own voting stock if a third-party, other
than an agent of such Person, has the right to vote or control the voting of
such stock.

 

“D&O Insurance” means directors’ and
officers’ insurance.

 

“DGCL” means the General Corporation Law of
Delaware.

 

“Disclosed Severance Obligation” means any
severance or similar obligation of the Company disclosed on the Company
Disclosure Letter.

 

“Dissenting Stockholders” has the meaning set
forth in Section 2.6.

 

“Effective Time” has the meaning set forth in Section 2.1(a).

 

“Employee Benefit Plans” has the meaning set
forth in Section 3.10(a).

 

“End Date” has the meaning set forth in Section 7.1(b).

 

4

 

“Environmental Law” means any Law relating to
the protection of the environment, or to the manufacture, use, transport,
treatment, storage, disposal, release or threatened release of petroleum
products, asbestos, urea formaldehyde insulation, polychlorinated biphenyls or
any substance listed, classified or regulated as hazardous or toxic under such
Environmental Law.

 

“ERISA” has the meaning set forth in Section 3.10(a).

 

“Escrow Agent” means the escrow agent under the
Escrow Agreement.

 

“Escrow Agreement” means the Escrow Agreement
among Parent, the Company, the Representative and the Escrow Agent,
substantially in the form of Exhibit A.

 

“Escrow Fund” has the meaning set forth in Section 2.5.

 

“Escrow Release Date” has the meaning set forth
in Section 2.5.

 

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

 

“Excess Claims” has the meaning set forth in Section 9.6(a)(ii).

 

“FY04 Audited Financial Statements” has the
meaning set forth in Section 3.5(a).

 

“GAAP” means generally accepted accounting
principles in the United States of America, as in effect from time to time.

 

“Governmental Entity” means any domestic or
foreign court, arbitral tribunal, administrative agency or commission or other
governmental or regulatory agency or authority or any securities exchange.

 

“Immigration Laws” has the meaning set forth in
Section 3.11.

 

“Indebtedness” means all obligations of the
Company for borrowed money (including any overdraft), any debenture, bond, note
or other similar instrument; any receivable sold or discounted (otherwise than
on a non-recourse basis); the purchase price of any asset or service to the extent
payable by the Company or its Subsidiaries after the time of sale or delivery
to the Company or its Subsidiaries, where the deferred payment is arranged as a
method of raising finance or paid more than six months after the sale or
delivery date; any finance lease, credit sale or conditional sale agreement; or
any guarantee of the foregoing types of indebtedness of any Person.

 

“Indemnified Party” has the meaning set forth
in Section 9.3(a).

 

“Indemnifying Party” has the meaning set forth
in Section 9.3(a).

 

“Intellectual Property” means any U.S. and
non-U.S. (i) patents and patent applications, (ii) registered and
unregistered trademarks, service marks and other indicia of origin, pending
trademark and service mark registration applications, and intent-to-use
registrations or similar

 

5

 

reservations of marks, (iii) registered
and unregistered copyrights and mask works, and applications for registration
thereof, (iv) internet domain names, applications and reservations
therefor, uniform resource locators and the corresponding Internet sites, (v) software,
including source codes, object codes, computer software programs, databases,
data collections and other similar items, (vi) trade secrets and
proprietary information not otherwise listed in (i) through (v) above,
including unpatented inventions, invention disclosures, moral and economic
rights of authors and inventors (however denominated), confidential
information, technical data, customer lists, corporate and business names,
trade names, trade dress, brand names, know-how, formulae, methods (whether or
not patentable), designs, processes, procedures, technology, and other
proprietary information or material of any type, and all derivatives,
improvements and refinements thereof, howsoever recorded, or unrecorded and (vi) any
goodwill associated with any of the foregoing.

 

“IRS” means the United States Internal Revenue
Service or any successor entity thereof.

 

“Knowledge” means, when referring to
the Company, the actual knowledge of Larry Lenhart, Susan Oakes, Steve Fuhrman,
Dave Bandi, Jim Pachak, Mike Paschal or Neil Hartley, and when referring to
Parent, the actual knowledge of Michael W. Ferro, Jr., Michael W. Nelson,
John Tuhey, Nancy Koenig or Steve Cole.

 

“Law” means any federal, state, local or
foreign law, statute, rule, regulation, ordinance, standard, requirement,
administrative ruling, order or process or administrative interpretation
thereof and any court or arbitrator’s ruling, order or process.

 

“Lien” has the meaning set forth in Section 3.3.

 

“Losses” has the meaning set forth in Section 9.2(a).

 

“Market Price” for purposes of this Agreement means
$23.10427 per share of Parent Common Stock.

 

“Material Adverse Effect” with respect to any
Person, means any event, change, occurrence, effect, violation or circumstance
that has had, or is reasonably likely to have, a material adverse effect on (i) the
ability of such Person to perform its obligations under this Agreement or any
of the other Transaction Documents or to consummate the transactions
contemplated hereby or thereby on a timely basis or (ii) the assets,
business, liabilities, results of operations or condition (financial or
otherwise) of such Person and its Subsidiaries, taken as a whole, except that
none of the following shall be deemed in themselves to constitute a Material
Adverse Effect (a) any changes in laws, rules or regulations of
general applicability or interpretations thereof by Governmental Entities that
do not disproportionately affect the Person or any of its Subsidiaries, (b) any
changes in general economic conditions that do not disproportionately affect
the Person or any of its Subsidiaries, (c) any changes in the industry in
which the Person operates that do not disproportionately affect the Person or
any of its Subsidiaries, and (d) any changes resulting from the taking of
any actions required by this Agreement; provided, however, that
in determining whether a Material Adverse Effect in respect of the Company has
occurred, the effect of any loss of customers by the Company or its

 

6

 

Subsidiaries as a result of any
announcement or disclosure of the transactions contemplated hereby will not be
considered.

 

“Material Contracts” has the meaning set forth
in Section 3.15.

 

“Merger” has the meaning set forth in the third
recital of this Agreement.

 

“Merger Consideration” means, upon consummation
of the Merger, the consideration, if any, which a Company Stockholder shall be
entitled to receive pursuant to the terms of Section 2.3.

 

“Most Recent Balance Sheet” has the meaning set
forth in Section 3.5(b).

 

“Multiemployer Plan” means a “multiemployer
pension plan” (as defined in Section 4001(a)(3) of ERISA) or subject
to Section 302 of ERISA.

 

“NLRB” has the meaning set forth in Section 3.11.

 

“Objection Notices” has the meaning set forth
in Section 9.3(b).

 

“Open Source Code” has the meaning set forth in
Section 3.13(i).

 

“Ownership Representations” has the meaning set
forth in Section 9.6(a)(ii).

 

“Parent” has the meaning set forth in the
preamble hereto.

 

“Parent Commission Filings” means any forms,
reports, schedules, statements, registration statements and other documents
filed by Parent or its Subsidiaries pursuant to the federal securities laws and
the Commission’s rules and regulations, including those filed after the
date hereof.

 

“Parent Common Stock” means the common stock,
par value $0.001 per share, of Parent.

 

“Parent Disclosure Letter” means that
disclosure letter prepared and delivered by Parent and Sub to the Company prior
to entering into this Agreement.

 

“Parent Financials” has the meaning set forth
in Section 4.5.

 

“Parent Indemnitees” has the meaning set forth
in Section 9.2(a).

 

“Parent Stockholders” means the holders of Parent
Common Stock.

 

“Participating Company Preferred Stockholders”
means those Company Preferred Stockholders identified on Exhibit E
as receiving stock consideration in the Merger.

 

“Party” and “Parties” have the meanings
set forth in the preamble of this Agreement.

 

“PBGC” means Pension Benefit Guaranty
Corporation.

 

7

 

“Permit” has the meaning set forth in Section 3.8(b).

 

“Permitted Liens” means (i) Liens for
taxes not yet due and payable, (ii) statutory Liens of landlords, (iii) Liens
of carriers, warehousemen, mechanics, materialmen and repairmen incurred in the
ordinary course of business consistent with past practice and not yet
delinquent and (iv) in the case of real property, zoning, building or
other restrictions, variances, covenants, rights of way, encumbrances,
easements and other minor irregularities in title, none of which, individually
or in the aggregate, (A) interfere in any material respect with the
present use or occupancy of the affected parcel by the Company, (B) have
more than an immaterial effect on the value thereof or its use or (C) would
impair the ability of such parcel to be sold for its present use.

 

“Permitted Transfer” means the transfer of
Parent Common Stock by a Company Stockholder (i) if such Company
Stockholder is a corporation, partnership or limited liability company, to a
director, officer, partner, manager or member thereof, or to an entity
controlling, controlled by or under common control with such Company
Stockholder and (ii) if such Company Stockholder is a natural person, to
such Company Stockholder’s parent, sibling, spouse, or the descendants of any
of them, or to an entity formed by or for the benefit of such Company
Stockholder or such relatives; provided, that the transferee agrees to
be bound by the transfer restrictions contained in Section 2.4(e).

 

“Person” means and includes an individual, a
partnership, a limited liability partnership, a joint venture, a corporation, a
limited liability company, a trust, an unincorporated organization, a group and
a Governmental Entity.

 

“Pre-Closing Period” has the meaning set forth
in Section 3.12(b).

 

“Registrable Holder” has the meaning set forth
in Section 5.9(a).

 

“Registration Statement” has the meaning set
forth in Section 5.9(a).

 

“Representative” has the meaning set forth in
the preamble.

 

“Resolved Claims” has the meaning set forth in Section 9.3(c).

 

“Returns” has the meaning set forth in Section 3.12(a).

 

“Section 5.9 Indemnified Party” has the
meaning set forth in Section 5.9(f).

 

“Section 5.9 Indemnifying Party” has the
meaning set forth in Section 5.9(f).

 

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

 

“Separate Financial Statements” has the meaning
set forth in Section 3.5(a).

 

“Series A Stock” means the shares of Series A
Preferred Stock, par value $0.001 per share, of the Company.

 

8

 

“Series B Stock” means the shares of Series B
Preferred Stock, par value $0.001 per share, of the Company.

 

“Series C Stock” means the shares of Series C
Preferred Stock, par value $0.001 per share, of the Company.

 

“Series D Stock” means the shares of Series D
Preferred Stock, par value $0.001 per share, of the Company.

 

“Series E Stock” means the shares of Series E
Preferred Stock, par value $0.001 per share, of the Company.

 

“Series F Stock” means the shares of Series F
Preferred Stock, par value $0.001 per share, of the Company.

 

“Statement of Adjustment Amount” has the
meaning set forth in Section 2.14(b).

 

“Stock Escrow Fund” has the meaning set forth
in Section 2.5.

 

“Stock Merger Consideration” means that number
of shares of Parent Common Stock equal to (a) the Total Transaction
Consideration, less (i) the aggregate of all the COC Cash Payments and (ii) the
Cash Merger Consideration, (b) divided by the Market Price, and, for each
Participating Company Preferred Stockholder or COC Stock Recipient, rounded
down to the next whole share of Parent Common Stock.

 

“Straddle Period” has the meaning set forth in Section 9.7(b).

 

“Stub Unaudited Financial Statements” has the
meaning set forth in Section 3.5(b).

 

“Sub” has the meaning set forth in the preamble
hereto.

 

“Subsidiary,” with respect to any Person, means
and includes (i) any partnership of which such Person or any of its
Subsidiaries is a general partner or (ii) any other entity in which such
Person or any of its Subsidiaries owns or has the power to vote fifty percent
(50%) or more of the equity interests in such entity having general voting
power to participate in the election of the governing body of such entity.

 

“Superior Acquisition Proposal” has the meaning
set forth in Section 5.13(b).

 

“Surviving Corporation” has the meaning set
forth in Section 2.1(b).

 

“Taxes” has the meaning set forth in Section 3.12(a).

 

“Terminated Company Employees” has the meaning
set forth in Section 5.11(a).

 

“Total Transaction Consideration” means,
subject to adjustment pursuant to Section 2.14, $19,500,000.

 

“Transaction Documents” means this Agreement
and the Escrow Agreement.

 

9

 

“Transfer” has the meaning set forth in Section 2.4(c).

 

“VEBAs” has the meaning set forth in Section 3.10(a).

 

“WARN” has the meaning set forth in Section 3.11.

 

“Working Capital Target Amount” means $6,630,000
calculated in accordance with the accounting principles, policies and practices
set forth on Schedule 2.14.

 

ARTICLE 2

THE MERGER

 

2.1           The Merger.

 

(a)           Upon
the terms and subject to the conditions of this Agreement, at the Closing, a
certificate of merger (the “Certificate of Merger”) shall be duly
prepared, executed and acknowledged by Sub and the Company in accordance with
the DGCL and shall be filed with the Secretary of State of Delaware in
accordance with the provisions of the DGCL. 
The Merger shall become effective upon the filing of the Certificate of
Merger (or at such later time reflected in such Certificate of Merger as shall
be agreed to by Parent and the Company). 
The date and time when the Merger shall become effective is hereinafter
referred to as the “Effective Time.”

 

(b)           Upon
the terms and subject to the conditions set forth in this Agreement and in
accordance with the DGCL, at the Effective Time, Sub shall be merged with and
into the Company, and the separate corporate existence of Sub shall cease, and
the Company shall continue as the surviving corporation under the laws of the
State of Delaware (the “Surviving Corporation”).

 

(c)           From
and after the Effective Time, the Merger shall have the effects set forth in Section 259(a) of
the DGCL.

 

2.2           Closing. 
Unless this Agreement shall have been terminated and the transactions
contemplated hereby shall have been abandoned pursuant to Article 7, and
subject to the satisfaction or waiver of the conditions set forth in Article 6,
the closing of the Merger (the “Closing”) shall take place at 10:00 a.m.
Central Standard Time at the offices of McDermott, Will & Emery LLP,
227 West Monroe Street, Chicago, IL 
60606, on November 22, 2005, or at such other date, time or place
as the Parties shall agree in writing. 
Such date is herein referred to as the “Closing Date”.

 

2.3           Conversion of Company
Preferred Stock.

 

(a)           Subject
to Sections 2.3(f), 2.4, 2.5 and 2.6 at the Effective Time, by virtue of the
Merger and without any further action on the part of Parent, Sub, the Company
or any Company Preferred Stockholder:

 

10

 

(i)    each
share of Series A Stock outstanding immediately prior to the Effective
Time held by a Participating Company Preferred Stockholder shall be converted
into the right to receive 0.00861 shares of Parent Common Stock.  Ninety percent (90%) of such Stock Merger
Consideration shall be issued to such Stockholder at the Effective Time and the
remaining ten percent (10%) shall be
deposited into the Stock Escrow Fund established pursuant to Section 2.5.  The shares so deposited into the Stock Escrow
Fund shall be paid to such Stockholders,
if and when such Parent Common Stock becomes distributable from the Stock
Escrow Fund to such Stockholders in accordance with the terms of this Agreement
and the Escrow Agreement;

 

(ii)   each
share of Series B Stock outstanding immediately prior to the Effective
Time held by a Participating Company Preferred Stockholder shall be converted
into 0.01155 shares of Parent Common Stock. 
Ninety percent (90%) of such Stock Merger Consideration shall be issued
to such Stockholder at the Effective Time and the remaining ten percent (10%) shall be deposited into the
Stock Escrow Fund established pursuant to Section 2.5.  The shares so deposited into the Stock Escrow
Fund shall be paid to such Stockholders,
if and when such Parent Common Stock becomes distributable from the Stock
Escrow Fund to such Stockholders in accordance with the terms of this Agreement
and the Escrow Agreement;

 

(iii)  each
share of Series C Stock outstanding immediately prior to the Effective
Time held by a Participating Company Preferred Stockholder shall be converted
into 0.01467 shares of Parent Common Stock. 
Ninety percent (90%) of such Stock Merger Consideration shall be issued
to such Stockholder at the Effective Time and the remaining ten percent (10%) shall be deposited into the
Stock Escrow Fund established pursuant to Section 2.5.  The shares so deposited into the Stock Escrow
Fund shall be paid to such Stockholders,
if and when such Parent Common Stock becomes distributable from the Stock
Escrow Fund to such Stockholders in accordance with the terms of this Agreement
and the Escrow Agreement;

 

(iv)  each
share of Series D Stock outstanding immediately prior to the Effective
Time held by a Participating Company Preferred Stockholder shall be converted
into 0.02086 shares of Parent Common Stock. 
Ninety percent (90%) of such Stock Merger Consideration shall be issued
to such Stockholder at the Effective Time and the remaining ten percent (10%) shall be deposited into the
Stock Escrow Fund established pursuant to Section 2.5.  The shares so deposited into the Stock Escrow
Fund shall be paid to such Stockholders,
if and when such Parent Common Stock becomes distributable from the Stock
Escrow Fund to such Stockholders in accordance with the terms of this Agreement
and the Escrow Agreement;

 

(v)   each
share of Series E Stock outstanding immediately prior to the Effective
Time held by a Participating Company Preferred Stockholder shall be converted
into 0.05423 shares of Parent Common Stock. 
Ninety percent (90%) of such Stock Merger Consideration shall be issued
to such Stockholder at the Effective Time and the remaining ten percent (10%) shall be deposited into the
Stock Escrow Fund established pursuant to Section 2.5.  The shares so deposited into the Stock Escrow
Fund shall be paid to such Stockholders,
if and when such Parent Common Stock becomes distributable from the Stock
Escrow Fund to such Stockholders in accordance with the terms of this Agreement
and the Escrow Agreement;

 

11

 

(vi)  each
share of Series F Stock outstanding immediately prior to the Effective
Time held by a Participating Company Preferred Stockholder shall be converted
into 0.08412 shares of Parent Common Stock. 
Ninety percent (90%) of such Stock Merger Consideration shall be issued
to such Stockholder at the Effective Time and the remaining ten percent (10%) shall be deposited into the
Stock Escrow Fund established pursuant to Section 2.5.  The shares so deposited into the Stock Escrow
Fund shall be paid to such Stockholders,
if and when such Parent Common Stock becomes distributable from the Stock
Escrow Fund to such Stockholders in accordance with the terms of this Agreement
and the Escrow Agreement; and

 

(vii) each share of the Company Preferred Stock issued and outstanding
immediately prior to the Effective Time held by a Cashed Company Preferred
Stockholder shall be converted into cash as follows: Series A Stock,
$0.19900; Series B Stock, $0.26681; Series C Stock, $0.33904, Series D
Stock, $0.48203; Series E Stock, $1.25299; and Series F Stock,
$1.94360.  With respect to each Cashed
Company Preferred Stockholder, ninety percent (90%) of the aggregate
Cash Merger Consideration to which such Cashed Company Preferred Stockholder is
entitled shall be paid to such
Stockholder at the Effective Time and the remaining ten percent (10%) of the aggregate Cash Merger Consideration to
which such Cashed Company Preferred Stockholder is entitled shall be deposited into the Cash Escrow Fund
established pursuant to Section 2.5.  The cash so deposited into the Cash Escrow
Fund shall be paid to such Cashed Company Preferred Stockholders, if and when such cash becomes distributable
from the Cash Escrow Fund to such Cashed Company Preferred Stockholders in
accordance with the terms of this Agreement and the Escrow Agreement.

 

(b)           Cancellation
of Company Common Stock.  Subject to
the provisions of Section 2.6, each share of Company Common Stock issued
and outstanding immediately prior to the Effective Time (other than shares held
by Dissenting Stockholders and shares held in the Company’s treasury), shall be
canceled, retired and cease to exist without payment of any consideration
therefor.

 

(c)           Cancellation
of Company Options and Warrants.  At
the Effective Time, each issued, outstanding and unexercised Company Option to
purchase or otherwise acquire Company Common Stock (whether or not vested)
shall be cancelled and terminated without payment of any consideration therefor
in accordance with Section 5.6, and any unexercised Company Warrants
issued by the Company shall be terminated in accordance with Section 5.7.

 

(d)           Cancellation
of Treasury Stock.  Each share of
Company Stock held in the Company’s treasury immediately prior to the Effective
Time shall be canceled, retired and cease to exist.

 

(e)           Conversion
of Sub Common Stock.  Each share of
common stock of Sub issued and outstanding immediately prior to the Effective
Time shall be converted into and thereafter evidence one fully paid and
non-assessable share of common stock of the Surviving Corporation.

 

(f)            Rounding;
No Fractional Shares.  No
certificates or scrip representing fractional shares of Parent Common Stock
shall be issued to Company Stockholders upon conversion of Company Stock into
shares of Parent Common Stock in the Merger. 
Instead, the

 

12

 

number of shares of Parent
Common Stock to which a Company Stockholder is entitled pursuant to this
Agreement at the Effective Time and upon each distribution of shares of Parent
Common Stock from the Escrow Fund, if any, shall be aggregated with all shares
of Parent Common Stock to which such Company Stockholder is entitled at such
time and then rounded down to the next whole share of Parent Common Stock.

 

2.4           Mechanics of Exchange.

 

(a)           At
the Effective Time, each Company Preferred Stockholder will be entitled to
receive and, upon surrender to Parent of one or more Certificates representing
the Company Preferred Stock held by such Company Preferred Stockholder and a
duly executed letter of transmittal as described below, Parent shall be
obligated, as soon as reasonably practicable (and in any event no later than
ten (10) Business Days) after receipt of such Certificates and executed
letters of transmittal, to deliver certificates representing that number of
shares of Parent Common Stock into which the shares of Company Preferred Stock
held by such Company Preferred Stockholder are converted pursuant to Section 2.3.  Any shares of Parent Common Stock into which
the shares of Company Preferred Stock convert in the Merger shall be deemed to
have been issued at the Effective Time.

 

(b)           As
soon as reasonably practicable (and in any event no later than two (2) Business
Days) after the Effective Time, Parent shall mail to each holder of record of
Company Stock entitled to receive Merger Consideration hereunder:

 

(i)            a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss to the Certificates, as appropriate, shall pass, only upon
delivery of such Certificates to Parent and shall contain reasonable
representations as to the Company Preferred Stockholder’s title to the shares
represented by such Certificates), and

 

(ii)           instructions
for use in effecting the surrender of the Certificates, as appropriate, in
exchange for certificates evidencing shares of Parent Common Stock.

 

(c)           In
the event that any Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such Certificate
to be lost, stolen or destroyed, Parent will issue or cause to be issued in
exchange for such lost, stolen or destroyed Certificate the shares of Parent
Common Stock into which the shares of Company Preferred Stock represented by
such Certificate may be converted in accordance with Section 2.3.  When authorizing such issuance in exchange
therefor, Parent may require the owner of such lost, stolen or destroyed
Certificate to give Parent such form of indemnity, as Parent shall reasonably
direct, against any claim that may be made against Parent with respect to the
Certificate alleged to have been lost, stolen or destroyed.

 

(d)           Parent
may, at its option, meet its obligations under this Section 2.4 through
its transfer agent or other bank selected by Parent to act as exchange agent in
connection with the Merger.

 

(e)           By
tendering its shares of Company Preferred Stock and by accepting the
consideration set forth in Section 2.3, each Company Preferred Stockholder
shall be deemed to have agreed: (i) to the appointment of the
Representative as representative of the Company

 

13

 

Preferred Stockholders in accordance with the terms of Article 8, (ii) to
the indemnification provisions of Article 9, (iii) that, in
accordance with Section 2.5, Parent will place into escrow a portion of
the Stock Merger Consideration deliverable to such Company Preferred
Stockholder subject to and for the purpose of securing the Company Preferred
Stockholders’ indemnity obligations under this Agreement, (iv) that the
Stock Merger Consideration deliverable to such Company Preferred Stockholder
pursuant to this Agreement shall not be sold, transferred, pledged, disposed of
or encumbered (each, a “Transfer”) (except for Permitted Transfers) for
the period beginning on the Closing Date and ending, on the date falling ninety
(90) days after the Effective Time, and (v) that each certificate representing
shares of Parent Common Stock constituting the Stock Merger Consideration shall
bear appropriate legends referring to such restrictions and to any restrictions
on transfer under applicable securities laws.

 

2.5           Escrow Fund.  At the Effective Time, Parent shall deliver
to the Escrow Agent (i) that number of shares of Parent Common Stock
required to be deposited into escrow in accordance with Section 2.3 or Section 5.14
(the shares described in this clause, including all dividends, distributions or
earnings attributable thereto, collectively, the “Stock Escrow Fund”)
and (ii) that amount of cash 
required to be deposited into escrow in accordance with Section 2.3
or Section 5.14 (the “Cash Escrow Fund”, and together with the
Stock Escrow Fund, the “Escrow Fund”) subject to the Escrow Agreement
for the purpose of securing the Company Preferred Stockholders’ and COC
Recipients’ indemnity obligations under this Agreement.  In accordance with the terms of the Escrow
Agreement, on the date that is 12 months after the Closing Date (or, if such
date is not a Business Day, the first Business Day thereafter) (the “Escrow
Release Date”), the Escrow Agent will allocate shares of Parent Common
Stock and cash or other assets remaining in the Escrow Fund, if any, among the
Company Preferred Stockholders and COC Recipients in accordance with Section 2.3
and deliver such shares and cash or other assets to them at the addresses
listed on the Company’s stock records or to an address or account designated by
any such Company Preferred Stockholder, COC Recipient or the Representative to
the Escrow Agent in writing.  Subject to
and in accordance with the terms of the Escrow Agreement, the Escrow Agent
shall withhold from delivery of the Escrow Fund (proportionately as to the Stock
Escrow Fund and the Cash Escrow Fund) the equivalent of any amounts then in
dispute relating to indemnification obligations arising under this Agreement, provided,
that the withheld amount, to the extent not applied in satisfaction of
indemnification obligations, shall be delivered to the Company Preferred
Stockholders and COC Recipients as described above promptly upon resolution of
such dispute.

 

2.6           Dissenting Stockholders.  Notwithstanding anything contained in this
Agreement to the contrary but only to the extent required by the DGCL, shares
of Company Stock that are issued and outstanding immediately prior to the
Effective Time and are held by Company 
Stockholders who comply with all the provisions of the DGCL concerning
the right of Company Stockholders to demand appraisal of their shares of
Company Stock in connection with the Merger (such holders, “Dissenting
Stockholders”) shall not be converted into the right to receive the Merger
Consideration, but shall only become convertible into the right to receive such
consideration as may be determined to be due such Dissenting Stockholder
pursuant to the law of the State of Delaware; provided, however,
that if any Dissenting Stockholder who demands appraisal of such Company
Stockholder’s shares of Company Stock under the DGCL shall effectively withdraw
or lose (through failure to perfect or otherwise) his or her right to
appraisal, then as of the Effective Time, or the occurrence of such event,
whichever occurs later, such

 

14

 

Company Stockholder’s shares of
Company Stock shall thereupon be deemed to have been converted as of the
Effective Time into the right to receive the Stock Merger Consideration or Cash
Merger Consideration, if any, to which such Company Stockholder would otherwise
be entitled pursuant to Section 2.3, without interest thereon, and such
Company Stockholder shall no longer be a Dissenting Stockholder.  The Company shall give Parent and Sub (x)
prompt notice of any written demands for appraisal, withdrawals of demands for
appraisal and any other related instruments received by the Company after the
date hereof and (y) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal. 
The Company shall not voluntarily make any payment with respect to any
demands for appraisal and shall not, except with the prior written consent of
Parent, settle or offer to settle any demand. 
Following the Effective Time, the Surviving Corporation shall, and
Parent shall cause the Surviving Corporation to, comply with the DGCL to
satisfy the obligations of the Company with respect to the Dissenting
Stockholders.

 

Notwithstanding anything in this Agreement to the
contrary, all defined terms used with respect to calculating the Merger
Consideration and allocating it among the Company Preferred Shareholders will
be reduced proportionately to reflect any shares held by Dissenting
Stockholders.

 

2.7           Dividends. 
No dividends or other distributions with respect to shares of Parent Common
Stock with a record date on or after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the Parent Common Stock
represented thereby by reason of the conversion of shares of Company Stock
pursuant to Section 2.3 until such Certificate is surrendered in
accordance with this Agreement or an affidavit of lost Certificate delivered in
accordance with Section 2.4(c). 
Subject to the effect of applicable laws, following surrender of any
such Certificate, there shall be paid, without interest, to the Person in whose
name the shares of Parent Common Stock represented by such Certificate are
registered at the time of such surrender, the proportionate amount of dividends
or other distributions with a record date after the Effective Time theretofore
paid with respect to shares of Parent Common Stock.

 

2.8           Withholding Rights.

 

(a)           Parent
shall be entitled to deduct and withhold from the consideration otherwise
payable to any Person pursuant to Article 2 and Section 5.14 such
amounts as it is required to deduct and withhold with respect to the making of
such payment under any provision of federal, state, local or foreign laws
relating to Taxes.  To the extent that
amounts are so withheld by Parent, such amounts shall be treated for all
purposes of this Agreement as having been paid to such Person in respect of
which such deduction and withholding was made by Parent, and Parent shall remit
such withheld amounts to the appropriate tax authorities.  Such withholding may be made from any
transfer of shares of Parent Common Stock otherwise required to be made
pursuant to Section 2.3.

 

(b)           Prior
to the Closing, the Company shall provide to Parent, as part of Section 3.11(b) of
the Company Disclosure Letter, the Company’s estimate of the aggregate federal,
state, local, foreign or other employment tax (i) required to be withheld
by Parent or the Surviving Corporation from the COC Incentive Payments (“Company
COC Withholding”), and (ii) payable by Parent and the Surviving
Corporation to federal, state, local, or foreign taxing

 

15

 

authorities with respect to any
COC Incentive Payments, but without regard to amounts withheld (“Company COC
Tax”, and together with the Company COC Withholding, the “COC Tax”).  Parent and the Surviving Corporation shall
pay to the federal, state, local, foreign or other taxing authority all COC
Tax, provided, that to the extent such payment includes Company COC
Withholding with respect to a COC Stock Payment, such withholding shall be made
from any transfer of shares of Parent Common Stock otherwise required to be
made pursuant to Section 5.14.  To
the extent that the aggregate amount of Company COC Tax actually paid by Parent
and the Surviving Corporation (other than amounts erroneously paid by Parent,
the Company or the Surviving Corporation, and other than amounts for which
payment is not required upon the filing of prescribed documentation or other
information) exceeds the aggregate amount set forth on Section 3.11(b) of
the Company Disclosure Letter, such excess shall be treated as a “Loss” for
purposes of Section 9.2(a).

 

(c)           The
parties agree that Merger Consideration delivered to the Escrow Agent for
deposit into the Escrow Fund shall not be subject to withholding until
subsequent distribution thereof, and that the portion of COC Incentive Payments
to be delivered to the Escrow Agent for deposit into the Escrow Fund shall be
subject to withholding on delivery thereof.

 

2.9           Additional Action.  The Surviving Corporation may, at any time
after the Effective Time, take any action, including executing and delivering
any document, in the name and on behalf of either or both of the Company and
Sub reasonably necessary in order to consummate the transactions contemplated
by this Agreement.

 

2.10         No Further Rights of Transfers.  At and after the Effective Time, each Company
Stockholder shall cease to have any rights as a stockholder of the Company,
except as provided herein or as otherwise required by applicable law.  At the Effective Time, the stock ledger of
the Company shall be closed, and no transfer of shares of Company Stock shall
thereafter be made.

 

2.11         Certificate of
Incorporation of the Surviving Corporation. 
The Certificate of Incorporation of the Company, as in effect
immediately before the Effective Time but to the extent amended by the
Certificate of Merger, shall be the Certificate of Incorporation of the
Surviving Corporation immediately after the Effective Time.

 

2.12         By-laws of the Surviving Corporation.  The By-laws of Sub, as in effect immediately
before the Effective Time, shall be the By-laws of the Surviving Corporation
immediately after the Effective Time.

 

2.13         Directors and Officers of the
Surviving Corporation.  The directors
of Sub immediately before the Effective Time shall be the directors of the
Surviving Corporation from and after the Effective Time, such directors to hold
office subject to the applicable provisions of the Certificate of Incorporation
and By-laws of the Surviving Corporation until their respective successors
shall be duly elected or appointed and qualified.  The officers of Sub immediately before the
Effective Time shall be the officers of the Surviving Corporation from and
after the Effective Time, such officers to hold office subject to the
applicable provisions of the Certificate of Incorporation and By-laws of the
Surviving Corporation until their respective successors shall be duly elected
or appointed and qualified.

 

16

 

2.14         Working Capital Adjustment. 

 

(a)           The
“Adjustment Amount” means the number obtained, whether positive or
negative, by starting with (a) the Closing Date Working Capital, as
determined pursuant to this Section 2.14, and subtracting (b) the
Working Capital Target Amount.

 

(b)           For
purposes of calculating the Adjustment Amount, within thirty (30) days after
the Closing Date, Parent shall prepare and deliver to the Representative a
statement (the “Statement of Adjustment Amount”) setting forth a
calculation of the Closing Date Working Capital determined by applying the
accounting principles, policies and practices set forth on Schedule 2.14.

 

(c)           The
Closing Date Working Capital shall become final and binding upon the parties on
the thirtieth (30th) day following delivery thereof, unless the Representative
gives written notice to Parent of the Company Stockholders’ disagreement with
the Closing Date Working Capital prior to such date, at which time the Closing
Date Working Capital shall only be final and binding upon the parties on final
resolution of such disagreement.  Any
notice of disagreement given by the Representative shall specify in reasonable
detail the nature of any disagreement so asserted.

 

(d)           If
the Adjustment Amount, calculated based on the Closing Date Working Capital as
finally agreed to by the Representative and Parent or as determined pursuant to
Section 2.14(f), is negative, then the Escrow Fund shall be reduced in
aggregate by the amount that the Working Capital Target Amount exceeds the
Closing Date Working Capital, with (1) shares of Parent Common Stock,
valued at the Market Price, reduced from the Stock Escrow Fund in proportion to
the Total Merger Consideration, (2) cash reduced from the Cash Escrow Fund
in proportion to the Total Merger Consideration, and (3) such cash and
Parent Common Stock shall be returned to Parent.  All reductions of the Stock Escrow Fund and
the Cash Escrow Fund pursuant to this Section 2.14(d) shall be made
on a proportionate basis as to the Company Preferred Stockholders’ and COC
Recipients’ interests therein.

 

(e)           If
the Adjustment Amount, calculated based on the Closing Date Working Capital as
finally agreed to by the Representative and Parent or as determined pursuant to
Section 2.14(f), is positive, then Parent shall deliver shares of Parent
Common Stock, valued at the Market Price, and cash to the Company Preferred
Stockholders and the COC Recipients, with an aggregate value equal to the
amount by which the Closing Date Working Capital exceeds the Working Capital
Target Amount.  In connection with a
distribution pursuant to this Section 2.14(e), a Company Preferred
Stockholder or COC Recipient shall receive the same type of consideration
(either Parent Common Stock or cash) as such Company Preferred Stockholder or
COC Recipient was entitled to at the Effective Time as set forth in Sections 2.3
or 5.14, as applicable, and such distribution of Parent Common Stock or cash to
Company Preferred Stockholders and COC Recipients shall be, in each case, in
proportion to their interest in the Total Merger Consideration at the Effective
Time; provided, however, that any Parent Common Stock or cash
delivered by Parent pursuant to this Section 2.14(e) shall be
delivered ninety percent (90%) to the Company Preferred Stockholders and COC
Recipients, as described above, and ten percent (10%) to the Escrow Agent to
hold in the Escrow Fund pursuant to Section 2.5.

 

17

 

(f)            If
the Representative and Parent are not able to resolve any dispute relating to
the Statement of Adjustment Amount within sixty (60) days after Representative’s
receipt of the Statement of Adjustment Amount, any remaining disputes shall be
resolved by PricewaterhouseCoopers LLP (the “Accounting Firm”), who
shall, acting as experts and not as arbitrators, determine in accordance with
this Agreement, and only with respect to the remaining differences so
submitted, whether and to what extent, if any, Parent’s determination of the
Closing Date Working Capital requires adjustment.  The Accounting Firm shall be instructed to
resolve such disputes within thirty (30) days after its appointment.  The resolution of disputes by the Accounting
Firm shall be set forth in writing and shall be conclusive and binding upon all
parties and the Statement of Adjustment Amount, as modified by such resolution,
shall become final and binding upon the date of such resolution.  The Escrow Agent (solely to the extent of the
Escrow Fund) and Parent shall each bear fifty percent (50%) of the fees and
costs of the Accounting Firm.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company hereby represents and warrants to Parent
and Sub that, except as set forth in the corresponding sections, if applicable,
of the disclosure letter delivered by the Company to Parent and Sub upon or
prior to entering into this Agreement (the “Company Disclosure Letter”),
the statements contained in this Article 3 are true and complete as of the
date hereof and will be true and complete as of the Closing Date:

 

3.1           Due Organization, Good
Standing and Corporate Power.  Set
forth in Section 3.1 of the Company Disclosure Letter is an accurate and
complete list of the Subsidiaries of the Company.  Each of the Company and its Subsidiaries has
been duly organized and is validly existing as a corporation and in good
standing under the laws of the jurisdiction of its incorporation and each such
Person has all requisite corporate or other applicable power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted.  Each of the Company and its
Subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the property owned, leased or operated
by it, or the nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions where the failure to be so qualified or
licensed and in good standing has not had, does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.  The
Company has, prior to the date of this Agreement, made available to Parent
complete and correct copies of the Company Charter and By-laws and the
comparable governing documents of each of its Subsidiaries, in each case as
amended and in full force and effect. 
None of the Company and its Subsidiaries is in violation of its
Certificate of Incorporation or other organizational or governing documents.

 

3.2           Authorization and
Validity of this Agreement.  The
Company has the requisite corporate power and authority to execute and deliver
each of the Transaction Documents, to perform its obligations hereunder and
thereunder and (subject to the approval of the Company Stockholders) to
consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance by
the Company of each of the Transaction Documents, and the consummation by it of
the transactions contemplated hereby and thereby, have been duly

 

18

 

authorized and approved by its
Board of Directors, and except for the approval of the Company Stockholders, no
other corporate action on the part of the Company is necessary to authorize the
Company’s performance of its obligations hereunder and the consummation of the
transactions contemplated hereby.  This
Agreement has been duly and validly executed and delivered by the Company and
constitutes, and upon the execution and delivery by the Company of the Escrow
Agreement, the Escrow Agreement shall constitute, legal, valid and binding
obligations of the Company enforceable against it in accordance with their
terms, except to the extent that their enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally and to general
equitable principles.

 

3.3           Capitalization.

 

(a)           The
authorized capital stock of the Company immediately prior to the Effective Time
consists of: (i) 100,000,000 shares of Company Common Stock, of which
5,669,781 shares have been issued and are outstanding; and (ii) 20,678,113
shares of Company Preferred Stock, (A) 506,130 shares of which have been
designated as Series A Stock, all of which have been issued and are
outstanding; (B) 4,698,803 shares of which have been designated as Series B
Stock, of which 4,678,179 shares have been issued and are outstanding; (C) 4,432,176
shares of which have been designated as Series C Stock, of which 4,419,135
shares have been issued and are outstanding; (D) 3,250,003 shares of which
have been designated as Series D Stock, all of which have been issued and
are outstanding; (E) 4,411,768 shares of which have been designated as Series E
Stock, all of which have been issued and are outstanding; and (F) 3,412,898
shares of which have been designated as Series F Stock, 3,412,898 of which
have been issued and are outstanding. 
There are (w) 190,000 shares of Company Common Stock held as
treasury shares, (x) 5,276,287 shares of Company Common Stock reserved for
issuance pursuant to the Company Option Plans, (y) 2,486,680 shares of Company
Common Stock subject to issuance upon exercise of outstanding Company Options
(as a result of the acceleration of Company Options pursuant to the terms of
the 1999 Equity Incentive Plan resulting from the Merger), and (z) 65,904
shares of Company Common Stock and 33,669 shares of Company Preferred Stock
subject to issuance upon exercise of outstanding Company Warrants.  Section 3.3(a) of the Company Disclosure
Letter identifies all of the record owners of the issued and outstanding shares
of each class of capital stock of the Company. 
All issued and outstanding shares of capital stock of the Company and
each of its Subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, were not issued in violation of any preemptive
rights, and were issued in compliance with all applicable federal and state
securities Laws, including those concerning the issuance of securities.  There are no outstanding or authorized
Company Options or other commitments or claims of any character, contingent or
otherwise, pursuant to which the Company or any of its Subsidiaries is or may
become obligated to issue shares of its capital stock or any securities
convertible into, exchangeable for, or evidencing the right to subscribe for,
any shares of the capital stock of the Company or any of its Subsidiaries.  There are no outstanding contractual
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any Company Stock or any shares of capital stock of any
Subsidiary of the Company.  Neither the
Company nor any of its Subsidiaries has authorized or outstanding bonds, debentures,
notes or other indebtedness which entitle the holders to vote (or are
convertible or exercisable for or exchangeable into securities which entitle
the holders to vote) with the

 

19

 

stockholders of such Person on
any matter.  Neither the Company nor any
of its Subsidiaries owns, directly or indirectly, any capital stock or other
equity, ownership or proprietary interest in any Person (other than any
Subsidiary of the Company).  All of the
outstanding shares of capital stock of each of the Subsidiaries of the Company
are owned, of record and beneficially, by the Company or one or more of its
Subsidiaries free and clear of any liens, security interest, charge or
encumbrance of any kind or nature, other than the right of first refusal set forth
in the Company By-laws (each, a “Lien”). 
Except as provided in the DGCL or the Company Charter, there are no
restrictions of any kind that prevent or restrict the payment of dividends by
the Company or any of its Subsidiaries.

 

(b)           The
stock register of the Company accurately records the name of each Person owning
Company Stock, the certificate number of each certificate evidencing such
Company Stock, the number of shares evidenced by each such certificate and the
date of issuance thereof.

 

(c)           The
number of shares of Company Stock set forth opposite the name of each Company
Stockholder in Section 3.3(a) of the Company Disclosure Letter are
owned beneficially by each such Company Stockholder free and clear of all Liens
imposed by or through the Company.

 

(d)           To
the Knowledge of the Company, there are no voting agreements with respect to
any of the Company Stock or any of the shares of capital stock of any of the
Subsidiaries of the Company.

 

3.4           Consents and Approvals; No
Violations.  The filing of the Certificate
of Merger as required by the DGCL and the requirements of federal and state
securities laws, and assuming approval of this Agreement by the Company
Stockholders, the Company’s execution and delivery of the Transaction Documents
and the consummation of the transactions contemplated hereby and thereby do not
and shall not (w) violate or conflict with any provision of the Company
Charter or its By-Laws or the comparable governing documents of any of its
Subsidiaries, (x) violate or conflict with any statute, ordinance, rule,
regulation, order or decree of any court or of any Governmental Entity
applicable to the Company or any of its Subsidiaries or by which any of their
respective properties or assets is bound, (y) require any filing with, or Permit,
consent or approval of, or the giving of any notice to, any Governmental Entity
or (z) result in a violation or breach of, conflict with, constitute (with or
without due notice or lapse of time or both) a default under or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries under, any Material Contract, other than, in the case of
(x), (y) and (z), any such violation, conflict, or other result that could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or on the Surviving Corporation.

 

3.5           Company Financial Statements.

 

(a)           The
Company has delivered to Parent the audited consolidated balance sheet of the
Company and its Subsidiaries as of December 31, 2004, and the related
audited consolidated statements of operations, stockholders’ equity and cash
flows for the twelve (12) months then ended (the “FY04 Audited Financial
Statements”).  The FY04 Audited
Financial

 

20

 

Statements have been prepared in accordance with GAAP.  The FY04 Audited Financial Statements are
based upon the information contained in the books and records of the Company
and its Subsidiaries and fairly present the financial condition of the Company
and its Subsidiaries at the date thereof and the results of the operations and
cash flows of the Company and its Subsidiaries and the changes in their
financial condition for the period indicated.

 

(b)           The
Company has delivered to Parent the unaudited consolidated balance sheet of the
Company and its Subsidiaries as of September 30, 2005 (such balance sheet,
the “Most Recent Balance Sheet” and such date, the “Balance Sheet
Date”) and the related unaudited consolidated statements of income for the
nine (9) months then ended (collectively, the “Stub Unaudited Financial
Statements”).  The Stub Unaudited
Financial Statements have been prepared in accordance with GAAP, subject to
customary year-end adjustments and except for the absence of footnote
disclosures.  The Stub Unaudited
Financial Statements are based upon the information contained in the books and
records of the Company and its Subsidiaries and fairly present the financial
condition of the Company and its Subsidiaries at the date thereof and the
results of the operations and cash flows of the Company and its Subsidiaries
and the changes in their financial condition for the periods indicated.

 

(c)           Neither
the Company nor any of its Subsidiaries has outstanding any claims, liabilities
or Indebtedness, contingent or otherwise, of any kind whatsoever (whether
accrued, absolute, contingent or otherwise, and whether or not reflected or
required to be reflected in the Company’s Financial Statements), except for (i) liabilities
reflected or reserved against in the Most Recent Balance Sheet and (ii) liabilities
which have arisen after the date thereof in the ordinary course of
business.  No material claims,
liabilities or Indebtedness, contingent or otherwise, of any kind whatsoever
(whether accrued, absolute, contingent or otherwise, and whether or not
reflected or required to be reflected in the Company’s Financial Statements) of
any of the Company or any of its Subsidiaries has arisen after the date of the
Most Recent Balance Sheet, other than in the ordinary course of business.

 

3.6           Absence of Certain Changes or
Events.  Since December 31,
2004, the Company and its Subsidiaries have conducted their businesses only in
the ordinary course and, since such date, there has not been any Material
Adverse Effect on the Company.  Without
limiting the generality of the foregoing since December 31, 2004:

 

(a)           the
Company has not sold, leased, transferred, or assigned any of its assets,
tangible or intangible, involving more than $100,000 in the aggregate, other
than for a fair consideration in the ordinary course of business;

 

(b)           the
Company has not entered into any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses) involving more
than $100,000 of expenditures and outside the ordinary course of business;

 

(c)           other
than an agreement, contract, lease or license that has expired pursuant to its
terms, no party (including the Company) has accelerated, terminated, modified,
or canceled any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than $100,000 of
expenditures to which the Company is a party or by which it is bound;

 

21

 

(d)           the
Company has not imposed upon any of its assets, tangible or intangible, any
mortgage, pledge, lien, encumbrance, charge, or other security interest, other
than (A) mechanic’s, materialmen’s, and similar liens, (B) liens for
Taxes not yet due and payable, (C) purchase money liens and liens securing
rental payments under capital lease arrangements, and (D) other liens
arising in the ordinary course of business and not incurred in connection with
the borrowing of money, in each case that has no Material Adverse Effect on the
Company;

 

(e)           the
Company has not made any capital expenditure (or series of related capital
expenditures) either involving more than $100,000 in the aggregate or outside
the ordinary course of business;

 

(f)            the
Company has not made any capital investment in, any loan to, or any acquisition
of the securities or assets of, any other person (or series of related capital
investments, loans, and acquisitions) either involving more than $20,000 in the
aggregate or outside the ordinary course of business;

 

(g)           the
Company has not issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation either involving more than $20,000 singly or
$100,000 in the aggregate;

 

(h)           the
Company has not materially changed any of its payment policies with its
landlords, vendors, suppliers or other creditors;

 

(i)            the
Company has not delayed or postponed the payment of accounts payable and other
liabilities outside the ordinary course of business;

 

(j)            the
Company has not canceled, compromised, waived, or released any right or claim
(or series of related rights and claims) either involving more than $20,000 in
the aggregate or outside the ordinary course of business;

 

(k)           the
Company has not had any adverse change in its relationships with its material
customers or suppliers, except for changes that, individually or in the
aggregate, have no Material Adverse Effect on the Company;

 

(l)            the
Company has not abandoned any Company Intellectual Property or granted any
right, title or interest in any Company Intellectual Property, or entered into
any agreement not to sue, with respect to any Company Intellectual Property
other than licenses to customers, resellers and service partners in the
ordinary course of its business;

 

(m)          there
has been no change made or authorized in the Company Charter or the Company
By-laws;

 

(n)           the
Company has not issued, sold, or otherwise disposed of any of its capital stock
(other than the issuance of stock from the exercise of stock options), or
granted any options, warrants, or other rights to purchase or obtain (including
upon conversion, exchange, or exercise) any of its capital stock;

 

22

 

(o)           the
Company has not declared, set aside, or paid any dividend or made any
distribution with respect to its capital stock (whether in cash or in kind) or
redeemed, purchased, or otherwise acquired any of its capital stock;

 

(p)           the
Company has not experienced any material damage, destruction, or loss (whether
or not covered by insurance) to its property;

 

(q)           the
Company has not made any loan to, or entered into any other transaction with,
any of its directors or officers or, outside of the ordinary course of
business, any of its employees;

 

(r)            the
Company has not entered into any employment contract or collective bargaining
agreement, written or oral, or modified the terms of any existing such contract
or agreement;

 

(s)           the
Company has not granted any increase in the base compensation of any of its
directors or officers or employees, outside the ordinary course of business;

 

(t)            the
Company has not adopted, amended, modified, or terminated any bonus,
profit-sharing, incentive, severance, or other plan, contract, or commitment
for the benefit of any of its directors, officers, and employees (or taken any
such action with respect to any other Employee Benefit Plan);

 

(u)           the
Company has not made any other change in employment terms for any of its directors
or officers or employees, outside of the ordinary course of business;

 

(v)           the
Company has not made or pledged to make any charitable or other capital
contribution to any entity in excess of $5,000 in the aggregate;

 

(w)          the
Company has not made any material change in its accounting methods, principles
or practices, except as required by GAAP;

 

(x)            the
Company has not made any Tax (as defined in Section 3.12 hereof) election,
other than in accordance with past practice, or settlement or compromise of any
material Tax liability;

 

(y)           there
has not been any other occurrence, event, incident, action or, where an action
is required by applicable Law or contract, failure to act, or any transaction
outside the ordinary course of business involving the Company, that has
resulted in, or could reasonably be expected to give rise to, a Material
Adverse Effect on the Company; and

 

(z)            the
Company has not legally contracted itself to be bound by any of the foregoing.

 

3.7           Title to Properties;
Encumbrances.  The Company and each
of its Subsidiaries has good and marketable title to, or, in the case of leased
properties and assets, valid leasehold interests in, (a) all of its
material tangible properties and assets (real and personal), including all the
properties and assets reflected in the Most Recent Balance Sheet, and (b) all
the tangible

 

23

 

properties and assets used by
them or purchased by the Company and any of its Subsidiaries since the Balance
Sheet Date, except for any of such properties and assets which have since been
sold or otherwise disposed of in the ordinary course of business, in each case
subject to no Liens other than Liens reflected or reserved against in the Most
Recent Balance Sheet and Permitted Liens. 
None of the Company or any of its Subsidiaries own any fee interest in
real property.

 

3.8           Compliance with Laws.

 

(a)           Except
where the failure to so comply would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company, the
Company and its Subsidiaries (i) are in compliance with all applicable
Laws and (ii) have not received notification of any asserted present or
past failure to so comply.

 

(b)           The
Company and its Subsidiaries hold all federal, state, local and foreign
permits, approvals, licenses, authorizations, certificates, rights, exemptions
and orders from Governmental Entities (each a “Permit”, and
collectively, the “Permits”) that are necessary for the operation of the
business of the Company and/or its Subsidiaries as now conducted, except to the
extent that any failure to hold a Permit would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company.  There has not occurred any
suspension, cancellation or default of or under any such Permit, and, to the
Company’s Knowledge, no such suspension, cancellation or default is pending or
threatened, except to the extent that any suspension, cancellation or default
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company.

 

3.9           Litigation.

 

(a)           There
is no action, suit, proceeding at law or in equity, or any arbitration or
administrative or other proceeding by or before (or to the Company’s Knowledge
any inquiry or investigation by) any Governmental Entity, pending, or, to the
Company’s Knowledge, threatened, against the Company or any of its Subsidiaries
or any of their officers, directors or shareholders in their capacity as such.

 

(b)           There
are no suits, actions, claims, proceedings or investigations pending or, to the
Company’s Knowledge, threatened, seeking to prevent, materially delay or
challenge the transactions contemplated by this Agreement.  Neither the Company nor any of its Subsidiaries
is subject to any judgment, order or decree entered in any lawsuit or
proceeding, including any judgment, order or decree that may prevent or
materially delay the consummation of the transactions contemplated by this
Agreement.  To the Company’s Knowledge,
there are no facts, events or occurrences reasonably likely to result in such a
claim.

 

3.10         Employee Benefit Plans.

 

(a)           List
of Plans.  Set forth in Section 3.10(a) of
the Company Disclosure Letter is an accurate and complete list of all domestic and
foreign (i) “employee benefit plans,” within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended, and the rules and
regulations thereunder (“ERISA”), whether qualified or non-qualified,
and whether funded or unfunded; (ii) bonus, stock option, stock purchase,
stock

 

24

 

appreciation right, restricted stock, incentive, fringe benefit, “voluntary
employees’ beneficiary associations” (“VEBAs”) under Section 501(c)(9) of
the Code, profit-sharing, pension, or retirement, deferred compensation,
medical, life insurance, disability, accident, salary continuation, severance,
accrued leave, vacation, sick pay, sick leave, supplemental retirement and
unemployment benefit plans, programs, arrangements, commitments and/or
practices (whether or not insured); and (iii) employment, consulting,
termination, and severance contracts or agreements; for active, retired or
former employees or directors, whether or not any such plans, programs,
arrangements, commitments, contracts, agreements and/or practices (referred to
in (i), (ii) or (iii) above) are in writing or are otherwise exempt
from the provisions of ERISA; that are maintained or contributed to (or with
respect to which an obligation to contribute has been undertaken) by the
Company or any of its Subsidiaries (including, for this purpose and for the
purpose of all of the representations in this Section 3.10, any
predecessors to the Company or to any of its Subsidiaries and all employers
(whether or not incorporated) that would be treated together with the Company,
any of its Subsidiaries and/or any Company Stockholder as a single employer
within the meaning of Section 414 of the Code or with respect to which the
Company or any of its Subsidiaries has any liability (“Employee Benefit
Plans”).

 

(b)           Status
of Plans.  Each Employee Benefit Plan
(including any related trust or insurance contract) complies in all material
respects in form with the requirements of all applicable laws, including,
without limitation, ERISA, the Code, and foreign tax, labor, securities, data
privacy, currency exchange control and other laws, and has at all times been
maintained and operated in all material respects in substantial compliance with
its terms and the requirements of all applicable laws, including, without
limitation, ERISA and the Code.  All
required reports and descriptions (including, without limitation, annual
reports on IRS Form 5500-series 990, summary annual reports, PBGC 1s, and
summary plan descriptions) have been timely filed and distributed appropriately
with respect to each such Employee Benefit Plan.  Neither the Company nor any of its
Subsidiaries has any commitment, intention or understanding to create, modify
or terminate any Employee Benefit Plan, except to comply with applicable law or
the terms of any applicable collective bargaining agreement.  To the Company’s Knowledge, no condition or
circumstance exists that would prevent the amendment or termination of any
Employee Benefit Plan subject to existing rights of participants therein.  To the Company’s Knowledge, no event has
occurred and no condition or circumstance has existed that could result in a
material increase in the benefits under or the expense of maintaining any
Employee Benefit Plan from the level of benefits or expense incurred for the
most recent fiscal year ended thereof.

 

(c)           Liabilities.

 

(i)            No
Employee Benefit Plan is or was subject to Title IV of ERISA or Section 412
of the Code, and no Employee Benefit Plan is or was a Multiemployer Plan.

 

(ii)           Neither
the Company nor any of its Subsidiaries maintains any Employee Benefit Plan
which is (a) a “group health plan” (as such term is defined in Section 5000(b)(1) of
the Code or Section 607(1) of ERISA) that has not been administered
and operated in all material respects in substantial compliance with the
applicable requirements of Part 6 of Subtitle B of Title I of ERISA and Section 4980B
of the Code or (b) a “group health plan” (as defined in 45 Code of Federal
Regulations Section 160.103) that has not been

 

25

 

administered and operated in
all material respects in substantial compliance with the applicable
requirements of the Health Insurance Portability and Accountability Act of 1996
and the regulations promulgated thereunder, and, to the Company’s Knowledge,
neither the Company nor any of its Subsidiaries is subject to any liability,
including, without limitation, additional contributions, fines, taxes,
penalties or loss of tax deduction as a result of such administration and
operation.  No Employee Benefit Plan
which is such a group health plan is a “multiple employer welfare arrangement,”
within the meaning of Section 3(40) of ERISA.  Each Employee Benefit Plan that is intended
to meet the requirements of Section 125 of the Code meets such
requirements in all material respects. 
To the Company’s Knowledge, neither the Company nor any of its
Subsidiaries maintains any Employee Benefit Plan which is an “employee welfare
benefit plan” (as such term is defined in Section 3(1) of ERISA) that
has provided any “disqualified benefit” (as such term is defined in Section 4976(b) of
the Code) with respect to which an excise tax could be imposed.

 

(iii)          Except
to the extent required under Part 6 of Subtitle B of Title I of ERISA and Section 4980B
of the Code (or similar provisions of applicable state law), neither the
Company nor any of its Subsidiaries maintains any Employee Benefit Plan
(whether qualified or non-qualified under Section 401(a) of the Code)
providing for post-employment or retiree health, life insurance and/or other
welfare benefits and having unfunded liabilities, and neither the Company nor
any of its Subsidiaries have any obligation to provide any such benefits to any
retired or former employees or active employees following such employees’
retirement or termination of service.

 

(iv)          Neither
the Company nor any of its Subsidiaries has incurred any liability for any tax
or excise tax arising under Title 26, Subtitle D, Chapter 43 of the Code, and
to the Company’s Knowledge no event has occurred and no condition or
circumstance has existed that could reasonably be expected to give rise to any
such liability.

 

(v)           To
the Company’s Knowledge, there are no actions, suits, claims or disputes
pending, or threatened, anticipated or expected to be asserted against or with
respect to any Employee Benefit Plan or the assets of any such plan (other than
routine claims for benefits and appeals of denied routine claims).  To the Company’s Knowledge, no fact or event
exists that could reasonably be expected to give rise to any such action, claim
or proceeding.  Neither the Company nor
any of its Subsidiaries is subject to any penalty or tax with respect to any
Employee Benefit Plan under Section 502(i) of ERISA or Sections 4975
through 4980 of the Code and no action has occurred that could reasonably be
expected to give rise to such a penalty or tax. 
To the Company’s Knowledge, no civil or criminal action brought pursuant
to the provisions of Title I, Subtitle B, Part 5 of ERISA is pending,
threatened, anticipated, or expected to be asserted against the Company or any
of its Subsidiaries or any fiduciary of any Employee Benefit Plan, in any case
with respect to any Employee Benefit Plan. 
To the Company’s Knowledge, no Employee Benefit Plan or any fiduciary
thereof (in such capacity) has been the direct or indirect subject of an audit,
investigation or examination by any governmental or quasi-governmental agency.

 

(d)           Contributions.  Full payment has been timely made of all
amounts which the Company or any of its Subsidiaries is required, under
applicable law or under any Employee Benefit Plan or any agreement relating to
any Employee Benefit Plan to which the Company or

 

26

 

any of its Subsidiaries is a
party, to have paid as contributions or premiums thereto as of the last day of
the most recent fiscal year of such Employee Benefit Plan ended prior to the
date hereof and such contributions or premiums have been timely deposited into
the appropriate trusts or accounts.

 

(e)           Insurance
Company Investments.  No Employee
Benefit Plan holds as an asset any interest in any annuity contract, guaranteed
investment contract or any other investment or insurance contract, policy or
instrument issued by an insurance company that, to the Knowledge of the
Company, is or may be the subject of bankruptcy, conservatorship, insolvency,
liquidation, rehabilitation or similar proceedings.

 

(f)            Tax
Qualification.  Each Employee Benefit
Plan intended to be qualified under Section 401(a) of the Code has
received a current favorable determination letter or opinion letter from the
IRS.  Each trust established in
connection with any Employee Benefit Plan which is intended to be exempt from
Federal income taxation under Section 501(a) of the Code has received
a current favorable determination letter or opinion letter from the IRS.  Since the date of each most recent
determination referred to in this paragraph (f), to the Company’s Knowledge no
event has occurred and no condition or circumstance has existed that resulted
or is likely to result in the revocation of any such determination or that
could adversely affect the qualified status of any such Employee Benefit Plan or
the exempt status of any such trust or VEBA. 
All tax-qualified Employee Benefit Plans have been amended to comply
with the Economic Growth and Tax Relief Reconciliation Act of 2001.

 

(g)           Triggering
Events.  Neither the execution of
this Agreement nor the consummation of the transactions contemplated hereby
will result in any payment (whether of severance pay or otherwise), “parachute
payment” (as such term is defined in Section 280G of the Code),
acceleration, vesting or increase in benefits to any employee or former
employee or director of the Company or any of its Subsidiaries.  No Employee Benefit Plan provides for the
payment of severance, termination, change in control or similar-type payments
or benefits.  The execution of this
Agreement and the consummation of the transactions contemplated hereby will not
limit Parent’s ability to amend or terminate any of the Employee Benefit Plans
after the Effective Time.

 

(h)           Classification.  The Company and its Subsidiaries have
classified all individuals who perform services for them correctly in all
material respects under each Employee Benefit Plan, ERISA, the Code and other
applicable Law as common law employees, independent contractors or leased
employees.

 

(i)            Documents.  The Company has delivered or caused to be
delivered to Parent true and complete copies of all material documents in
connection with each Employee Benefit Plan, including, without limitation
(where applicable): (i) all plan documents as in effect on the date
hereof, together with all amendments thereto, including, in the case of any
Employee Benefit Plan not set forth in writing, a written description thereof; (ii) all
current summary plan descriptions, summaries of material modifications, and
material communications; (iii) all current trust agreements, declarations
of trust and other documents establishing other funding arrangements (and all
amendments thereto and the latest financial statements thereof); (iv) the
most recent IRS determination or opinion letter, obtained with

 

27

 

respect to each Employee
Benefit Plan intended to be qualified under Section 401(a) of the
Code or exempt under Section 501(a) or 501(c)(9) of the Code; (v) the
annual report on IRS Form 5500-series or 990 for the most recent year; (vi) the
most recently prepared financial statements; (vii) all minutes with
respect to the meetings of each Employee Benefit Plans’ administrative
committee and/or plan administrator; and (vii) all contracts and
agreements relating to each Employee Benefit Plan, including, without
limitation, service provider agreements, insurance contracts, annuity
contracts, investment management agreements, subscription agreements,
participation agreements, recordkeeping agreements and collective bargaining
agreements.

 

3.11         Employment Relations and
Agreements.

 

(a)           (i) Each
of the Company and its Subsidiaries is in compliance in all material respects
with all federal, foreign, state or other applicable laws respecting employment
and employment practices, terms and conditions of employment and wages and
hours, and has not and is not engaged in any unfair labor practice as
determined by the National Labor Relations Board (“NLRB”), (ii) to
the Company’s Knowledge, no unfair labor practice charge or complaint against
the Company or any of its Subsidiaries is pending before the NLRB or an
equivalent tribunal under applicable state or foreign law, (iii) there is
no labor strike, slowdown, stoppage or material dispute pending or, to the
Company’s Knowledge, threatened against or involving the Company or any of its
Subsidiaries, (iv) no representation question exists respecting the
employees of the Company or any of its Subsidiaries, (v) no collective
bargaining agreement is currently being negotiated by the Company or any of its
Subsidiaries and neither the Company nor any of its Subsidiaries is or has been
a party to a collective bargaining agreement, (vi) neither the Company nor
any of its Subsidiaries is experiencing or has experienced any material labor
difficulty during the last three years, (vii) no grievance or arbitration
proceeding arising out of or under a collective bargaining agreement is pending
and no claim thereunder exists or, to the Company’s Knowledge, is threatened
with respect to the Company’s or its Subsidiaries’ operations, (viii) neither
the Company nor any of its Subsidiaries has any Equal Employment Opportunity
Commission charges or other claims of employment discrimination pending or, to
the Company’s Knowledge, currently threatened against the Company or any such
Subsidiary, (ix) to the Company’s Knowledge, no wage and hour department
investigation has been made of the Company or any of its Subsidiaries, (x)
neither the Company nor any of its Subsidiaries had any occupational health and
safety claims against the Company or any such Subsidiary, (xi) the Company and
each of its Subsidiaries is in compliance in all material respects with the
terms and provisions of the Immigration Reform and Control Act of 1986, as
amended, and all related regulations promulgated thereunder (the “Immigration
Laws”), (xii) there has been no “mass layoff” or “plant closing” by the
Company as defined in the Federal Workers Adjustment Retraining and
Notification Act (“WARN”) or state law equivalent, or any other mass layoff
or plant closing that would trigger notice pursuant to WARN or state law
equivalent, within ninety (90) days prior to the Closing Date, and (xiii) to
the Company’s Knowledge, no executive, key employee, or significant group of
employees plans to terminate employment with any of the Company or any of its
Subsidiaries during the next twelve (12) months other than the Terminated
Company Employees.  To the Company’s
Knowledge, the Company and its Subsidiaries have never been the subject of any
inspection or investigation relating to its compliance with or violation of the
Immigration Laws, nor have they been warned, fined or otherwise penalized by
reason of any such failure to comply with

 

28

 

the Immigration Laws, nor is
any such proceeding pending or to the Company’s Knowledge, threatened.

 

(b)           Section 3.11(b) of
the Company Disclosure Letter sets forth the full amount due to each individual
under the Company’s Change of Control Incentive Plan (the “COC Incentive
Payments”).

 

3.12         Taxes.

 

(a)           Tax
Returns.  The Company and each of its
Subsidiaries has timely filed or caused to be timely filed or shall timely file
or cause to be timely filed with the appropriate taxing authorities all
returns, statements, forms and reports (including elections, declarations,
disclosures, schedules, estimates and information returns) for Taxes (as
hereinafter defined) (the “Returns”) that are required to be filed by,
or with respect to, the Company and its Subsidiaries on or prior to the Closing
Date.  The Returns, in all material
respects have accurately reflected and shall reflect accurately all liability
for Taxes of the Company and each of its Subsidiaries for the periods covered
thereby.  “Taxes” shall mean all
taxes, and all governmental assessments, charges, duties, fees, levies or other
charges, including all United States federal, state, local, foreign and other
income, franchise, profits, gross receipts, capital gains, capital stock,
transfer, property, sales, use, value-added, occupation, property, excise,
severance, windfall profits, stamp, license, payroll, social security,
withholding and other taxes, assessments, charges, duties, fees, levies or
other governmental charges of any kind whatsoever (whether payable directly or
by withholding and whether or not requiring the filing of a Return), all
estimated taxes, deficiency assessments, additions to tax, penalties and
interest, and shall include any liability for such amounts as a result either
of being a member of a combined, consolidated, unitary or affiliated group, or
of a contractual obligation to indemnify any Person or other entity.

 

(b)           Payment
of Taxes.  All Taxes due and owing by
or with respect to the income, assets or operations of the Company and its
Subsidiaries for all taxable years or other taxable periods that end on or
prior to the Closing Date and, with respect to any taxable year or other
taxable period beginning on or prior to and ending after the Closing Date, the
portion of such taxable year or period ending on and including the Closing Date
(“Pre-Closing Period”), have been timely paid or shall be timely paid in
full on or prior to the Closing Date or with respect to taxable periods ending
on or prior to September 30, 2005 have been accrued and adequately
disclosed and fully provided for on the Financial Statements of the Company and
its Subsidiaries in accordance with GAAP.

 

(c)           Other
Tax Matters.

 

(i)            Neither
the Company nor any of its Subsidiaries has been the subject of any audit or
other examination of Taxes by the tax authorities of any nation, state or
locality, and to the Company’s Knowledge, no such audit or other examination is
contemplated or pending, nor has the Company or any of its Subsidiaries
received any notices from any taxing authority relating to any issue which
could reasonably be expected to materially affect the Tax liability of the
Company or any of its Subsidiaries.

 

29

 

(ii)           Neither
the Company nor any of its Subsidiaries has been included in any “consolidated,”
“unitary” or “combined” Return (other than Returns which include only the
Company and any Subsidiaries of the Company) provided for under the laws of any
jurisdiction or any state or locality with respect to Taxes, for any taxable
period for which the statute of limitations has not expired.

 

(iii)          All
Taxes which the Company or any of its Subsidiaries is (or was) required by law
to withhold or collect in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third-party
have been duly withheld or collected, and have been timely paid over to the
proper authorities to the extent due and payable.

 

(iv)          There
are no tax sharing, allocation, indemnification or similar agreements or
arrangements in effect as between the Company, any Subsidiary, or any
predecessor or Affiliate of any of them and any other Person under which
Parent, Sub, the Company or any of its Subsidiaries could be liable for any
Taxes or other claims of any Person.

 

(v)           No
Indebtedness of the Company or any of its Subsidiaries consists of “corporate
acquisition indebtedness” within the meaning of Section 279 of the Code or
bears interest that is otherwise nondeductible pursuant to Section 163 of
the Code.

 

(vi)          Neither
the Company nor any of its Subsidiaries has applied for, been granted, or
agreed to any accounting method change for which it shall be required to take
into account any adjustment under Section 481 of the Code or any similar
provision of the Code or the corresponding tax laws of any nation, state or
locality and the Company and its Subsidiaries have no Knowledge that the IRS or
any other taxing authority has proposed or purported to require any such
adjustment or change in accounting method, and the Company has no Knowledge
that any such adjustment under Section 481 of the Code or the
corresponding tax laws of any nation, state or locality will be required of the
Company or its Subsidiaries upon the completion of, or by reason of, the
transactions contemplated by this Agreement.

 

(vii)         Neither
the Company nor any of its Subsidiaries, as of the Closing Date, (w) has
entered into an agreement or waiver or been requested to enter into an
agreement or waiver extending any statute of limitations relating to the
payment or collection of Taxes of the Company or any of its Subsidiaries, (x)
is presently contesting the Tax liability of the Company or any of its
Subsidiaries before any Governmental Entity, (y) has granted any
power-of-attorney related to Tax matters to any Person, or (z) has applied for
and/or received a ruling or determination from a taxing authority regarding a
past or prospective transaction of the Company or any of its Subsidiaries.

 

(viii)        Neither
the Company nor any of its Subsidiaries has been a “United States real property
holding corporation” within the meaning of Section 897(c)(2) of the
Code at any time during the five-year period ending on the date hereof.

 

(ix)           There
are no material security interests on any of the assets of the Company or any
of its Subsidiaries that arose in connection with any failure (or alleged
failure) to pay any Taxes.

 

30

 

(x)            Neither
the Company nor any of its Subsidiaries is a party to any agreement that would
require the Company or any of its Subsidiaries, or any of their respective
Affiliates, to make any payment that would constitute an “excess parachute
payment” for purposes of Sections 280G and 4999 of the Code or that would not
be deductible pursuant to Section 162(m) of the Code.

 

(xi)           No
claim has ever been received from any taxing authority in a jurisdiction where
the Company or any of its Subsidiaries does not file Returns that the Company
or any of its Subsidiaries is, or may be, subject to taxation by that
jurisdiction.

 

(xii)          There
are no deferred intercompany transactions between the Company and any of its
Subsidiaries or between its Subsidiaries and there is no excess loss account
(within the meaning of Treasury Regulations Section 1.1502-19 with respect
to the stock of the Company or any of its Subsidiaries), and (ii) there
are no other transactions or facts existing with respect to the Company and/or
its Subsidiaries which by reason of the consummation of the transaction
contemplated by this Agreement will result in the Company and/or its
Subsidiaries recognizing income.

 

3.13         Intellectual Property.

 

(a)           Section 3.13(a) of
the Company Disclosure Letter contains a complete list of all patents, pending
patent applications, trademark and service mark registrations, pending
applications for trademark and service mark registration, and copyright
registrations and pending applications for registration thereof, and other
material Intellectual Property used in the conduct of the business of the
Company or any of its Subsidiaries as currently conducted.  To the extent indicated on such Schedule, the
Intellectual Property owned by the Company, as listed in Section 3.13(a) of
the Company Disclosure Letter, has been duly registered in, filed in or issued
by the United States Patent and Trademark Office, the United States Copyright
Office, a domain name registrar, or the offices of other jurisdictions, and
each such registration, filing and issuance remains in full force and effect.

 

(b)           All
material licenses and agreements of the Company with respect to any
Intellectual Property are set forth in Section 3.13(b) of the Company
Disclosure Letter.  To the extent any
Intellectual Property used by the Company, under license or otherwise, is
necessary to the business of the Company and/or any of its Subsidiaries as
currently conducted, no notice of a default has been sent or received by the
Company or any of its Subsidiaries under any such license which remains
uncured, and the execution, delivery or performance of the Company’s
obligations hereunder shall not result in such a default.

 

(c)           The
Company and/or its Subsidiaries owns or has the right to use all of the
Intellectual Property used in its business, free and clear of any material
Liens (other than, with respect to Intellectual Property not owned by the
Company, those Liens by or through the owner), without obligation to pay any
royalty or any other fees with respect thereto (other than in accordance with
licenses or agreements listed under Section 3.13(c) of the Company
Disclosure Letter), and the operation of the business of the Company and its
Subsidiaries as currently conducted requires no rights under Intellectual
Property other than with respect to the Intellectual Property currently owned
or licensed by Company.  To the Company’s
Knowledge,

 

31

 

neither the Company’s nor any
of its Subsidiaries’ use of Intellectual Property infringes or misappropriates
any third-party rights.  No material
patent, copyright registration or registered trademark owned by the Company has
been canceled, abandoned or otherwise terminated, and all renewal and
maintenance fees in respect thereof have been duly paid.  There are no actions that must be taken or
payments that must be made within ninety (90) days of the Closing Date relating
to the Company’s Intellectual Property that, if not taken or made, will have a
Material Adverse Effect on the Company. 
Other than in accordance with the license agreements listed in Section 3.13(c) of
the Company Disclosure Letter, the Company and its Subsidiaries have the
exclusive right to file, prosecute and maintain all applications and
registrations with respect to the Intellectual Property that is owned by the
Company or any of its Subsidiaries.

 

(d)           Neither
the Company nor any of its Subsidiaries has received any written notice or
claim, or to the Company’s Knowledge any other notice or claim, from any Person
challenging the right of the Company or any of its Subsidiaries to use any
Intellectual Property that the Company has used or is using.

 

(e)           Neither
the Company nor any of its Subsidiaries has made any claim in writing of a
violation, infringement, misuse or misappropriation by any Person of the
Company’s or any of its Subsidiaries’ rights to, or in connection with, any
Intellectual Property owned by the Company, which claim is still pending.

 

(f)            There
is no pending and there has not been threatened, any proceeding, litigation or
other adverse claim before any Governmental Entity or, to the Company’s
Knowledge, any fact or occurrence reasonably likely to result in such a claim,
by any Person, of an infringement or misappropriation by the Company or any of
its Subsidiaries of any Intellectual Property owned by any Person, or
challenging the validity, enforceability or ownership, as applicable, of any
Intellectual Property owned or claimed to be owned by the Company or any of its
Subsidiaries.

 

(g)           The
Company has not received any notice of and, to the Company’s Knowledge, there
are not any interferences, oppositions, or other contested proceedings, pending
or threatened in the United States Copyright Office, the United States Patent
and Trademark Office, or any Governmental Entity, relating to any pending
application of the Company with respect to any Intellectual Property.

 

(h)           The
Company and each of its Subsidiaries have taken commercially reasonable steps
to protect and preserve the confidentiality of all trade secrets and
confidential proprietary information used or held for use in their respective
businesses.

 

(i)            The
Company represents and warrants that its products, including any enhancements,
extensions, upgrades or new releases, do not include any Open Source Code.  For purposes of this Agreement, “Open
Source Code” shall mean software code that may subject the products, in
whole or in part, to all or part of license terms which seek to require any
products to be licensed to or otherwise shared with any third-party under terms
that require such products to (a) be disclosed or distributed in source
code format; (b) be licensed for the purpose of making derivative works;
or (c) be re-distributable at no charge.

 

32

 

3.14         Broker’s or Finder’s Fee.  No agent, broker, Person or firm acting on
behalf of the Company or, prior the Closing, the Company Stockholders is, or
shall be, entitled to any fee, commission or broker’s or finder’s fees in
connection with this Agreement or any of the transactions contemplated hereby
from any of the Parties or from any Affiliate of any of the Parties.

 

3.15         Certain Contracts and
Arrangements.  Neither the Company
nor any of its Subsidiaries is a party to or bound by any contracts,
agreements, instruments or understandings (“Contracts”) of the following
nature (collectively, the “Material Contracts”):

 

(a)           Contracts
with any current or former employee, director or officer of the Company or any
of its Subsidiaries (other than any such officer who receives or received
(during his or her last year of employment with the Company or any of its
Subsidiaries) less than $100,000 in total annual cash compensation from the
Company or any of its Subsidiaries);

 

(b)           Contracts,
other than contracts entered into in the ordinary course of business, (x) for
the sale of any amount of the material assets of the Company or any of its
Subsidiaries, or (y) for the grant to any Person of any preferential rights to
purchase any amount of its material assets;

 

(c)           Contracts
which restrict the Company or any of its Subsidiaries from competing in any
line of business or with any Person in any geographical area, or which restrict
any other Person from competing with the Company or any of its Subsidiaries in
any line of business or in any geographical area;

 

(d)           Other
than Contracts entered into in the ordinary course of business, Contracts which
restrict the Company or any of its Subsidiaries from disclosing any information
concerning or obtained from any other Person, or which restrict any other
Person from disclosing any information concerning or obtained from the Company
or any of its Subsidiaries;

 

(e)           Any
confidentiality, nondisclosure or similar Contracts which contain any “standstill”
provisions or similar restrictions by any third-party (other than Parent or its
Affiliates);

 

(f)            Contracts
involving (i) the acquisition, merger or purchase of all or substantially
all of the assets or business of a third-party, or (ii) the purchase or
sale of assets, or a series of purchases and sales of assets, involving
aggregate consideration of $100,000 or more;

 

(g)           Contracts
with any Affiliate of the type that would be required to be disclosed under
Item 404 of Regulation S-K under the Securities Act;

 

(h)           Any
current Contracts which contain a provision requiring a third-party’s consent
to, or giving it a termination right following, a change in control of the
Company or any of its Subsidiaries;

 

33

 

(i)            Contracts,
including mortgages or other grants of security interests, guarantees and
notes, relating to the borrowing of money or the extension of debt;

 

(j)            Contracts
relating to any joint venture, partnership, strategic alliance or similar
arrangement, which has involved, or is reasonably expected to involve, a
sharing of revenues, profits, cash flows, expenses or losses by the Company or
any of its Subsidiaries with any other party;

 

(k)           Contracts
existing on the date hereof involving revenues or payments in excess of
$100,000 per year;

 

(l)            Any
distribution, marketing, sales representative or similar Contract under which
any third-party is authorized to sell, sublicense, lease, distribute, market or
take orders for, any product, service or technology of the Company or any of
its Subsidiaries;

 

(m)          Any
Contract providing for the current or future development of any software,
content, technology or Intellectual Property by or for (or for the benefit or
use of) the Company or any of its Subsidiaries;

 

(n)           Any
Contract, other than standard forms of customer Contracts entered into in the
ordinary course of business, pursuant to which the Company or any of its
Subsidiaries has sold, acquired or licensed any rights in or to any software,
technology or other Intellectual Property to any third-party; and

 

(o)           Any
Contract for or relating to the employment or hiring of services of any
officer, employee, consultant, or independent contractor of the Company or any
of its Subsidiaries or any other type of contract or understanding with any
director, officer, employee or consultant of the Company or any of its
Subsidiaries, in each case, that is not terminable within fifteen (15) days by
the Company or its Subsidiary without cost or other liability, other than with
respect to a payment for services rendered prior to the date of termination.

 

Neither the Company nor any of its Subsidiaries is in
material breach or material default under any Material Contract nor, to the
Company’s Knowledge, is any other party to any Material Contract in material
breach or material default thereunder, and each Material Contract to which the
Company or its Subsidiaries is a party is in full force and effect, and the
consummation of the transactions contemplated by this Agreement will not result
in any material breach or material default thereunder.

 

3.16         Environmental Laws and
Regulations.  (i) The Company
and each of its Subsidiaries are in material compliance with all applicable
Environmental Laws, and have obtained, and are in material compliance with, all
Permits required of them under applicable Environmental Laws, other than those
Permits that the failure to obtain or comply with would not have a Material
Adverse Effect on the Company, (ii) there are no claims or proceedings by
any Governmental Entity or other Person or entity pending or, to the Company’s
Knowledge, threatened against the Company or any of its Subsidiaries under any
Environmental Law, (iii) to the Company’s Knowledge, no present Company
Property is subject to any Lien, or to any restriction on its ownership, use,
occupancy or transferability, under any Environmental Law and (iv) to the
Company’s Knowledge, there are no facts, circumstances or conditions (including
the

 

34

 

disposal of any wastes,
hazardous substances or other materials, the existence of any contractual
obligations, or any other matters in respect of the past or present business or
operations of the Company or any of its Subsidiaries, or any predecessor of the
Company or any of its Subsidiaries) that could reasonably be expected to give
rise to any claim, proceeding or action against the Company or any of its
Subsidiaries, or to any liability or remedial action on the part of the Company
or any of its Subsidiaries, under any Environmental Law.

 

3.17         Insurance. 
Section 3.17 of the Company Disclosure Letter lists each insurance
policy, and the Company has delivered to Parent prior to the date of this
Agreement, copies of all such insurance policies, which are owned by the
Company or its Subsidiaries or which name the Company or any of its
Subsidiaries as an insured, additional insured, or loss payee, including those
which pertain to the Company’s or any of its Subsidiaries’ assets, employees or
operations.  All such insurance policies
are in full force and effect, are legal, valid and enforceable, and all
premiums due thereunder have been paid. 
None of the Company nor any of its Subsidiaries has received any notice
of cancellation or modification in coverage amounts of any such insurance
policies.  None of the Company or any of
its Subsidiaries are in breach or default under any such insurance
policies.  There are no material claims
by the Company or any of its Subsidiaries under any such insurance policies as
to which any insurance carrier is denying liability or defending under a reservation
of rights clause.  None of the Company
nor any of its Subsidiaries has any self-insurance arrangement.

 

3.18         Working Capital;
Accounts Receivable.  The amount of
all accounts receivable, unbilled invoices and other debts due or recorded in
the respective records and books of account of the Company and its Subsidiaries
as being due to the Company and its Subsidiaries (less the amount of any
provision or reserve therefor made in the respective records and books of
account of the Company and its Subsidiaries) are valid obligations resulting from
bona fide sales; and to the Company’s Knowledge none of such accounts
receivable or other debts is, or at the Closing Date will be, subject to any
refunds, adjustments, counterclaim or set-off or other defenses except to the
extent of any such provision or reserve.

 

3.19         Inventories.  Neither the Company nor any of its
Subsidiaries own, hold title to or are in physical possession of any inventory.

 

3.20         Suppliers and Customers.  Section 3.20 of the Company Disclosure
Letter sets forth each supplier and customer accounting for more than five
percent (5%) of the consolidated purchases or sales, as the case may be, of the
Company and its Subsidiaries, taken as a whole, for each of the twelve-month
period ended December 31, 2004 and the eight-month period ended August 31,
2005.  No supplier or customer identified
on Section 3.20 of the Company Disclosure Letter has canceled or otherwise
terminated, or, to the Company’s Knowledge, threatened to cancel or otherwise
terminate, its relationship with the Company or any of its Subsidiaries.  The Company has not received any written
notice that any such supplier or customer will, and to the Company’s Knowledge,
no such supplier or customer has any plan or intention to, cancel or otherwise
materially and adversely modify its relationship with the Company or any of its
Subsidiaries or limit its services, supplies or materials to the Company or any
of its Subsidiaries, or its usage or purchase of the services and products of
the Company and its Subsidiaries either as a result of the transactions
contemplated hereby or otherwise.

 

35

 

3.21         Bank Accounts and Powers of
Attorney.  Set forth in Section 3.21
of the Company Disclosure Letter is an accurate and complete list showing (a) the
name and address of each bank in which the Company or any of its Subsidiaries
has an account or safe deposit box, the number of any such account or any such
box and the names of all Persons authorized to draw thereon or to have access
thereto and (b) the names of all Persons, if any, other than corporate
service agents, holding powers of attorney from the Company or any of its
Subsidiaries and a summary statement of the terms thereof.

 

3.22         Disclosure.  None of the Transaction Documents nor the
Company Disclosure Letter contains any untrue statement of a material fact, or
omits any statement of a material fact with respect to the Company necessary to
make the statements contained herein or therein not misleading.  To the Company’s Knowledge, there is no fact
that could reasonably be expected to have a Material Adverse Effect with
respect to the Company which has not been set forth in this Agreement, the
Disclosure Letter, the other Transaction Documents, the Financial Statements or
any Schedule, Exhibit or certificate delivered pursuant to this Agreement.

 

3.23         Related Party Transactions.  No director, officer or employee of the
Company or any of its Subsidiaries or member of his or her immediate family is
currently indebted to the Company, nor is the Company indebted or committed to
make loans or extend or guarantee credit to any of such individuals.  No director, officer or employee of the
Company or any of its Subsidiaries and no member or his or her immediate family
is directly or indirectly interested in any Material Contract.

 

3.24         Non-Disclosure Agreements.  Each employee of the Company and its
Subsidiaries is subject, and upon consummation of the Merger will continue to
be subject, to a valid and enforceable confidential information and intellectual
property assignment agreement by and between the Company and such employee, and
the Company has delivered or made available to Parent a copy of the form of all
such agreements.

 

3.25         Right to Sell and Supply Products.  The Company has the right to sell its
products to any and all third-party customers, directly or indirectly, without (a) limitation,
charge or third-party expense or (b) any violation of any Material
Contract with or other obligation owed to the other party to such Material
Contract.  The Company is not subject to
any Material Contract that (i) would prevent the sale of any of its
products, or create any other contractual restriction (including any
restriction on its use of customer lists, customer or marketing information,
other than as imposed by applicable law), (ii) would prevent the Company
from selling consistent with past practice, or (iii) would (x) cause the
Company to modify its method of sales or marketing activities for its products,
directly or indirectly, through any channel or method, or (y) impose any cost,
royalty, fee or other expense or charge payable to the other party to such
Contract in connection with, the marketing activities of the Company.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB

 

Each of Parent and Sub hereby represents and warrants
to the Company that, except as set forth in the corresponding sections of the
disclosure letter delivered by Parent and Sub to the

 

36

 

Company upon or prior to
entering into this Agreement the (“Parent Disclosure Letter”), the
statements contained in this Article 4 are true and complete as of this
date hereof and will be true and complete as of the Closing Date:

 

4.1           Due Organization, Good
Standing and Corporate Power.  Each
of Parent and Sub has been duly organized and is validly existing as a
corporation and in good standing under the laws of the State of Delaware and
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.  Each of Parent and its Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it, or the
nature of the business conducted by it makes such qualification necessary,
except in such jurisdictions where the failure to be so qualified or licensed
and in good standing has not had, does not have, and could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
on Parent.

 

4.2           Authorization and Validity of
Agreements.  Each of Parent and Sub
has the requisite corporate power and authority to execute and deliver each of
the Transaction Documents to which they are a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.  The execution, delivery and
performance by Parent and Sub of each of the Transaction Documents to which
they are a party and the consummation by each of them of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of each of Parent and Sub, as the case may be, and by Parent, as the
sole shareholder of Sub.  No other corporate
action on the part of either of Parent or Sub is necessary to authorize the
execution, delivery and performance by each of Parent and Sub of each of the
Transaction Documents and the consummation of the transactions contemplated
hereby or thereby.  This Agreement has
been duly and validly executed and delivered by Parent and Sub and constitutes,
and upon the execution and delivery by Parent of the Escrow Agreement, the
Escrow Agreement shall constitute, legal, valid and binding obligations of
Parent and Sub enforceable against each in accordance with their terms, except
to the extent that their enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and to general
equitable principles.

 

4.3           Capitalization; Issuance of
Shares.

 

(a)           The
authorized capital stock of Parent consists of 80,000,000 shares, divided into
75,000,000 shares of Parent Common Stock and 5,000,000 shares of Preferred
Stock, par value $0.001 per share (“Parent Preferred Stock” and together
with the Parent Common Stock the “Parent Capital Stock”).  As of the date hereof: (i) 11,229,241
shares of Parent Common Stock and no shares of Parent Preferred Stock were
issued and outstanding, all of which were validly issued and are fully paid,
nonassessable and are not subject to preemptive rights, (ii) 210,088
shares of Parent Capital Stock were held in the treasury of Parent or by Parent
Subsidiaries, (iii) 906,717 shares of Parent Common Stock were reserved
for issuance upon exercise of outstanding options to purchase shares of Parent
Common Stock granted under Parent’s Employee Option Plan, as amended (the “Parent
Employee Option Plan”), and an additional 236,390 shares of Parent Common
Stock were reserved for issuance under Parent’s Employee Option Plan, and (iv) 287,258
shares of Parent Common Stock were reserved for

 

37

 

issuance upon the exercise of
outstanding options to purchase shares of Parent Common Stock granted under
Parent’s Director Option Plan (the “Parent Director Option Plan”), and
an additional 275,825 shares of Parent Common Stock were reserved for issuance
under Parent’s Director Option Plan.  All
issued and outstanding shares of Parent Common Stock were duly authorized and
are validly issued, fully paid and non-assessable.  Except for stock options issued or authorized
under Parent’s Employee Option Plan or Parent’s Director Option Plan there are
no outstanding or authorized parent stock options or other commitments or
claims of any character, contingent or otherwise, pursuant to which Parent or
any of its Subsidiaries is or may become obligated to issue shares of its
capital stock or any securities convertible into, exchangeable for, or
evidencing the right to subscribe for, any shares of the capital stock of
Parent or any of its Subsidiaries.  There
are no outstanding contractual obligations of Parent or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any Parent Capital Stock or any shares
of capital stock of any Subsidiary of Parent. 
Neither Parent nor any of its Subsidiaries has authorized or outstanding
bonds, debentures, notes or other indebtedness that entitle the holders to vote
(or are convertible or exercisable for or exchangeable into securities which
entitle the holders to vote) with the stockholders of such Person on any matter
or which are convertible into or exchangeable for equity securities of Parent
or any of its Subsidiaries.

 

(b)           The
issuance of the shares of Parent Common Stock pursuant to this Agreement as
Merger Consideration (i) has been duly authorized by Parent’s Board of
Directors and (ii) is not subject to any purchase or call option or first
refusal, preemption or subscription right. 
Such shares have been duly reserved for issuance and, when issued as
provided herein, will be validly issued, fully paid and non-assessable and not
subject to any Lien.  The offer,
issuance, sale and delivery of such shares is and will be in full compliance
with all applicable Laws and exempt from the registration requirements of the
Securities Act and all applicable state securities laws.

 

(c)           There
are no voting agreements with respect to any of the Parent Capital Stock or any
of the shares of capital stock of any of the Subsidiaries of Parent to which
Parent is a party or by which Parent is bound.

 

4.4           Consents and Approvals;
No Violations.  Except for the filing
of the Certificate of Merger as required by the DGCL, the execution and
delivery of the Transaction Documents by Parent and Sub and the consummation by
Parent and Sub of the transactions contemplated hereby and thereby do not and
shall not (w) violate or conflict with any provision of the Certificate of
Incorporation or By-laws of Parent or Sub, (x) violate or conflict with any
statute, ordinance, rule, regulation, order or decree of any Governmental
Entity applicable to Parent or Sub or by which any of their respective
properties or assets is bound, (y) except for the filing of the Registration
Statement and any necessary filings required under states securities laws,
require any filing with, or Permit, consent or approval of, or the giving of
any notice to, any Governmental Entity or (z) result in a violation or
breach of, conflict with, constitute (with or without due notice or lapse of
time or both) a default under, or result in the creation of any Lien upon any
of the properties or assets of Parent or Sub under any agreement or other
instrument required to be filed with the Parent Commission Filings, other than,
in the case of (x), (y) and (z), any such violation, conflict, or other result
that could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Parent or the Surviving Corporation.

 

38

 

4.5           Commission Documents;
Securities Law Compliance.  Except as
set forth in Section 4.5 of the Parent Disclosure Letter, Parent has filed
in a timely manner all required Parent Commission Filings with the Commission
since January 1, 2003.  At the time
of their respective filings, the Parent Commission Filings complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the Commission
promulgated thereunder applicable to such Parent Commission Filings, and none
of the Parent Commission Filings when filed (or, if amended or supplemented by
a subsequent filing, on the date of such subsequent filing) contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

 

4.6           Parent Financials.

 

(a)           The
financial statements of Parent included in the Parent Commission Filings (the “Parent
Financials”) complied as to form, as of their respective dates of filing
with the Commission, in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission
with respect thereto, have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the consolidated
financial position of Parent and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).

 

(b)           Neither
Parent nor any of its Subsidiaries has outstanding any claims, liabilities or
Indebtedness, contingent or otherwise, of any kind whatsoever (whether accrued,
absolute, contingent or otherwise, and whether or not reflected or required to
be reflected on Parent’s most recently prepared balance sheet filed with the
Commission), except for (i) liabilities reflected or reserved against in
Parent’s most recently prepared balance sheet filed with the Commission and (ii) liabilities
which have arisen after the date thereof in the ordinary course of
business.  Except as set forth in Section 4.6(b) of
the Parent Disclosure Letter, no material claims, liabilities or Indebtedness,
contingent or otherwise, of any kind whatsoever (whether accrued, absolute, contingent
or otherwise, and whether or not reflected or required to be reflected on
Parent’s most recently prepared balance sheet filed with the Commission) of
either of Parent or Sub has arisen after the date thereof, other than in the
ordinary course of business.

 

4.7           Broker’s or Finder’s Fee.  No agent, broker, Person or firm acting on
behalf of Parent or Sub is or shall be entitled to any fee, commission or
broker’s or finder’s fees in connection with this Agreement or any of the
transactions contemplated hereby from any of the Parties, or from any Affiliate
of the Parties.

 

4.8           Ownership of Sub and Sub’s
Operations.  All of the issued and
outstanding shares of capital stock of Sub are owned of record and beneficially
by Parent free and clear of any Liens. 
Sub was formed solely for the purpose of engaging in the transactions
contemplated by the Transaction Documents and has not engaged in any business
activities or conducted any operations other than in connection with such
transactions.

 

39

 

4.9           Litigation.

 

(a)           Except
as disclosed in the Parent Commission Filings filed to the date hereof or in Section 4.9
of the Parent Disclosure Letter, there is no action, suit, proceeding at law or
in equity, or any arbitration or administrative or other proceeding by or
before (or to Parent’s Knowledge any inquiry or investigation by) any
Governmental Entity, pending, or, to Parent’s Knowledge, threatened, against
Parent or any of its Subsidiaries or any of their officers, directors or
shareholders in their capacity as such that has had, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
on Parent.

 

(b)           There
are no suits, actions, claims, proceedings or investigations pending or, to
Parent’s Knowledge, threatened, seeking to prevent, materially delay or
challenge the transactions contemplated by this Agreement.  Neither Parent nor any of its Subsidiaries is
subject to any judgment, order or decree entered in any lawsuit or proceeding,
including any judgment, order or decree that may prevent or materially delay
the consummation of the transactions contemplated by this Agreement.  To Parent’s Knowledge, there are no facts,
events or occurrences reasonably likely to result in such a claim.

 

4.10         Absence of Certain Changes or
Events.  Except as disclosed in the
Parent Commission Filings filed to the date hereof, since June 30, 2005 to
the date of this Agreement, there has not occurred (i) any Material
Adverse Effect with respect to Parent, (ii) any amendment to Parent’s
certificate of incorporation or by-laws, (iii) any material change in
accounting methods or practices by Parent, or (iv) any declaration,
setting aside, or payment of a dividend or other distribution with respect to
the Parent Common Stock, or direct or indirect redemption, purchase or other
acquisition (or agreement or resolution to effect the same) by Parent of any of
its capital stock (other than in connection with the exercises of stock
options).

 

ARTICLE 5

COVENANTS

 

5.1           Access to Information
Concerning Properties and Records. 
During the period commencing on the date hereof and ending on the
earlier of (a) the Closing Date and (b) the date on which this
Agreement is terminated pursuant to Section 7.1, the Company shall afford,
and shall cause each of its Subsidiaries to afford, upon reasonable notice,
Parent and Sub and their respective employees, counsel, accountants,
consultants and other authorized representatives, reasonable access during
normal business hours to the officers, directors, employees, accountants,
properties, books and records of the Company and its Subsidiaries in order that
they may have the opportunity to make such investigations as they shall desire
of the affairs of the Company and its Subsidiaries.  The Company shall furnish promptly to Parent
and Sub all information concerning its or its Subsidiaries’ business,
properties and personnel as Parent or Sub may reasonably request.  The Company agrees to cause its officers and
employees to furnish such additional financial and operating data and other
information and respond to such inquiries as Parent or Sub shall from time to
time reasonably request.

 

5.2           Conduct of the Business
of the Company Pending the Closing Date. 
Except as set forth in the corresponding subsections of Section 5.2(b) of
the Company Disclosure Letter, the

 

40

 

Company agrees that, except as
expressly permitted or required by this Agreement or with the prior written
consent of Parent, during the period commencing on the date hereof and ending
at the earlier of (x) the Effective Time and (y) termination of this Agreement
pursuant to Section 7.1:

 

(a)           the
Company and each of its Subsidiaries shall conduct their respective operations
only according to their ordinary and usual course of business consistent with
past practice and shall use their commercially reasonable efforts to preserve
intact their respective business organization, keep available the services of
their officers and employees who are employed by the Company on the date
hereof, maintain satisfactory relationships with licensors, suppliers,
distributors, clients, customers and others having significant business
relationships with them, maintain their Intellectual Property, and preserve and
keep confidential their trade secrets;

 

(b)           neither
the Company nor any of its Subsidiaries shall:

 

(i)            make
any change in or amendment to its Certificate of Incorporation or its By-laws
(or comparable governing documents);

 

(ii)           issue
or sell, or authorize to issue or sell, any shares of its capital stock or any
other securities, or issue or sell, or authorize to issue or sell, any
securities convertible into or exchangeable for, or options, warrants or rights
to purchase or subscribe for, or enter into any arrangement or contract with
respect to the issuance or sale of, any shares of its capital stock or any
other securities, or make any other changes in its capital structure;

 

(iii)          sell,
pledge or dispose of or agree to sell, pledge or dispose of any stock or other
equity interest owned by it in any other Person;

 

(iv)          declare,
pay or set aside any dividend or other distribution or payment with respect to,
or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares
of its capital stock or its other securities;

 

(v)           enter
into any contract or commitment with respect to capital expenditures with a
value in excess of, or requiring expenditures by the Company and its
Subsidiaries in excess of, $50,000, individually, or enter into contracts or
commitments with respect to capital expenditures with a value in excess of, or
requiring expenditures by the Company and its Subsidiaries in excess of,
$50,000, in the aggregate;

 

(vi)          acquire,
by merging or consolidating with, by purchasing an equity interest in or a
portion of the assets of, or by any other manner, any business or any Person,
or otherwise acquire any assets of any Person (other than the purchase of
assets in the ordinary course of business and consistent with past practice);

 

(vii)         except
to the extent required under existing employee and director benefit plans,
agreements or arrangements in effect on the date of this Agreement and set
forth in Section 5.2(b)(vii) of the Company Disclosure Letter,
increase the compensation or fringe benefits of any of its directors, officers
or employees, or grant any severance or termination pay not currently required
to be paid as part of the COC Incentive Payments, or enter into any

 

41

 

employment, consulting or
severance agreement or arrangement with any present or former director, officer
or other employee of the Company or any of its Subsidiaries, or, except to
comply with this Agreement, applicable law or Section 280G of the Code,
establish, adopt, enter into or amend or terminate any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the benefit of
any directors, officers or employees;

 

(viii)        transfer,
lease, license, guarantee, sell, mortgage, pledge, dispose of, subject to any
Lien (other than a Lien permitted hereby) or otherwise encumber any assets, or
incur or modify any Indebtedness or other liability, other than in the ordinary
course of business consistent with past practice, or issue any debt securities
or assume, guarantee or endorse or otherwise as an accommodation become responsible
for the obligations of any Person or make any loan or other extension of
credit;

 

(ix)           other
than in the ordinary course of business, enter into any agreement for the
acquisition by or license to the Company or any of Subsidiaries of any software
or technology of any third-party;

 

(x)            except
with regard to any customer account receivable settled in the ordinary course
of business (but in no event in excess of $20,000), agree to the settlement of
or waive any claim or litigation;

 

(xi)           except
as required by applicable law or GAAP, make any change in its method of
accounting;

 

(xii)          adopt
or enter into a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any of its Subsidiaries (other than the Merger);

 

(xiii)         (x)
incur, assume or prepay any Indebtedness or guarantee any such Indebtedness of
another Person, other than intercompany indebtedness or guarantees of
intercompany indebtedness among the Company and any direct or indirect
wholly-owned Subsidiary of the Company, or (y) make any loans, extensions of
credit or advances to any other Person, other than to the Company or to any
direct or indirect wholly-owned Subsidiary of the Company;

 

(xiv)        other
than pursuant to arrangements in effect on the date hereof and as set forth in Section 5.2(b)(xiv)
of the Company Disclosure Letter, accelerate the payment, right to payment or
vesting of any bonus, severance, profit sharing, retirement, deferred
compensation, stock option, insurance or other compensation or benefits;

 

(xv)         pay,
discharge or satisfy any material claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise);

 

(xvi)        enter
into, materially modify, amend or terminate any Material Contract or waive any
of its material rights or claims;

 

42

 

(xvii)       enter
into any agreement or arrangement that materially limits or otherwise restricts
the Company, any of its Subsidiaries, or any successor thereto, or that would,
after the Effective Time, limit or restrict the Surviving Corporation and its
affiliates (including Parent) or any successor thereto, from engaging or
competing in any line of business or in any geographic area; or

 

(xviii)      other
than pursuant to arrangements set forth in Section 5.2(b)(xviii) of the
Company Disclosure Letter, plan, announce, implement or effect any reduction in
force, lay-off, early retirement program, severance program or other program or
effort concerning the termination of employment of employees of the Company or
its Subsidiaries;

 

(xix)         take
any action, engage in any transaction or enter into any agreement which would
cause any of the representations or warranties set forth in Article 3 that
are subject to, or qualified by, a “Material Adverse Effect,” “material adverse
change” or other materiality qualification to be untrue as of the Effective
Time, or any such representations and warranties that are not so qualified to
be untrue in any material respect;

 

(xx)          other
than pursuant to arrangements set forth in Section 5.2(b)(xx) of the
Company Disclosure Letter, purchase or acquire, or offer to purchase or
acquire, any shares of Company Stock;

 

(xxi)         take
any action, including the adoption of any stockholder-rights plan or amendments
to its Certificate of Incorporation or By-laws (or comparable governing
documents), which would, directly or indirectly, restrict or impair the ability
of Parent to vote or otherwise to exercise the rights and receive the benefits
of a stockholder with respect to securities of the Company that may be acquired
or controlled by Parent or Sub, or which would permit any stockholder to
acquire securities of the Company on a basis not available to Parent or Sub in
the event that Parent or Sub were to acquire any shares of Company Stock;

 

(xxii)        (v) file
or cause to be filed any amended Returns or claims for refund of Taxes, (w)
prepare any Return in a manner which is inconsistent with the past practices of
the Company or a Subsidiary, as the case may be, with respect to the treatment
of items on such Returns; (x) make any Tax election in a manner which is
inconsistent with the past practices of the Company or a Subsidiary; (y) incur
any liability for Taxes other than in the ordinary course of business or as
required by this Agreement; (z) enter into any settlement or closing agreement
with a taxing authority;

 

(xxiii)       fail
to maintain with financially responsible insurance companies insurance on its
tangible assets and its businesses in such amounts and against such risks and
losses as are consistent with past practice; or

 

(xxiv)       agree,
in writing or otherwise, or commit to take any of the foregoing actions.

 

5.3           Company Stockholders’
Approval.  The Company shall cause a
special meeting of its stockholders to be duly called and held as soon as
practicable after the date hereof (“Company Stockholders’ Meeting”), or
take action by written consent, for the purpose of

 

43

 

approving the Merger, the
Transaction Documents and the transactions contemplated thereby which require
the approval of Company Stockholders and shall, with the assistance of Parent,
prepare such information documents to solicit the proxies or written consents of
such stockholders as are reasonably necessary to obtain the stockholder
approvals necessary.  The Company will,
through its Board of Directors, recommend to its stockholders approval of the
transactions contemplated by the Transaction Documents and will not, unless it
receives a Superior Acquisition Proposal, rescind such recommendation; provided,
however, that no officer or director of the Company shall be required to
violate any fiduciary duty in connection therewith.  The Company will provide to Parent drafts of
any materials to be mailed to the Company Stockholders and, prior to mailing
such materials, shall accept reasonable comments from Parent.

 

5.4           Commercially Reasonable Efforts.  Subject to the terms and conditions provided
herein, each of the Company, Parent and Sub shall, and the Company shall cause
each of its Subsidiaries to, cooperate and use their commercially reasonable
efforts to take, or cause to be taken, all appropriate action, and do, or cause
to be done, and assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Merger and the other transactions
contemplated hereby, including the satisfaction of the respective conditions
set forth in Article 6, and to make, or cause to be made, all filings
necessary, proper or advisable under applicable Laws to consummate and make
effective the transactions contemplated by this Agreement, including their
commercially reasonable efforts to obtain, prior to the Closing Date, all
licenses, Permits, consents, approvals, authorizations, qualifications and
orders of Governmental Entities and parties to contracts with the Company and
its Subsidiaries as are necessary for consummation of the transactions
contemplated by this Agreement and to fulfill the conditions to the Merger; provided,
however, that no loan agreement or contract for borrowed money shall be
repaid, in whole or in part, except as currently required by its terms, and no
Contract shall be amended to increase the amount payable by the Company or its
Subsidiaries thereunder or otherwise to be more burdensome to the Company or
any of its Subsidiaries in order to obtain any such consent, approval or
authorization without first obtaining the approval of Parent.

 

5.5           Notification of Certain
Matters.  The Company shall promptly
notify Parent of the occurrence or non-occurrence of any fact or event which,
to the Knowledge of the Company, has caused or would reasonably likely cause (i) any
representation or warranty made by it in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (ii) any covenant, condition or agreement under this
Agreement not to be complied with or satisfied by it in any material respect; provided,
however, that no such notification shall modify the representations and
warranties of the Company or the conditions to the obligations of the Company
or Parent hereunder.  The Company shall
give prompt notice to Parent of any notice or other communication from any
third-party alleging that the consent of such third-party is or may be required
in connection with the transactions contemplated by this Agreement.

 

5.6           Stock Option and Other Plans.  At or prior to the Effective Time, the
Company shall cancel each outstanding Company Option under the Company Option
Plans, whether vested or unvested, for no consideration.

 

44

 

5.7           Company Warrants.  At or prior to the Effective Time, the
Company shall use commercially reasonable efforts to ensure that each Company
Warrant shall either be exercised and converted into Company Stock or cancelled
and terminated for no consideration and be of no further force or effect.

 

5.8           Public Announcements.  Parent and the Company shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement and
shall not issue any such press release or make any such public statement prior
to such consultation and review by the other party of such release or
statement, or without the prior written consent of the other party, which shall
not be unreasonably withheld; provided, however, that Parent may,
without the prior written consent of the other party, issue such press release
or make such public statement as may be required by law or by any listing
agreement with a national securities exchange or automated quotation system to
which Parent or any Affiliate of Parent is a party, if it has attempted to
consult with the Company and to obtain the Company’s consent, but has been
unable to do so in a timely manner.

 

5.9           Registration

 

(a)           Parent,
at its cost and expense, shall use its commercially reasonable efforts to (A) prepare
and file with the Commission a registration statement with respect to the
shares of Parent Common Stock issued as Merger Consideration hereunder (the “Registration
Statement”) by December 12, 2005, (B) cause the Registration Statement
to become effective as soon as reasonably possible thereafter, and (C) maintain
the effectiveness of the Registration Statement on a continuous basis pursuant
to Rule 415 under the Securities Act until the earlier of (x) the
disposition of all such registered shares by the Company Preferred Stockholders
and the COC Stock Recipients (collectively, the “Registrable Holders”)
or (y) the Registrable Holders being able to dispose of all such shares
pursuant to Rule 144(k).  Without
limiting the generality of the foregoing, Parent shall:

 

(i)            Prepare
and file with the Commission such amendments and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
Registration Statement.

 

(ii)           Furnish
to Registrable Holders registering shares of Parent Common Stock such numbers
of copies of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of Parent Common
Stock owned by them.

 

(iii)          Notify
each holder of Parent Common Stock covered by the Registration Statement at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing or causing the
suspension of the effectiveness of the Registration Statement or sales of such
Parent Common Stock thereunder.

 

45

 

(iv)          Cause all such Parent Common Stock
registered pursuant hereto to be listed on each securities exchange on which
similar securities issued by Parent are then listed, which shall be effective
on or before the effective date of the Registration Statement.

 

(v)           Provide a transfer agent and
registrar for all Parent Common Stock registered pursuant hereto and a CUSIP
number for all such Parent Common Stock, in each case not later than the
effective date of such registration.

 

(b)           If upon advice of counsel, the filing
of a Registration Statement (or permitting such Registration Statement to
become effective) in the near future would be reasonably likely to cause a
violation of any federal or state securities Laws and result in a potential
material liability to Parent, then Parent shall have the right to defer such
filing (or effectiveness), provided, that Parent shall not defer its
obligation in this manner for more than forty-five (45) days or an aggregate of
ninety (90) days during any 12-month period.

 

(c)           If the Registration Statement has not
been declared effective by the Commission on or before the six-month
anniversary of the Closing, then, until such time as the Registration Statement
is declared effective, Parent shall pay to the Representative (on behalf of all
Registrable Holders) an aggregate penalty in immediately available funds of
$50,000 in cash within three Business Days of such six-month anniversary and an
additional $50,000 for each subsequent thirty-day period after the six-month
anniversary, within three Business Days of the expiration of each subsequent
thirty-day period, during which such Registration Statement has not become
effective or does not remain effective; provided, however, that
no such penalty shall become due and payable, and the six-month deadline
contemplated by this Section 5.9(c) shall be tolled, if and to the
extent that Parent’s inability to cause such Registration Statement to become
or remain effective has been caused by any action or inaction of the
Representative, any Company Preferred Stockholder, COC Stock Recipient, the
Company’s current or former auditors or any officer, director, employee, agent,
attorney or other representative of any of the foregoing.

 

(d)           Parent shall bear all of its expenses
reasonably incurred in connection with the registration and qualification of
the shares registered pursuant to this Section 5.9 and up to $20,000 of expenses reasonably incurred by the Registrable
Holders, including one counsel for the Registrable Holders (which
counsel shall be selected by the Representative and shall be reasonably
acceptable to Parent), and the Registrable Holders shall pay all other fees and
expenses of counsel to the Registrable Holders .  Each Registrable Holders  shall cooperate with Parent in the preparation,
filing and process of securing the effectiveness of the Registration Statement
and shall furnish to Parent such information relating to it and such further
and supplemental information as may be necessary or as may be reasonably
requested by Parent for use in the Registration Statement and any amendments or
supplements thereto.  Parent will advise
the Registrable Holders  of the
effectiveness of the Registration Statement, of the issuance of any stop order
with respect to the effectiveness thereof, of the suspension of the
qualification of the Parent Common Stock for offering or sale in any
jurisdiction, or of the initiation or threat of any proceeding for any such
purpose.  In the event that, either
before or after the effectiveness of the Registration Statement, any
Registrable Holder  shall distribute
Merger Shares to its partners, such Registrable Holder shall so advise Parent
and provide such information as shall be necessary to permit an amendment to
the Registration Statement to

 

46

 

provide information with respect to such partners, as selling
securityholders.  Promptly following
receipt of such information, Parent shall file an appropriate amendment to the
Registration Statement reflecting the information so provided; provided,
however, that all reasonable expenses of Parent resulting from such
amendment shall be borne by such Registrable Holder.

 

(e)           With a view to making available to
the Registrable Holders the benefits of Rule 144(k) promulgated under the
Securities Act and any other rule or regulation of the Commission that may
at any time permit a Registrable Holder to sell securities of Parent to the
public without registration, Parent shall use its commercially reasonable
efforts to:

 

(i)            make and keep public information
available, as those terms are understood and defined in Commission Rule 144,
at all times so long as Parent remains subject to the periodic reporting
requirements under Sections 13 or 15(d) of the Exchange Act;

 

(ii)           file with the Commission in a timely
manner all reports and other documents required of Parent under the Securities
Act and the Exchange Act; and

 

(iii)          furnish to any Registrable Holders ,
so long as the Registrable Holders  owns
any Parent Common Stock, forthwith upon request (1) a written statement by
Parent that it has complied with the reporting requirements of Commission Rule 144,
the Securities Act and the Exchange Act, (2) a copy of the most recent
annual or quarterly report of Parent and such other reports and documents so
filed by Parent, and (3) such other information as may be reasonably
requested in availing any Registrable Holders of any rule or regulation of
the Commission which permits the selling of any such securities without
registration.

 

(f)            To the extent permitted by
applicable Law, Parent will indemnify each Registrable Holder, each of its
officers, directors, members, managers, trustees and partners, and each person
controlling each Registrable Holder 
within the meaning of Section 15 of the Securities Act, with
respect to any registration effected pursuant this Section 5.9, against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification or the
like) made in such registration, qualification or compliance, or based on 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, or
any violation by Parent of the Securities Act or the Exchange Act or any rule or
regulation thereunder applicable to Parent or the rules and regulations of
any applicable stock exchange or quotation system where Parent’s equity
securities are listed and relating to action or inaction required of Parent in
connection with any such registration, qualification or compliance, and will
reimburse each of the Registrable Holders, each of its officers, directors and
partners, and each person controlling each of the Registrable Holders, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action, provided,
that Parent will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission based upon written information furnished to Parent
by any Registrable Holder.

 

47

 

(g)           To the extent permitted by applicable
Law, each Registrable Holder will severally, but not jointly, indemnify Parent,
each of its directors and officers, and each person who controls Parent within
the meaning of Section 15 of the Securities Act, each other Registrable
Holder and each of their officers, directors, members, managers and partners,
and each person controlling such other Registrable Holder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact made by such Registrable Holders contained in the Registration Statement,
or any prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated by
such Registrable Holder therein or necessary to make the statements by such
Registrable Holder therein not misleading, and will reimburse Parent and each
other Registrable Holder, and their respective directors, officers, partners,
persons or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action.

 

(h)           Each party entitled to
indemnification under this Section 5.9 (the “Section 5.9
Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Section 5.9 Indemnifying Party”)
promptly after such Section 5.9 Indemnified Party has actual knowledge of
any claim as to which indemnity may be sought, and shall permit the Section 5.9
Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom; provided, that counsel for the Section 5.9
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Section 5.9
Indemnified Party (whose approval shall not unreasonably be withheld,
conditioned or delayed) and the Section 5.9 Indemnified Party may
participate in such defense at such party’s expense (unless the Section 5.9
Indemnified Party shall have reasonably concluded that there may exist a
material conflict of interest between the Section 5.9 Indemnifying Party
and the Section 5.9 Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Section 5.9
Indemnifying Party), and provided, further, that the failure of any Section 5.9
Indemnified Party to give notice as provided herein shall not relieve the Section 5.9
Indemnifying Party of its obligations hereunder except to the extent that the Section 5.9
Indemnifying Party is materially prejudiced thereby.  No Section 5.9 Indemnifying Party in the
defense of any such claim or litigation shall, except with the consent of each Section 5.9
Indemnified Party (which consent shall not be unreasonably withheld,
conditioned or delayed), consent to entry of any judgment or enter into any settlement
that does not release such Section 5.9 Indemnified Party from all
liability in respect to such claim or litigation.  Each Section 5.9 Indemnified Party shall
furnish such information regarding itself or the claim in question and such
other support as any Section 5.9 Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense
of such claim and litigation resulting therefrom.

 

(i)            If the indemnification provided for
in this Section 5.9 is held by a court of competent jurisdiction to be
unavailable to a Section 5.9 Indemnified Party with respect to any loss,
liability, claim, damage or expense referred to herein, then the Section 5.9
Indemnifying Party, in lieu of indemnifying such Section 5.9 Indemnified
Party hereunder, shall contribute to the amount paid or payable to such Section 5.9
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the Section 5.9
Indemnifying Party on the one hand and of the Section 5.9

 

48

 

Indemnified Party on the other in connection with the statements or
omissions which resulted in such loss, liability, claim, damage or expense, as
well as any other relevant equitable considerations.  The relative fault of the Section 5.9
Indemnifying Party and of the Section 5.9 Indemnified Party 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 Section 5.9
Indemnifying Party or by the Section 5.9 Indemnified Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

(j)            For not more than forty-five (45)
consecutive days or for a total of not more than ninety (90) days in any twelve
(12) month period, Parent may delay the disclosure of material non-public
information concerning Parent, by suspending the use of any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) prepared in connection with any
registration to be effected pursuant this Section 5.9 containing such
information, if, upon advice of counsel, such action is reasonably necessary to
avoid a violation of any federal or state securities Laws and cause a potential
material liability to Parent (an “Allowed Delay”); provided, that
Parent shall promptly (1) notify the Registrable Holders in writing of the
existence of material non-public information giving rise to an Allowed Delay, (2) advise
the Registrable Holders in writing to cease all sales under the Registration
Statement until the end of the Allowed Delay and (3) use commercially
reasonable efforts to terminate an Allowed Delay as promptly as
practicable.  If the Allowed Delay
exceeds ninety (90) days in any twelve (12) month period, Parent shall pay to
the Representative (on behalf of all Registrable Holders) an aggregate penalty
in immediately available funds of $50,000 in cash within three (3) Business
Days of such ninetieth (90th) day and an additional $50,000 for each
subsequent thirty-day period after the ninetieth (90th) day, within
three (3) Business Days of the expiration of each subsequent thirty-day
period, that such Allowed Delay continues; provided, however,
that no such penalty shall become due and payable, and the deadline
contemplated by this Section 5.9 shall be tolled, if and to the extent
that Parent’s inability to permit the use of such Registration Statement has
been caused by any action or inaction of the Representative, any Company
Preferred Stockholder, COC Stock Recipient, the Company’s current or former
auditors or any officer, director, employee, agent, attorney or other
representative of any of the foregoing.

 

5.10         Financial
Statements.  If requested by Parent,
the Company shall take all reasonable actions necessary to assist Parent in preparing
a pro forma consolidated balance sheet and pro forma consolidated statements of
income in compliance with, and for the periods required by, the rules and
regulations promulgated by the Commission, including Regulation S-X under the
Securities Act.

 

5.11         Employee and Employee
Benefits Matters.

 

(a)           Other than the employees of the
Company indicated in writing by Parent at least ten (10) Business Days
prior to the Closing (the “Continuing Employees”), the Company shall
terminate all employees of the Company immediately prior to the Closing (the “Terminated
Company Employees”).  The name of
each Terminated Company Employee shall be specified on Section 5.11 of the
Parent Disclosure Letter and, unless another later date is specified thereon,
the termination date for each Terminated Company Employee shall be the

 

49

 

Closing Date immediately prior
to the Effective Time.  The Company shall
pay, or after the Effective Time, the Parent shall cause the Surviving Corporation
to pay, the Terminated Company Employees for their accrued salary and wages
through the termination date plus unused paid time off, in each case, as
required by applicable Law.  The Company
shall pay, or after the Effective Time, the Parent shall cause the Surviving
Corporation to pay, to Terminated Company Employees any amount to which they
are entitled as described in Section 5.2(b)(xiv) of the Company Disclosure
Letter in accordance with the Company’s contractual obligations.

 

(b)           In addition to any obligations
imposed by applicable Laws and the terms of any employment agreements and
Employee Benefit Plans, Parent will, or will cause the Surviving Corporation,
to: (i) continue to employ Continuing Employees at the same wage level, or
higher, as in effect at the Closing for a period of not less than one (1) year
after the Closing Date; (ii) maintain the Company group medical and dental
plans and Code section 125 plans through the end of the calendar year in
which the Closing occurs, and the Continuing Employees shall continue their
participation in such plans without interruption and without any diminution of
benefits according to the terms and conditions of the plans; (iii) provide
the Continuing Employees with employee benefits, including, but not limited to,
medical and dental (subject to (ii) hereof), disability, life insurance
and 401(k) plan benefits, substantially similar in the aggregate to those
provided by the Company as of the Closing Date; and (iv) treat the service
of the Continuing Employees with the Company prior to the Closing Date as
service with the Surviving Corporation and its Affiliates for eligibility and
vesting purposes (but not for purposes of benefit accrual) under the employee
benefit plans, programs policies and arrangements of the Surviving Corporation
and its Affiliates.  No pre-existing
conditions limitation or exclusion shall apply to participation or coverage for
Continuing Employees and their dependents under a Parent or Surviving
Corporation plan that is a group health plan. 
The Parent or the Surviving Corporation shall cause the trustee of the
Parent 401(k) Plan to accept rollovers of the account balances and any
promissory notes evidencing outstanding loans of the Continuing Employees from
the 2004 Company 401(k) Plan.  The
Surviving Corporation shall credit the Continuing Employees with their accrued
paid time off as of the Closing. 
Immediately following the Closing, the Continuing Employees shall be
covered under Parent or Surviving Corporation severance policy, if any, with
full credit for all of their service with the Company and its predecessors.

 

(c)           Subject to the terms of any written
employment agreements set forth on Section 3.10(a) of the Company
Disclosure letter, any Employee Benefit Plans, and applicable Laws, except as
set forth in this Section 5.11, nothing contained in this Section 5.11
will preclude Parent or the Surviving Corporation from changing the terms and
conditions or terminating the employment of any Continuing Employee, or from
amending or terminating any Employee Benefit Plan; provided, however,
that the Surviving Corporation shall bear all costs incurred as a result of any
such change, amendment, or termination.

 

(d)           Surviving Corporation shall have the
responsibility to provide COBRA or state law continuation coverage for all
Continuing Employees and their covered dependents and for any individuals who
have COBRA or state law continuation coverage under the Company group health
plan at the time of Closing, including the Terminated Company Employees.  If Surviving Corporation terminates the
Company group health plan, the individuals whose COBRA or state law
continuation coverage has not expired shall have the

 

50

 

right to elect coverage under a
Parent or Surviving Corporation group health plan that provides substantially
similar coverage.

 

5.12         NASDAQ
Listing.  On or before the Effective
Time, Parent shall cause the shares of Parent Common Stock issuable pursuant to
this Agreement to be listed for quotation on the Nasdaq National Market under
applicable law.

 

5.13         Acquisition
Proposals.

 

(a)           From and after the date of this
Agreement until the earlier to occur of the Closing or termination of this
Agreement pursuant to its terms, the Company will not, and the Company will
instruct its directors, officers, and employees not to, directly or indirectly (i) solicit,
initiate, entertain or encourage submission of any Acquisition Proposal by any
person, entity or group (other than Parent and its affiliates, agents, and
representatives) or (ii) participate in any discussions or negotiations
with, or disclose any non-public information concerning the Company to, or
afford access to the properties, books or records of the Company, or otherwise
assist or facilitate, or enter into any agreement or understanding with, any
person, entity or group (other than Parent and its affiliates, agents, and
representatives) in connection with any Acquisition Proposal with respect to
the Company ((i) and (ii) are collectively referred to as “Alternative
Efforts”).  For purposes of this
Agreement, an “Acquisition Proposal” means any proposal or offer
relating to (1) any merger, consolidation, sale or license of all or
substantially all of the assets or similar transactions involving the Company
(other than licenses granted by the Company in the ordinary course of
business), (2) dissolution of the Company, or (3) sales by the
Company of any capital stock (including by way of a tender offer or an exchange
offer) or rights thereto or debt instruments of the Company.  The Company will promptly (x) notify Parent
if, after the date of this Agreement, either the Company receives any written
proposal or written inquiry or written request for information in connection
with an Acquisition Proposal or potential Acquisition Proposal and (y) notify
Parent of the significant terms and conditions of any such Acquisition
Proposal.  In addition, from and after
the date of this Agreement until the Closing the Company will not, and will
instruct its directors, officers, and employees not to, directly or indirectly,
make or authorize any public statement, recommendation or solicitation in
support of any Acquisition Proposal made by any person, entity or group other
than Parent.

 

(b)           Notwithstanding Section 5.13(a) above,
if a Superior Acquisition Proposal is made to the Company and not withdrawn and
the Board of Directors of the Company determines in good faith, after
consultation with outside counsel, that, in light of such Superior Acquisition
Proposal, it is necessary to conduct Alternative Efforts with respect to the
person or group making the Superior Acquisition Proposal in order to fulfill
its fiduciary duties to the Company Stockholders under applicable Law, the
Board of Directors of the Company shall conduct such Alternative Efforts
following receipt of the Superior Acquisition Proposal, but only after the
fifth Business Day following Parent’s receipt of written notice advising Parent
that the Board of Directors of the Company intends to conduct such Alternative
Efforts.  During such five-day period, if
requested by Parent, the Company and its advisors shall negotiate in good faith
with Parent to make such adjustments in the terms and conditions of this Agreement
so that as adjusted the proposal of Parent would be superior to the Superior
Acquisition Proposal, in light of all of the facts and circumstances, so that
in the reasonable judgment of the

 

51

 

Board of Directors of the
Company the Board of Directors would recommend that the Company proceed with
the transactions proposed by Parent on such adjusted terms.  For purposes of this Agreement, “Superior
Acquisition Proposal” shall mean an unsolicited, bona fide offer made by a
third-party to consummate any of the following transactions: (x) a sale or
other disposition by the Company of all or substantially all of its assets or
(y) the acquisition by any person or group (including by merger, exchange offer
or issuance by the Company) directly or indirectly, of beneficial ownership or
a right to acquire beneficial ownership of shares representing a majority of
the voting power of the then outstanding shares of Company Stock, on terms that
the Board of Directors of the Company determines in good faith to be more
favorable to the Company Stockholders than the terms of the Merger; provided,
however, that any such offer may be deemed to be a Superior Acquisition
Proposal only if any financing required to consummate the transaction
contemplated by such offer is committed.

 

5.14         COC
Incentive Payments.  Within three (3) Business
Days after the Closing, Parent shall cause the Surviving Corporation to make
the COC Cash Payments and COC Stock Payments as set forth on Exhibit F (which
Exhibit shall be prepared and delivered one day prior to Closing).  Ninety percent (90%) of such COC Cash
Payments and COC Stock Payments shall be paid to COC Cash Recipients and COC
Stock Recipients, respectively, at the Effective Time and the remaining ten
percent (10%) of such COC Cash Payments and COC Stock Payments shall be
deposited into the Cash Escrow Fund and Stock Escrow Fund, respectively,
established pursuant to Section 2.5. 
The shares so deposited into the Stock Escrow Fund, and the cash so
deposited into the Cash Escrow Fund, shall be paid to such COC Cash Recipients
and COC Stock Recipients, if and when such cash or Parent Common Stock becomes
distributable from the Cash Escrow Fund or Stock Escrow Fund to such COC
Recipients in accordance with the terms of this Agreement and the Escrow
Agreement.  All amounts of stock and cash
shall be payable under this Section shall be subject to reduction for any
and all amounts required to be deducted and withheld from such payments under
any applicable provision of federal, state, local or foreign laws, as provided
in Section 2.8.  The payment of  such COC Cash Payments or COC Stock Payments
shall be contingent upon each COC Recipient providing to Parent: (1) a
release, in form and substance acceptable to Parent, from any and all claims
that such COC Recipient may have had under the Company’s Change of Control
Incentive Plan or with respect to the COC Cash Payment and/or COC Stock Payment
that he or she is to receive thereunder and (2) an instrument (the “COC
Acceptance Form”) in which he or she shall have agreed: (i) to the
appointment of the Representative as representative of the COC Recipients in
accordance with the terms of Article 8, (ii) to the indemnification
provisions of Article 9, (iii) that, in accordance with this Section,
Parent will place into escrow a portion of the COC Cash Payments or COC Stock
Payments deliverable to such COC Recipient subject to and for the purpose of
securing the COC Recipients’ indemnity obligations under this Agreement, (iv) that
the Stock COC Payments deliverable to such COC Recipient pursuant to this
Agreement shall not be sold, transferred, pledged, disposed of or encumbered
(each, a “Transfer”) (except for Permitted Transfers) for the period
beginning on the Closing Date and ending, on the date falling ninety (90) days
after the Effective Time, and (v) that each certificate representing
shares of Parent Common Stock constituting the COC Stock Payments shall bear
appropriate legends referring to such restrictions and to any restrictions on
transfer under applicable securities laws.

 

52

 

ARTICLE 6

CONDITIONS PRECEDENT

 

6.1           Conditions Precedent to
Each Party’s Obligation to Effect the Merger.  The respective obligations of each party to
effect the Merger are subject to the satisfaction or waiver (subject to
applicable law), at or prior to the Effective Time, of each of the following
conditions:

 

(a)           Injunction.  No temporary restraining order, preliminary
or permanent injunction or other order shall have been issued by any federal,
state or foreign court or by any federal, state or foreign Governmental Entity,
and no other legal restraint or prohibition preventing the consummation of the
Merger shall be in effect.

 

(b)           Statutes.  No federal, state or foreign statute, rule,
regulation, executive order, decree or order of any kind shall have been
enacted, entered, promulgated or enforced by any court or Governmental Entity
which prohibits, restrains, restricts or enjoins the consummation of the Merger
or has the effect of making the Merger illegal.

 

(c)           Execution of Escrow Agreement.  The Escrow Agent shall have executed the
Escrow Agreement and delivered it to Parent and the Company.

 

(d)           Approval of Company Stockholders.  This Agreement shall have been adopted and
approved by the Company Stockholders in the manner required by the DGCL.

 

6.2           Additional Conditions to
Obligations of the Company.  The
obligations of the Company to consummate the Merger and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing of each of the following conditions, any of which may be waived,
in writing, exclusively by the Company:

 

(a)           Representations and Warranties.  The representations and warranties of Parent
and Sub contained in this Agreement, the other Transaction Documents and all
other documents delivered pursuant hereto or thereto shall have been true and
correct in all material respects when made and shall be true and correct in all
material respects on and as of the Closing Date except for representations and
warranties which address matters only as of a particular date (which shall
remain true and correct in all material respects as of such date) and except to
the extent that such representations and warranties contain a materiality or
Material Adverse Effect qualifier, in which case such representations and
warranties shall be true and correct in all respects.  The Company shall have received a certificate
with respect to each of the foregoing signed on behalf of each of Parent and
Sub by a duly authorized officer of each of Parent and Sub.

 

(b)           Agreements and Covenants.  Parent and Sub shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by them on or prior to the
Effective Time, and the Company shall have received a certificate to such
effect signed by a duly authorized officer of Parent.

 

53

 

(c)           Legal Opinion.  The Company’s Stockholders shall have
received a legal opinion from Parent’s external legal counsel in form and
substance reasonably satisfactory to the Representative with respect to the
matters set forth on Exhibit B.

 

(d)           Escrow Agreement.  The Representative shall have received the
Escrow Agreement duly executed by Parent.

 

(e)           Secretary’s Certificate.  Parent shall have delivered to the
Representative a copy of (i) the text of the resolutions adopted by the
Boards of Directors of Parent and Sub authorizing the execution, delivery and
performance of the Transaction Documents and the consummation of the
transactions contemplated by this Agreement, (ii) the text of the
resolutions adopted by the stockholder of Sub approving and adopting the
Merger, this Agreement and the transactions contemplated hereby and (iii) the
Certificate of Incorporation and Bylaws of Parent and Sub, along with a
certificate executed on behalf of Parent, the stockholder of Sub, and Sub by
their respective corporate secretaries certifying to the Representative that
such copies are true, correct and complete copies of such resolutions,
Certificate of Incorporation and Bylaws, respectively, and that such
resolutions, Certificate of Incorporation and Bylaws were duly adopted and have
not been amended or rescinded.

 

(f)            No Material Adverse Effect.  Since the date of this Agreement, there shall
not have been any circumstance, event or occurrence that, individually, or in
the aggregate, has resulted, or could be reasonably expected to result, in a
Material Adverse Effect with respect to Parent. 
The Company shall have received a certificate with respect to the
foregoing signed on behalf of Parent by a duly authorized officer of Parent.

 

(g)           Additional Documents.  Parent and Sub shall have delivered such
other documents as the Company shall have reasonably requested.

 

6.3           Additional Conditions to
the Obligations of Parent and Sub. 
The obligations of Parent and Sub to consummate the Merger and the
transactions contemplated by this Agreement shall be subject to the
satisfaction at or prior to the Closing of each of the following conditions,
any of which may be waived, in writing, exclusively by Parent:

 

(a)           Representations and Warranties.  The representations and warranties of the
Company contained in this Agreement and all other documents delivered pursuant
hereto to which it is a party shall have been true and correct in all material
respects when made and shall be true and correct in all material respects on
and as of the Closing Date, except for representations and warranties which
address matters only as of a particular date (which shall remain true and
correct in all material respects as of such date) and except to the extent that
such representations and warranties contain a materiality or Material Adverse
Effect qualifier, in which case such representations and warranties shall be
true and correct in all respects.  Parent shall have received a
certificate with respect to each of the foregoing signed on behalf of the
Company by a duly authorized officer of the Company.

 

(b)           Agreements and Covenants.  The Company shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective Time,
and Parent and Sub

 

54

 

shall have received a
certificate to such effect signed by a duly authorized officer of the Company.

 

(c)           Fees.  Parent shall have received invoices for all
Company Transaction Expenses incurred by the Company, and, effective upon
payment of such fees, a full release from the obligees of such indebtedness or
fees and in form and substance satisfactory to Parent.

 

(d)           No Material Adverse Effect.  Since the date of this Agreement, there shall
not have been any circumstance, event or occurrence that, individually, or in
the aggregate, has resulted, or could be reasonably expected to result, in a
Material Adverse Effect with respect to the Company.  Parent shall have received a certificate with
respect to the foregoing signed on behalf of the Company by a duly authorized
officer of the Company.

 

(e)           Secretary’s Certificate.  The Company shall have delivered to Parent a
copy of (i) the text of the resolutions adopted by the Board of Directors
of the Company authorizing the execution, delivery and performance of this
Agreement, the other Transaction Documents, and the consummation of all of the
transactions contemplated by this Agreement, (ii) the text of the
resolutions adopted by the stockholders of the Company approving and adopting
the Merger, this Agreement and the transactions contemplated hereby and (iii) the
Certificate of Incorporation and Bylaws of the Company, along with a
certificate executed on behalf of the Company by its corporate secretary
certifying to Parent that (1) such copies are true, correct and complete
copies of such resolutions, Certificate of Incorporation and Bylaws,
respectively, and that such resolutions, Certificate of Incorporation and
Bylaws were duly adopted and have not been amended or rescinded and (2) that
the Company Stockholders have approved and adopted the Merger, this Agreement
and the transactions contemplated hereby.

 

(f)            Legal Opinion.  Parent and Sub shall have received a legal
opinion from the Company’s external legal counsel in form and substance
reasonably satisfactory to Parent with respect to the matters set forth on Exhibit C.

 

(g)           Escrow Agreement.  Parent shall have received the Escrow
Agreement duly executed by the Representative.

 

(h)           Third-Party Consents.  The Company shall have delivered to Parent
all necessary consents, waivers and approvals of (i) any Governmental
Entity and (ii) those parties to any Contract set forth in Section 3.15
of the Company Disclosure Letter.

 

(i)            Cancellation of Certain
Agreements.  The Company shall have
delivered evidence satisfactory to Parent of the cancellation of agreements
identified on Section 3.3(d) of the Company Disclosure Letter, or
such agreements shall be cancelled pursuant to their terms upon the Effective
Time.

 

(j)            Certificate of Good Standing.  Parent shall have received a long-form
certificate of good standing with respect to the Company, dated within three (3) days
prior to Closing, from the Secretary of State of the State of Delaware.

 

55

 

(k)           Cancellation of all Company
Options and Company Warrants.  Parent
shall have received evidence satisfactory to Parent of the exercise or
cancellation of all of the Company Options and the Company Warrants.

 

(l)            Dissenting Stockholders.  Less than five percent (5%) of the shares of
Company Preferred Stock and less than thirty percent (30%) of the shares of
Company Common Stock, that are issued and outstanding immediately prior to the
Effective Time, shall be held by Dissenting Stockholders.

 

(m)          Stockholders’ Questionnaires.  Parent shall have received from Company
Preferred Stockholders holding at least ninety-five percent (95%) of the
Company Preferred Stock a stockholders’ questionnaire in the form of Exhibit D
attached hereto indicating that as of the Effective Time such holder is an
Accredited Investor.

 

(n)           Non-USRPHC Certificate.  Company Stockholders shall furnish to Parent
on or before the Closing Date a certificate stating that the Company is not a “United
States real property holding corporation” within the meaning of Section 897(c)(2) of
the Code.

 

(o)           Business Partner Consent.  The Company shall furnish to Parent on or
before the Closing Date a letter, in form and substance reasonably satisfactory
to Parent, from each entity listed by Parent in Section 6.3(o) of the
Parent Disclosure Letter indicating that such entity either (1) does not
have such a right as a result of the transaction contemplated hereby or has
irrevocably waived its right to so terminate such business relationship, or (2) providing
such entity’s consent to the Merger.

 

(p)           Additional Documents.  The Company shall have delivered such other
documents as Parent shall have reasonably requested.

 

ARTICLE 7

TERMINATION AND ABANDONMENT

 

7.1           Termination.  Except as provided in Section 7.2 below,
this Agreement may be terminated and the Merger abandoned at any time prior to
the Effective Time:

 

(a)           by mutual consent of the Company and
Parent;

 

(b)           by Parent or the Company if: (i) the
Closing has not occurred before 5:00 p.m. (Central time) on November 30,
2005 (the “End Date”); provided, that the right to terminate this
Agreement under this Section 7.1(b)(i) shall not be available to the
party whose failure to fulfill any obligation hereunder has been the cause of,
or resulted in, the initial failure of the Closing to occur on or before such
date; and provided, further, that in the event that a party has given
written notice to the other party pursuant to Section 7.1(c) or (d) of
an inaccuracy in the other party’s representations or warranties or breach by
the other party of any representation, warranty, covenant or agreement set
forth in this Agreement, which inaccuracy or breach is curable as provided in Section 7.1(c) or
(d), then the End Date shall be deemed extended for so long as the other party
continues to exercise its commercially reasonable efforts to cure such
inaccuracy or breach, but in any event no longer than December 15, 2005; (ii) there

 

56

 

shall be a final nonappealable
Law promulgated or issued by a Governmental Entity court in effect preventing
consummation of the Merger; or (iii) there shall be any Law enacted,
promulgated or issued or deemed applicable to the Merger by any Governmental
Entity that would make consummation of the Merger illegal;

 

(c)           by Parent, upon a material breach of
any representation, warranty, covenant or agreement on the part of the Company
set forth in this Agreement, or if any material representation or warranty of
the Company shall have become untrue in any material respect, provided,
that Parent shall provide written notice to the Company of such inaccuracy in
the Company’s representations and warranties or breach by the Company and if
such inaccuracy or breach is curable by the Company within fifteen (15) days
through the exercise of its commercially reasonable efforts, then for so long
as the Company continues to exercise such efforts, Parent may not terminate
this Agreement under this Section 7.1(c) unless such breach is not
cured within fifteen (15) days (it being understood that Parent may not
terminate this Agreement pursuant to this Section 7.1(c) if it or Sub
shall have at such time independently materially breached this Agreement); and

 

(d)           by the Company, upon a material
breach of any representation, warranty, covenant or agreement on the part of
Parent or Sub set forth in this Agreement, or if any material representation or
warranty of Parent or Sub shall have become untrue in any material respect, provided,
that the Company shall provide written notice to Parent of such inaccuracy in
Parent’s or Sub’s representations and warranties or breach by Parent or Sub and
if such inaccuracy or breach is curable by Parent or Sub, respectively, within
fifteen (15) days through the exercise of its commercially reasonable efforts,
then for so long as Parent or Sub continues to exercise such efforts, the
Company may not terminate this agreement under this Section 7.1(d) unless
such breach is not cured within fifteen (15) days (it being understood that the
Company may not terminate this Agreement pursuant to this Section 7.1(d) if
it shall have at such time independently materially breached this Agreement);
and

 

(e)           by the Company or Parent by written
notice to the other, if the Company accepts a Superior Acquisition Proposal.

 

7.2           Effect
of Termination.  In the event of
termination of this Agreement by either Parent or the Company as provided
above, the provisions of this Agreement shall immediately become void and of no
further force and effect (other than this Section 7.2 which shall survive
the termination of this Agreement), and, except as provided in this Section 7.2,
there shall be no liability on the part of Parent, Sub or the Company, or any
of their respective directors, officers, employees or stockholders, to one
another.

 

57

 

ARTICLE 8

THE REPRESENTATIVE

 

8.1           Representative of the
Company Preferred Stockholders and COC Recipients; Power of Attorney.

 

(a)           The Company hereby appoints the
Representative as agent and attorney-in-fact for the Company and each Company
Preferred Stockholder and COC Recipient, for and on behalf of such Stockholders
and COC Recipients, to give and receive notices and communications, to
authorize delivery to Parent of shares from the Escrow Fund in satisfaction of
claims by Parent, to object to such deliveries, to agree to, negotiate, enter
into settlements and compromises of, and demand arbitration and comply with
orders of courts and awards of arbitrators with respect to such claims, and to
take all actions necessary or appropriate in the judgment of the Representative
for the accomplishment of the foregoing, and (i) the approval and adoption
of this Agreement by the Company Preferred Stockholders shall constitute the
Company Preferred Stockholders’ ratification of such appointment, and (ii) the
execution by each COC Recipient of a COC Acceptance Form shall constitute
the COC Recipient’s ratification of such appointment.  The Representative shall furnish on behalf of
the Company Preferred Stockholders and COC Recipients such certificates and
other documents as may from time to time be requested by the Escrow Agent.  The Representative may be changed by the
Company Preferred Stockholders and COC Recipients, by vote or consent of an
aggregate of a majority in interest of the Escrow Fund from time to time upon
not less than thirty (30) days’ prior written notice to Parent.  Any vacancy in the position of Representative
may be filled by approval of the Company Preferred Stockholders and COC
Recipients holding a majority in interest of the Escrow Fund.  No bond shall be required of the
Representative, and the Representative shall not receive compensation for its
services.  Notices or communications to
or from the Representative shall constitute notice to or from each of the
Company Preferred Stockholders and COC Recipients.

 

(b)           The Representative shall not be
liable for any act done or omitted hereunder as Representative while acting in
good faith and in the exercise of reasonable judgment.  The Company Preferred Stockholders and COC
Recipients having an interest in the Escrow Fund shall severally indemnify the
Representative and hold the Representative harmless against any loss, liability
or expense incurred without gross negligence, bad faith or intentional
misconduct on the part of the Representative and arising out of or in
connection with the acceptance or administration of the Representative’s duties
hereunder, including the reasonable fees and expenses of any legal counsel
retained by the Representative.

 

(c)           In order to induce the Representative
to act in such capacity, the Representative:

 

(i)            shall not be under any duty to give
greater consideration to the interest of any Company Preferred Stockholder(s)
or COC Recipient(s) than to that of any other such Person(s);

 

58

 

(ii)           may act in reliance upon any
statement (oral or written), instrument or signature believed by the
Representative to be genuine and may assume that any such statement, instrument
or signature purportedly given by any Company Preferred Stockholder or COC
Recipient in connection with this Agreement has been given by such Company
Preferred Stockholder or COC Recipient;

 

(iii)          shall not be liable to the Company
Preferred Stockholders or COC Recipients for any mistake of fact or error in
judgment or for any acts of omission of any kind unless by the Representative’s
own gross negligence, bad faith or willful misconduct;

 

(iv)          shall not be required to make any
representation as to the validity, value or genuineness of any document or
instrument held by the Representative or delivered by the Representative;

 

(v)           shall not be obligated to risk its
own funds in the course of performing as Representative; and

 

(vi)          shall not have any duties or
responsibilities except those expressly set forth in this Agreement or any
Transaction Document to which the Representative is a party and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or shall otherwise exist against the
Representative.

 

8.2           Actions of the Representative.  A decision, act, consent or instruction of
the Representative, including, but not limited to, an amendment, extension or
waiver of this Agreement, shall constitute a decision of all the Company
Preferred Stockholders and COC Recipients, as the case may be, and shall be
final, binding and conclusive upon each of such Company Preferred Stockholders
and COC Recipients, and the Escrow Agent and Parent may rely upon any such
decision, act, consent or instruction of the Representative as being the
decision, act, consent or instruction of each and every such Company Preferred
Stockholder and COC Recipient.  The
Escrow Agent and Parent are hereby relieved from any liability to any person
for any acts done by them in accordance with such decision, act, consent or
instruction of the Representative.

 

ARTICLE 9

INDEMNIFICATION

 

9.1           Survival.  The representations and warranties of the
Parties contained in this Agreement (including without limitation obligations
with respect to indemnification under this Article 9), the other
Transaction Documents and in any certificate delivered pursuant hereto or
thereto, shall survive the Closing until the date that is twelve (12) months
after the Closing Date; provided, that if an Indemnified Party delivers,
within such survival period, a Claim Notice, then such representation and
warranty shall survive with respect to the Claim specified in the Claim Notice
through the date such Claim is conclusively resolved.

 

59

 

9.2           Indemnification

 

(a)           By the Company, the Company
Preferred Stockholders and the COC Recipients.  Subject to Section 9.6, (i) prior
to the Effective Time, the Company, and (ii) on and after the Effective
Time, (X) each COC Recipient, severally and pro rata based upon each Recipient’s
proportionate share of the aggregate COC Incentive Payments received by it, and
(Y) each Company Preferred Stockholder, severally and pro rata based upon each
Company Preferred Stockholder’s proportionate share of the aggregate Merger
Consideration received by it, shall indemnify, defend and hold harmless Parent,
Sub and the Surviving Corporation, and their respective directors, officers and
other employees, agents, advisors, successors and assigns (“Parent
Indemnitees”) from and against any and all liabilities, obligations,
losses, damages, deficiencies, demands, claims, fines, penalties, interest,
assessments, judgments, actions, proceedings and suits of whatever kind and
nature and all costs and expenses relating thereto (including without
limitation reasonable attorneys’ fees incurred in connection with the
investigation, defense and/or prosecution thereof) (“Losses”) to the
extent such Losses arise out of the circumstances described in clauses (i) through
(ix) below; provided, however, that in the case of
indemnification pursuant to clause (ii) below, the indemnification
obligation shall be borne solely by the breaching Company Preferred
Stockholder, and in the case of fraud, the indemnification obligation shall be
borne solely by the defrauding Company Preferred Stockholder; and further
provided, however, that in the case of indemnification pursuant
to clause (iii) below, the indemnification obligation shall be borne
solely by the breaching COC Recipient, and in the case of fraud, the
indemnification obligation shall be borne solely by the defrauding COC
Recipient; and further  provided, however, that in the case
of indemnification pursuant to clause (ix) below, if any liability of
Parent or Surviving Corporation results in a benefit to a Company Preferred
Stockholder or COC Recipient or a group of Company Preferred Stockholders or
COC Recipients, but not to all of the Company Preferred Stockholders or COC
Recipients, the indemnification obligation shall be borne solely by the Company
Preferred Stockholder(s) or COC Recipient(s) receiving such benefit:

 

(i)            any material breach of any
representation or warranty made by the Company herein or in any certificate
delivered pursuant to this Agreement;

 

(ii)           any material breach of any
representation or warranty made by a Company Preferred Stockholder in a letter
of transmittal delivered by such Company Preferred Stockholder in accordance
with Section 2.4(b)(i) or a stockholders’ questionnaire delivered by
such Company Preferred Stockholder in accordance with Section 6.3(n) or
any other document delivered by a Company Preferred Stockholder pursuant to this
Agreement or in connection with the transactions contemplated hereby;

 

(iii)          any material breach of any
representation or warranty made by a COC Recipient in a document delivered by
such COC Recipient pursuant to this Agreement or in connection with the transactions
contemplated hereby;

 

(iv)          any failure of the Company to perform
or comply with any of the Company’s obligations under any Transaction Document;

 

60

 

(v)           to the extent the payment is made by
the Company (but not including any loss of the deduction), any
“excess parachute payment,” as such term is defined in Section 280G of the
Code, determined without regard to any payments resulting from plans, programs,
or arrangements entered into between any officer, director, stockholder or
employee of the Company and Parent, Sub or, after the Effective Time, the
Surviving Corporation;

 

(vi)          any claims by (x) any holder of any
capital stock of the Company, or any option or warrant to purchase any capital
stock of the Company or (y) any current or former employee of the Company, with
respect to the sufficiency and/or allocation of the Merger Consideration or the
COC Incentive Payments, including any claims by Dissenting Stockholders;

 

(vii)         any claim for severance or unpaid
compensation by a Terminated Company Employee, other than (A) compensation
accrued on the Most Recent Balance Sheet, (B) any commission earned under
the Company’s North American and EMEA sales commissions plans, or (C) any
Disclosed Severance Obligation; provided, however, that to the
extent Parent determines to reduce the Company’s workforce in the United
Kingdom or France, Parent is fully responsible for any obligations or
liabilities in excess of those set forth on Section 3.15(a) of the
Company Disclosure Letter, and understands and agrees that it cannot make
claims against the Escrow Fund for any such amounts, unless such amounts arise
from actions (x) taken by the Company prior to the Closing and (y) not
specifically authorized by the Parent;

 

(viii)        to the extent in excess of the Company
Transaction Expenses paid at Closing, any Company Transaction Expenses paid by
the Surviving Corporation after the Effective Time; and

 

(ix)           any liability of Parent or the
Surviving Corporation under Section 2.8(b).

 

(b)           By Parent.  Subject to Section 9.6, Parent and Sub,
jointly and severally, shall indemnify, defend and hold harmless the Company
and its respective current and (following the Effective Time) former
stockholders (including the Company Preferred Stockholders), directors,
officers and other employees (including, without limitation, the COC
Recipients), agents, advisors, successors and assigns (the “Company
Indemnitees”) from and against any and all Losses to the extent such Losses
are based upon, arise out of or relate to:

 

(i)            any breach of any representation or
warranty made by Parent or Sub herein or in any certificate delivered pursuant
to this Agreement; and

 

(ii)           any failure by either Parent or Sub
to perform or comply with any of its obligations under any Transaction
Document.

 

9.3           Indemnification Procedure.  Within a reasonable period of time after the
incurrence of any Losses by any Person entitled to indemnification pursuant to Section 9.2
(an “Indemnified Party”), including any legal proceeding or any claim by
a third-party described in Section 9.5 which might give rise to
indemnification hereunder, such Indemnified Party (and in the case of any
Company Preferred Stockholder or COC Recipient, the Representative) shall
provide notice in writing (“Claim Notice”) of such claim (a “Claim”)
to the party from which indemnification is sought (the “Indemnifying Party”)
and, in the case of a claim made by a

 

61

 

Parent Indemnitee, to the
Escrow Agent; provided, that in the case of any Company Preferred
Stockholder or COC Recipient as the Indemnifying Party, the Claim Notice shall
be provided to the Representative; provided, further, that after the
Escrow Fund is exhausted or no longer available to satisfy Claims pursuant to
the indemnification provided for in Section 9.2(a), as limited by Section 9.6,
any Parent Indemnitee shall provide the Claim Notice solely to the
Representative.  The Claim Notice shall
set forth in reasonable detail the nature of the Claim for which
indemnification is sought, the factual basis of such Claim and a good faith
estimate of the dollar value of the Losses for which indemnification is
sought.  No such estimate shall have any
effect on the extent to which the Indemnifying Parties shall have an obligation
to indemnify an Indemnified Party.  All
Claims made against and paid out of the Escrow Fund to the Parent Indemnitees
shall be made and paid in accordance herewith and with the terms of the Escrow
Agreement.

 

(b)           In the event that the Indemnifying
Party shall object to the indemnification of an Indemnified Party in respect of
any claim or claims specified in any Claim Notice, the Indemnifying Party
shall, within forty-five (45) days after receipt by the Indemnifying Party of
such Claim Notice, deliver to the Indemnified Party a notice to such effect (an
“Objection Notice”), and the Indemnifying Party and the Indemnified
Party shall, within the thirty (30) day period beginning on the date of receipt
by the Indemnified Party of such Objection Notice, attempt in good faith to
agree upon the rights of the respective parties with respect to each of such
Claims to which the Indemnifying Party shall have so objected.  If the Indemnified Party and the Indemnifying
Party shall succeed in reaching agreement on their respective rights with
respect to any of such Claims, the Indemnified Party, and the Indemnifying
Party shall promptly prepare and sign a memorandum setting forth such
agreement.  Should the Indemnified Party
and the Indemnifying Party be unable to agree as to any particular item or
items or amount or amounts, then the Indemnified Party and the Indemnifying
Party shall submit such dispute to a court of competent jurisdiction.  The party which receives a final,
non-appealable judgment in such dispute shall be indemnified and held harmless
for all reasonable attorney and consultant’s fees or expenses by the other
party.

 

(c)           Claims for Losses specified in any
Claim Notice to which an Indemnifying Party shall not object in writing within
forty-five (45) days of receipt of such Claim Notice, Claims covered by a
memorandum of agreement of the nature described in Section 9.3(b), Claims
the validity and amount of which have been the subject of judicial
determination as described in Section 9.3(b), are hereinafter referred to,
collectively, as “Resolved Claims”. 
While the Escrow Fund remains available to satisfy Claims pursuant to
the indemnification provided for in Section 9.2(a), as limited by Section 9.6,
promptly after a claim becoming a Resolved Claim, Parent and the Representative
shall prepare and deliver to the Escrow Agent joint written instructions
stating the Claim has become a Resolved Claim and the amount of the Loss
related thereto.

 

9.4           Payment
of Claims.  Whenever a Claim becomes
a Resolved Claim in favor of any Company Indemnitees or, whenever an Excess
Claim becomes a Resolved Claim in favor of any Parent Indemnitees, then within
ten (10) days of the determination of the amount of any such Resolved
Claims, the Indemnifying Party shall, subject to Section 9.6, pay to the
Indemnified Party an amount equal to the Resolved Claim by wire transfer in
immediately available funds to the bank account or accounts designated by the
Indemnified Party in a notice to the Indemnifying

 

62

 

Party not less than two (2) business
days prior to such payment; provided, however, in the case of any
payment relating to an Excess Claim, such payment shall be reduced by the
amount, if any, that was satisfied out of the Escrow Fund.  In the event the Indemnified Party is Parent,
Parent shall satisfy the Resolved Claim proportionately from the Stock Escrow
Fund and the Cash Escrow Fund in accordance with the terms of the Escrow
Agreement.

 

9.5           Third-Party
Claims.  If a claim by a third-party
is made against any Indemnified Party, and if such Indemnified Party intends to
seek indemnity with respect thereto under Section 9.2, such Indemnified
Party shall promptly provide a Claim Notice to the Indemnifying Party of such
claims; provided, that the failure to so notify shall not relieve the
Indemnifying Party of its obligations hereunder, except to the extent that the
Indemnifying Party is actually and materially prejudiced thereby.  The Indemnifying Party shall have thirty (30)
days after receipt of such notice to assume the conduct and control, through
counsel reasonably acceptable to the Indemnified Party at the expense of the
Indemnifying Party, of the settlement or defense thereof and the Indemnified
Party shall cooperate with it in connection therewith; provided, that (a) the
Indemnifying Party shall permit the Indemnified Party to participate in such
settlement or defense through counsel chosen by such Indemnified Party, provided,
that the fees and expenses of such counsel shall be borne by such Indemnified
Party and (b) the Indemnifying Party shall promptly be entitled to assume
the defense of such action only to the extent the Indemnifying Party
acknowledges its indemnity obligation and assumes and holds such Indemnified
Party harmless from and against the full amount of any Loss resulting
therefrom.  So long as the Indemnifying
Party is reasonably contesting any such claim in good faith, the Indemnified
Party shall not pay or settle any such claim without the prior written consent
of the Indemnifying Party. 
Notwithstanding the foregoing, the Indemnified Party shall have the
right to pay or settle any such claim, provided, that in such event it
shall waive any right to indemnity therefor by the Indemnifying Party for such
claim unless the Indemnifying Party shall have consented to such payment or
settlement.  If the Indemnifying Party
does not notify the Indemnified Party within thirty (30) days after the receipt
of the Indemnified Party’s notice of a claim of indemnity hereunder that it
elects to undertake the defense thereof, the Indemnified Party shall have the
right to contest, settle or compromise the claim and shall not thereby waive
any right to indemnity therefor pursuant to this Agreement; provided, however,
that the Indemnified Party shall reasonably contest such claim with the good
faith intent to minimize, to the extent reasonably possible, the ultimate
liability, cost and expense to the Indemnifying Party and/or against the Escrow
Fund.  The Indemnifying Party shall not,
except with the consent of the Indemnified Party, enter into any settlement
that is not entirely indemnifiable by the Indemnifying Party pursuant to this Article 9
and does not include as an unconditional term thereof the giving by the Person
or Persons asserting such claim to all Indemnified Parties of an unconditional
release from all liability with respect to such claim or consent to entry of
any judgment.  The Indemnifying Party and
the Indemnified Party shall cooperate with each other in all reasonable
respects in connection with the defense of any claim, including making
available records relating to such claim and furnishing, without expense to the
Indemnifying Party and/or its counsel, such employees of the Indemnified Party
as may be reasonably necessary for the preparation of the defense of any such
claim or for testimony as witnesses in any proceeding relating to such claim.

 

63

 

9.6           Limitations of Liability.

 

(a)           Deductible and Limits on Liability

 

(i)            No amount shall be payable by an
Indemnifying Party (or if such Indemnifying Party is the Company Preferred
Stockholders or COC Recipient, all of the Company Preferred Stockholders and
COC Recipients collectively) to an Indemnified Party (which shall include the
Parent Indemnitees in the case of Section 9.7) with respect to any claims
for indemnification pursuant to Sections 2.8, 9.2(a) or 9.7 unless
and until the aggregate amount of such claims required to be indemnified by the
Indemnifying Party pursuant hereto exceeds one hundred thousand dollars
($100,000), in which case the Indemnifying Party shall be liable to the
Indemnified Party for only the amount of all indemnified claims in excess of
$100,000, subject to the other provisions of this Section 9.6; provided,
however, that any indemnification claim arising under Section 2.8
or clause (vi) of Section 9.2(a) shall neither be limited by
such deductible or be included in the claims aggregated to determine the
satisfaction thereof.

 

(ii)           (A) Except for
Excess Claims, recourse to the Escrow Fund shall provide the sole and exclusive
remedy for Claims for Losses under Sections 9.2(a) and 9.7.

 

(B) Claims
arising out of or relating to (1) a breach by the Company of its
representations and warranties in Section 3.3, (2) a breach by any
Company Preferred Stockholder in a letter of transmittal delivered by such
Company Preferred Stockholder in accordance with Section 2.4(b)(i) with
respect to such Company Preferred Stockholder’s ownership of any Company Stock
(“Ownership Representations”), (3) fraud, or (4) claims
arising under clause (vi) of Section 9.2(a) (“9.2(a)(vi) Claims”,
and together with claims under clauses (1), (2) and (3) of this Section 9.6(a)(ii)(B),
“Excess Claims”) shall not be limited to the Escrow Fund and the
aggregate liability of the Company and the Company Preferred Stockholders and
COC Recipients to the Parent Indemnitees for any Excess Claim shall not exceed
the Total Transaction Consideration; provided, however, notwithstanding
the foregoing, that any Company Preferred Stockholder’s (or COC Recipient’s)
individual liability with respect to any specific Loss shall not exceed such
Company Preferred Stockholder’s (or COC Recipient’s) pro rata share (determined
by comparing the aggregate consideration received by such Company Preferred
Stockholder (or COC Recipient) to the Total Transaction Consideration) of such
Loss unless the Loss relates to a breach of the Ownership Representation by
such Company Preferred Stockholder, in which case such Company Preferred
Stockholder’s individual liability shall be limited to the Merger Consideration
received by such Company Preferred Stockholder; provided, further,
that the Company Preferred Stockholders’ and COC Recipients’ liability for any
9.2(a)(vi) Claims shall be limited to $300,000 in excess of the amounts
available from the Escrow Fund and only after such 9.2(a)(vi) Claims (x)
exceed both $250,000 in the aggregate and (y) otherwise exceed all amounts
available from the Escrow Fund; provided, further, that nothing
in the foregoing proviso shall limit any 9.2(a)(vi) Claim that can be
satisfied from the Escrow Fund.

 

(C) Except in
the case of fraud, Claims arising out of or relating to a breach by Parent of
its representations and warranties shall be limited to the Total Transaction
Consideration, and the aggregate liability of the Parent and the Surviving
Corporation to the Company Preferred Stockholders and COC Recipients shall not
exceed the Total Transaction Consideration.

 

64

 

(b)           Duty to Mitigate Losses.  Nothing herein shall be deemed to relieve any
Indemnified Party hereto from any duty to mitigate any Losses under applicable
law.

 

(c)           No Double Recovery.  No Indemnified Party shall be entitled to be
indemnified more than once under this Agreement for the same claim.

 

(d)           Net Damages.  Notwithstanding anything contained herein to
the contrary, the amount of any Losses incurred or suffered by an Indemnified
Party under Section 9.2 shall be calculated after giving effect to any
proceeds, benefits or recoveries obtained by the Indemnified Party (or any of
its Affiliates) from any other third-party, including any proceeds from
insurance policies covering the event or claim giving rise to the
indemnification obligation (but net of any increase in insurance premiums as a
result of the event or claim giving rise to the indemnification obligation ).

 

9.7           Indemnification for Taxes.

 

(a)           Notwithstanding any provision to the
contrary contained in this Agreement, and without duplicating any obligation
under any other provision of this Article 9, until the expiration of the
applicable statute of limitations and subject to the limitation set forth in Section 9.6,
the Company Preferred Stockholders and COC Recipients agree to indemnify,
defend and hold harmless the Parent Indemnitees on an after-tax basis against (i) all
Taxes, losses, claims and expenses resulting from, arising out of, or incurred
with respect to, any claims that may be asserted by any party based upon,
attributable to, or resulting from the failure of any representation or
warranty made pursuant to Section 3.12 (Taxes) of this Agreement to be
true and correct as of the Closing Date; (ii) all Taxes imposed on or
asserted against the properties, income or operations of the Company or its
Subsidiaries, or for which the Company or any of its Subsidiaries may otherwise
be liable, for all Pre-Closing Periods to the extent such Taxes are not
reflected in the Closing Date Working Capital, are not attributable to
compensation payable by reason of the actions described in Section 5.11,
are not attributable to any amendment to any Return filed, or other change
made, by Parent or the Surviving Corporation following the Closing Date, or are
not taken into account in determining the Adjustment Amount; (iii) all
Taxes of any member of an affiliated, consolidated, combined or unitary group (“Group”)
of which Company or any of its Subsidiaries (or any predecessor of any of the
foregoing) is or was a member on or prior to the Closing Date imposed on the
Company or any of its Subsidiaries as a result of the provisions of Treasury
Regulations Section 1.1502-6 or the analogous provisions of any state,
local or foreign law.

 

(b)           In the case of any taxable period
that includes but does not end on the Closing Date (a “Straddle Period”),
the amount of any Taxes based on or measured by income or receipts of the
Company and its Subsidiaries for the Pre-Closing Period shall be determined
based on an interim closing of the books as of the close of business on the
Closing Date and the amount of other Taxes of the Company and its Subsidiaries
that relate to the Pre-Closing Period shall be deemed to be the amount of such
Tax for the entire taxable period multiplied by a fraction the numerator of
which is the number of days in the taxable period ending on the Closing Date
and the denominator of which is the number of days in such Straddle Period.

 

65

 

(c)           Parent shall prepare or cause to be
prepared and file or cause to be filed all Returns for the Company and its
Subsidiaries that are filed after the Closing Date.  Any such Returns that include periods
beginning prior to the Closing Date shall be prepared, to the extent permitted
by applicable law, on the same basis as the last previous such Returns or on as
near to the same basis as possible, unless there is no reasonable basis for
such position.  Parent shall permit
Representative (or an advisor appointed by Representative) to review and
comment on each such Return prior to filing and shall make such revisions to
such Returns as are reasonably requested by Representative.

 

9.8           Exclusive Remedy.  Following the Closing, the rights of any
Indemnified Party under Article 9,
including the rights of the Parent Indemnitees under Section 9.7, shall be
the exclusive remedy of such Indemnified Party with respect to claims based
upon a breach or alleged breach of the representations, warranties and
covenants of another Party contained in this Agreement, any other Transaction
Document, any exhibit or schedule hereto or thereto or any certificate or
writing delivered in connection therewith or in any other manner relating to
the transactions contemplated hereby or thereby, regardless of the cause of
action, except in the case of fraud, in which case, the foregoing limitation
shall not apply.

 

9.9           Characterization of
Indemnity Payments.  Any indemnity
payments made pursuant to this Article 9 shall be treated as an adjustment
to the Merger Consideration to the maximum extent possible.

 

ARTICLE 10

 

MISCELLANEOUS

 

10.1         Fees
and Expenses.  Each Party will bear
its respective fees and expenses incurred with respect to this Agreement.

 

10.2         Representations and Warranties.  Parent acknowledges that except as set forth
in this Agreement or in the other Transaction Documents and in any certificates
or other documents expressly required to be delivered at or prior to Closing by
this Agreement, the Company is not making any other representations and warranties
and such representations and warranties are the only representations and
warranties on which Parent has in making its investment hereunder.

 

10.3         Extension;
Waiver.  At any time prior to the
Effective Time, the Parties, by action taken by or on behalf of the Boards of
Directors of the Company, Parent or Sub, may (i) extend the time for the
performance of any of the obligations or other acts of the other Parties, (ii) waive
any inaccuracies in the representations and warranties contained herein by any
other applicable party or in any document, certificate or writing delivered
pursuant hereto by any other applicable party or (iii) waive compliance
with any of the agreements or conditions contained herein.  Any agreement on the part of any party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.

 

10.4         Notices.  All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed

 

66

 

to have been duly given if
delivered in person or mailed, certified or registered mail with postage
prepaid, or sent by facsimile (upon confirmation of receipt), as follows:

 

(a)           if to the Company prior to the
Closing, to it at:

 

Requisite Technology, Inc.

10155 Westmoor Drive, Suite 225

Westminster, Colorado 
80021

Attention: 
Susan L. Oakes, Chief Legal Officer

Fax:  303-474-8191

 

If to the
Representative before or after the Closing, to him at:

 

Thomas G. Washing

Sequel Venture
Partners

4430 Arapahoe
Avenue, Suite 220

Boulder, CO  80303

Fax:  (303) 546-9728

 

in each case with
a copy (which shall not constitute notice) to:

 

Holme Roberts &
Owen LLP

1700 Lincoln Street

Suite 4100

Denver, CO  80203-4541

Attention: Richard
R. Plumridge

Fax: (303) 866-0200

 

(b)           if to either Parent or Sub, to it at:

 

Click Commerce, Inc.

233 North Michigan Avenue

Chicago, IL  60601

Attention: General Counsel

Fax: (312) 482-8557

 

with a copy (which
shall not constitute notice) to:

 

McDermott Will & Emery LLP

227 West Monroe Street

Chicago, IL 60606

Attention: Mark A. Harris

Fax: (312) 984-3669

 

or to such other Person or address as any Party shall specify by notice
in writing to each of the other parties. 
All such notices, requests, demands, waivers and communications shall be
deemed to have been received on the date of delivery unless if mailed, in which
case on the third (3rd)

 

67

 

Business Day after the mailing thereof, except for a notice of a change
of address, which shall be effective only upon receipt thereof.

 

10.5         Entire
Agreement.  This Agreement and the
other Transaction Documents contain the entire understanding of the Parties
with respect to the subject matter contained herein and supersede all prior
agreements and understandings, oral and written, with respect thereto, other
than the Confidentiality Agreement.

 

10.6         Binding Effect; Benefit;
Assignment.  This Agreement shall
inure to the benefit of and be binding upon the Parties and, with respect to
the provisions of Article 9, shall inure to the benefit of the Persons or
entities benefiting from the provisions thereof who are intended to be
third-party beneficiaries thereof and with respect to the provisions of
Sections 2.4(e) and 2.5 and Article 8 and Article 9, shall be
binding upon the Company Preferred Stockholders to the extent provided
therein.  Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the Parties without the prior written consent of each of the other Parties,
except that Sub may assign and transfer its right and obligations hereunder to
any of its Affiliates.  Except as
provided in the first sentence of this Section 10.6, nothing in this
Agreement, expressed or implied, is intended to confer on any Person (including
any current or former employees of the Company), other than the Parties, any
rights or remedies.

 

10.7         Amendment
and Modification.  Subject to applicable
law, this Agreement may be amended, modified and supplemented in writing by the
Parties in any and all respects before the Effective Time (notwithstanding any
stockholder approval), by action authorized by the respective Boards of
Directors of Parent, Sub and the Company or, in the case of Parent or Sub, by
the respective officers authorized by their respective Board of Directors; provided,
however, that after any such stockholder approval, no amendment shall be
made which by law requires further approval by such stockholders without such
further approval.

 

10.8         Further
Actions.  Each of the Parties agrees
that, subject to its legal obligations, it shall use its commercially
reasonable efforts to fulfill all conditions precedent specified herein, to the
extent that such conditions are within its control, and to do all things
reasonably necessary to consummate the transactions contemplated hereby.

 

10.9         Headings.  The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only, do
not constitute a part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.

 

10.10       Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.

 

10.11       Facsimile
Signatures.  Any signature page delivered
pursuant to this Agreement or any other document related hereto via facsimile
shall be binding to the same extent as an original signature.  Any Party who delivers such a signature page agrees
to later deliver an original counterpart to any Party that requests it.

 

68

 

10.12       Applicable
Law; Waiver of Jury Trial.

 

(a)           This Agreement shall be deemed to be
made in and in all respects shall be interpreted, construed and governed by and
in accordance with the law of the State of Delaware without regard to conflict
of law principles.

 

(b)           EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.  EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH
SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.12(b).

 

10.13       Severability.  In the event that any provision of this
Agreement, or the application of such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those as
to which it is determined to be invalid, unlawful, void or unenforceable, shall
not be affected and shall continue to be valid and enforceable to the fullest
extent permitted by law.

 

10.14       Interpretation.  When a reference is made in this Agreement to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated.  The table of
contents and headings contained in this Agreement are for convenience of
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. 
Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.”

 

*   *  
*   *   *

 

69

 

IN WITNESS WHEREOF, each of Parent, Sub, the Company
and the Representative have caused this Agreement to be executed by their
respective officers thereunto duly authorized, all as of the date first above
written.

 

	
   

  	
  REQUISITE
  TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Larry Lenhart

  	
   

  
	
   

  	
   

  	
  Name: Larry Lenhart

  
	
   

  	
   

  	
  Title: President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  REQUISITE ACQUISITION INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John M. Tuhey

  	
   

  
	
   

  	
   

  	
  Name: John. M. Tuhey

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CLICK COMMERCE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Michale W. Ferro, Jr.

  	
   

  
	
   

  	
   

  	
  Name: Michael W. Ferro, Jr.

  
	
   

  	
   

  	
  Title: Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  REPRESENTATIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Thomas G. Washing

  	
   

  
	
   

  	
   

  	
  Name: Thomas G. Washing

  

 

70

 

Schedule 2.14

 

Calculation of Working Capital Target Amount

 

The Working Capital Target Amount has been
prepared in conformity with the accounting principles, policies and practices
used in preparation of the FY04 Audited Financial Statements and the Stub
Unaudited Financial Statements, and consists of the following estimated Company
assets and includes deductions for the following estimated Company liabilities
at the Effective Time:

 

a)             Cash
and cash equivalents;

 

b)            Restricted
cash;

 

c)             Accounts
receivable, net of any allowances for doubtful accounts;

 

d)            Other
current assets;

 

less deductions for:

 

e)             Accounts
payable;

 

f)             Accrued
liabilities;

 

g)            Current
portion of deferred revenues; and

 

h)            Liabilities
related to this transaction, including but not limited to Company Transaction
Expenses, all expenses incurred prior to the Effective Time in connection with
the preparation work to be done with respect to obtaining auditors’ consents,
all Disclosed Severance Obligations for Terminated Company Employees, and all
expenses related to a three year tail for the Company’s D&O Insurance to be
purchased by the Company.

 

Company assets that are excluded from the
calculation of the Working Capital Target Amount (and shall be excluded from
the calculation of the Closing Date Working Capital) are property, plant and
equipment and other non-current assets not identified above.  Company liabilities excluded from the
calculation of the Working Capital Target Amount (and shall be excluded from
the calculation of the Closing Date Working Capital) are the non-current
portion of deferred revenues.

 

If there is a conflict between the Company’s
accounting principles and GAAP, then GAAP shall prevail, provided, however,
that the preparation of the Working Capital Target Amount and the Closing Date
Working Capital reflect the principles specified in this Schedule 2.14,
regardless of whether such principles conflict with the Company’s accounting
principles or GAAP.

 

For the avoidance of doubt and based on the
foregoing, the Working Capital Target Amount is $6,630,000, the calculation of
which is set forth in the table below. 
Further, the COC

 

71

 

Incentive Payments have been
excluded from the calculation of the Working Capital Target Amount, and shall
be excluded from the calculation of Closing Date Working Capital.

 

72Exhibit 4.1

 

 

 

INDENTURE

Dated as of November 22, 2005

Among

ACCELLENT INC.,

THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO

and

THE BANK OF NEW YORK,

as Trustee

101⁄2% SENIOR SUBORDINATED NOTES DUE 2013

 

 

 

 

CROSS-REFERENCE TABLE*

 

	
  Trust Indenture Act Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  14.03

  
	
  (c)

  	
   

  	
  14.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  7.06;7.07

  
	
  (c)

  	
   

  	
  7.06;14.02

  
	
  (d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.03;14.02; 14.05

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  14.04

  
	
  (c)(2)

  	
   

  	
  14.04

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  14.05

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01

  
	
  (b)

  	
   

  	
  7.05;14.02

  
	
  (c)

  	
   

  	
  7.01

  
	
  (d)

  	
   

  	
  7.01

  
	
  (e)

  	
   

  	
  6.14

  
	
  316(a)(last sentence)

  	
   

  	
  2.09

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.07

  
	
  (c)

  	
   

  	
  2.12;9.04

  
	
  317(a)(1)

  	
   

  	
  6.08

  
	
  (a)(2)

  	
   

  	
  6.12

  
	
  (b)

  	
   

  	
  2.04

  
	
  318(a)

  	
   

  	
  14.01

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  14.01

  

 

N.A.
means not applicable.

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

 

 

TABLE OF CONTENTS

 

	
   

  	
  ARTICLE 1

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEFINITIONS AND
  INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
   

  
	
  Section 1.02

  	
  Other
  Definitions

  	
   

  
	
  Section 1.03

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
   

  
	
  Section 1.04

  	
  Rules of
  Construction.

  	
   

  
	
  Section 1.05

  	
  Acts of
  Holders

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 2

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Form and
  Dating; Terms

  	
   

  
	
  Section 2.02

  	
  Execution
  and Authentication

  	
   

  
	
  Section 2.03

  	
  Registrar
  and Paying Agent

  	
   

  
	
  Section 2.04

  	
  Paying
  Agent to Hold Money in Trust

  	
   

  
	
  Section 2.05

  	
  Holder
  Lists

  	
   

  
	
  Section 2.06

  	
  Transfer
  and Exchange

  	
   

  
	
  Section 2.07

  	
  Replacement
  Notes

  	
   

  
	
  Section 2.08

  	
  Outstanding
  Notes

  	
   

  
	
  Section 2.09

  	
  Treasury
  Notes

  	
   

  
	
  Section 2.10

  	
  Temporary
  Notes

  	
   

  
	
  Section 2.11

  	
  Cancellation

  	
   

  
	
  Section 2.12

  	
  Defaulted
  Interest

  	
   

  
	
  Section 2.13

  	
  CUSIP
  Numbers

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 3

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Notices
  to Trustee

  	
   

  
	
  Section 3.02

  	
  Selection
  of Notes to Be Redeemed or Purchased

  	
   

  
	
  Section 3.03

  	
  Notice
  of Redemption

  	
   

  
	
  Section 3.04

  	
  Effect
  of Notice of Redemption

  	
   

  
	
  Section 3.05

  	
  Deposit
  of Redemption or Purchase Price

  	
   

  
	
  Section 3.06

  	
  Notes
  Redeemed or Purchased in Part

  	
   

  
	
  Section 3.07

  	
  Optional
  Redemption

  	
   

  
	
  Section 3.08

  	
  Mandatory
  Redemption

  	
   

  
	
  Section 3.09

  	
  Offers
  to Repurchase by Application of Excess Proceeds

  	
   

  

 

i

 

	
   

  	
  ARTICLE 4

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Payment
  of Notes

  	
   

  
	
  Section 4.02

  	
  Maintenance
  of Office or Agency

  	
   

  
	
  Section 4.03

  	
  Reports
  and Other Information

  	
   

  
	
  Section 4.04

  	
  Compliance
  Certificate

  	
   

  
	
  Section 4.05

  	
  Taxes

  	
   

  
	
  Section 4.06

  	
  Stay,
  Extension and Usury Laws

  	
   

  
	
  Section 4.07

  	
  Limitation
  on Restricted Payments

  	
   

  
	
  Section 4.08

  	
  Dividend
  and Other Payment Restrictions Affecting Restricted Subsidiaries

  	
   

  
	
  Section 4.09

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

  	
   

  
	
  Section 4.10

  	
  Asset Sales

  	
   

  
	
  Section 4.11

  	
  Transactions
  with Affiliates

  	
   

  
	
  Section 4.12

  	
  Liens

  	
   

  
	
  Section 4.13

  	
  Corporate
  Existence

  	
   

  
	
  Section 4.14

  	
  Offer
  to Repurchase Upon Change of Control

  	
   

  
	
  Section 4.15

  	
  Limitation
  on Guarantees of Indebtedness by Restricted Subsidiaries

  	
   

  
	
  Section 4.16

  	
  Limitation
  on Layering

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 5

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Merger,
  Consolidation or Sale of All or Substantially All Assets

  	
   

  
	
  Section 5.02

  	
  Successor
  Corporation Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 6

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEFAULTS AND
  REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Events
  of Default

  	
   

  
	
  Section 6.02

  	
  Acceleration

  	
   

  
	
  Section 6.03

  	
  Other
  Remedies

  	
   

  
	
  Section 6.04

  	
  Waiver
  of Past Defaults

  	
   

  
	
  Section 6.05

  	
  Control
  by Majority

  	
   

  
	
  Section 6.06

  	
  Limitation
  on Suits

  	
   

  
	
  Section 6.07

  	
  Rights
  of Holders of Notes to Receive Payment

  	
   

  
	
  Section 6.08

  	
  Collection
  Suit by Trustee

  	
   

  
	
  Section 6.09

  	
  Restoration
  of Rights and Remedies

  	
   

  
	
  Section 6.10

  	
  Rights
  and Remedies Cumulative

  	
   

  
	
  Section 6.11

  	
  Delay
  or Omission Not Waiver

  	
   

  
	
  Section 6.12

  	
  Trustee
  May File Proofs of Claim

  	
   

  
	
  Section 6.13

  	
  Priorities

  	
   

  
	
  Section 6.14

  	
  Undertaking
  for Costs

  	
   

  

 

ii

 

	
   

  	
  ARTICLE 7

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Duties
  of Trustee

  	
   

  
	
  Section 7.02

  	
  Rights
  of Trustee

  	
   

  
	
  Section 7.03

  	
  Individual
  Rights of Trustee

  	
   

  
	
  Section 7.04

  	
  Trustee’s
  Disclaimer

  	
   

  
	
  Section 7.05

  	
  Notice
  of Defaults

  	
   

  
	
  Section 7.06

  	
  Reports
  by Trustee to Holders of the Notes

  	
   

  
	
  Section 7.07

  	
  Compensation
  and Indemnity

  	
   

  
	
  Section 7.08

  	
  Replacement
  of Trustee

  	
   

  
	
  Section 7.09

  	
  Successor
  Trustee by Merger, etc

  	
   

  
	
  Section 7.10

  	
  Eligibility;
  Disqualification

  	
   

  
	
  Section 7.11

  	
  Preferential
  Collection of Claims Against Issuer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 8

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LEGAL
  DEFEASANCE AND COVENANT DEFEASANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Option
  to Effect Legal Defeasance or Covenant Defeasance

  	
   

  
	
  Section 8.02

  	
  Legal
  Defeasance and Discharge

  	
   

  
	
  Section 8.03

  	
  Covenant
  Defeasance

  	
   

  
	
  Section 8.04

  	
  Conditions
  to Legal or Covenant Defeasance

  	
   

  
	
  Section 8.05

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

  	
   

  
	
  Section 8.06

  	
  Repayment
  to Issuer

  	
   

  
	
  Section 8.07

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 9

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMENDMENT,
  SUPPLEMENT AND WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Without
  Consent of Holders of Notes

  	
   

  
	
  Section 9.02

  	
  With
  Consent of Holders of Notes

  	
   

  
	
  Section 9.03

  	
  Compliance
  with Trust Indenture Act

  	
   

  
	
  Section 9.04

  	
  Revocation
  and Effect of Consents

  	
   

  
	
  Section 9.05

  	
  Notation
  on or Exchange of Notes

  	
   

  
	
  Section 9.06

  	
  Trustee
  to Sign Amendments, etc

  	
   

  
	
  Section 9.07

  	
  Payment
  for Consent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 10

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBORDINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Agreement
  To Subordinate

  	
   

  
	
  Section 10.02

  	
  Liquidation,
  Dissolution, Bankruptcy

  	
   

  
	
  Section 10.03

  	
  Default
  on Senior Indebtedness of the Issuer

  	
   

  

 

iii

 

	
  Section 10.04

  	
  Acceleration
  of Payment of Notes

  	
   

  
	
  Section 10.05

  	
  When
  Distribution Must Be Paid Over

  	
   

  
	
  Section 10.06

  	
  Subrogation

  	
   

  
	
  Section 10.07

  	
  Relative
  Rights

  	
   

  
	
  Section 10.08

  	
  Subordination
  May Not Be Impaired by Issuer

  	
   

  
	
  Section 10.09

  	
  Rights
  of Trustee and Paying Agent

  	
   

  
	
  Section 10.10

  	
  Distribution
  or Notice to Representative

  	
   

  
	
  Section 10.11

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

  	
   

  
	
  Section 10.12

  	
  Trust
  Moneys Not Subordinated

  	
   

  
	
  Section 10.13

  	
  Trustee
  Entitled To Rely

  	
   

  
	
  Section 10.14

  	
  Trustee
  To Effectuate Subordination

  	
   

  
	
  Section 10.15

  	
  Trustee
  Not Fiduciary for Holders of Senior Indebtedness of the Issuer

  	
   

  
	
  Section 10.16

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

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 11

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTEES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01

  	
  Guarantee

  	
   

  
	
  Section 11.02

  	
  Limitation
  on Guarantor Liability

  	
   

  
	
  Section 11.03

  	
  Execution
  and Delivery

  	
   

  
	
  Section 11.04

  	
  Subrogation

  	
   

  
	
  Section 11.05

  	
  Benefits
  Acknowledged

  	
   

  
	
  Section 11.06

  	
  Release
  of Guarantees

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 12

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBORDINATION
  OF GUARANTEES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.01

  	
  Agreement
  To Subordinate

  	
   

  
	
  Section 12.02

  	
  Liquidation,
  Dissolution, Bankruptcy

  	
   

  
	
  Section 12.03

  	
  Default
  on Senior Indebtedness of a Guarantor

  	
   

  
	
  Section 12.04

  	
  Demand
  for Payment

  	
   

  
	
  Section 12.05

  	
  When
  Distribution Must Be Paid Over

  	
   

  
	
  Section 12.06

  	
  Subrogation

  	
   

  
	
  Section 12.07

  	
  Relative
  Rights

  	
   

  
	
  Section 12.08

  	
  Subordination
  May Not Be Impaired by a Guarantor

  	
   

  
	
  Section 12.09

  	
  Rights
  of Trustee and Paying Agent

  	
   

  
	
  Section 12.10

  	
  Distribution
  or Notice to Representative

  	
   

  
	
  Section 12.11

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

  	
   

  
	
  Section 12.12

  	
  Trust
  Moneys Not Subordinated

  	
   

  
	
  Section 12.13

  	
  Trustee
  Entitled To Rely

  	
   

  
	
  Section 12.14

  	
  Trustee
  To Effectuate Subordination

  	
   

  
	
  Section 12.15

  	
  Trustee
  Not Fiduciary for Holders of Senior Indebtedness of Guarantors

  	
   

  
	
  Section 12.16

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

  	
   

  

 

iv

 

	
   

  	
  ARTICLE 13

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SATISFACTION
  AND DISCHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.01

  	
  Satisfaction
  and Discharge

  	
   

  
	
  Section 13.02

  	
  Application
  of Trust Money

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE 14

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 14.01

  	
  Trust
  Indenture Act Controls

  	
   

  
	
  Section 14.02

  	
  Notices

  	
   

  
	
  Section 14.03

  	
  Communication
  by Holders of Notes with Other Holders of Notes

  	
   

  
	
  Section 14.04

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
   

  
	
  Section 14.05

  	
  Statements
  Required in Certificate or Opinion

  	
   

  
	
  Section 14.06

  	
  Rules by
  Trustee and Agents

  	
   

  
	
  Section 14.07

  	
  No
  Personal Liability of Directors, Officers, Employees and Stockholders

  	
   

  
	
  Section 14.08

  	
  Governing
  Law

  	
   

  
	
  Section 14.09

  	
  Waiver
  of Jury Trial

  	
   

  
	
  Section 14.10

  	
  Force
  Majeure

  	
   

  
	
  Section 14.11

  	
  No
  Adverse Interpretation of Other Agreements

  	
   

  
	
  Section 14.12

  	
  Successors

  	
   

  
	
  Section 14.13

  	
  Severability

  	
   

  
	
  Section 14.14

  	
  Counterpart
  Originals

  	
   

  
	
  Section 14.15

  	
  Table
  of Contents, Headings, etc

  	
   

  
	
  Section 14.16

  	
  Qualification
  of Indenture

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Note

  	
   

  
	
  Exhibit B

  	
  Form of Certificate
  of Transfer

  	
   

  
	
  Exhibit C

  	
  Form of Certificate
  of Exchange

  	
   

  
	
  Exhibit D

  	
  Form of Supplemental
  Indenture to Be Delivered by Subsequent Guarantors

  	
   

  

 

v

 

INDENTURE, dated as of November 22, 2005, among
Accellent Inc., a Maryland corporation (“Issuer”), the Guarantors (as
defined herein) listed on the signature pages hereto and The Bank of New
York, a New York banking corporation, as Trustee.

 

W I  T  N  E  S
S  E  T  H

 

WHEREAS, the Issuer has duly authorized the creation
of an issue of $305,000,000 aggregate principal amount of 101⁄2% Senior
Subordinated Notes due 2013 (the “Initial Notes”);

 

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

 

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

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01           Definitions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

“Agent” means any Registrar or Paying Agent.

 

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

 

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

 

(2)           the excess, if any, of (a) the present
value at such Redemption Date of (i) the redemption price of such Note at December 1,
2009 (each such redemption price being set forth in Section 3.07 hereof),
plus (ii) all required interest payments due on such Note through December 1,
2009 (excluding accrued but unpaid interest to the Redemption Date), computed
using a discount rate equal to the Treasury Rate as of such Redemption Date
plus 50 basis points; over (b) the principal amount of such Note.

 

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

 

“Applicable Senior Leverage Ratio” means (1) for
any date prior to December 1, 2007, 4.0 to 1.0, and (2) for any date
on or after December 1, 2007, 3.75 to 1.0.

 

“Asset Sale” means:

 

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

 

(2)           the issuance or sale of Equity Interests of
any Restricted Subsidiary, whether in a single transaction or a series of
related transactions;

 

in
each case, other than:

 

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

 

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

 

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

 

2

 

(d)           any disposition of assets or issuance or sale
of Equity Interests of any Restricted Subsidiary in any transaction or series
of transactions with an aggregate fair market value of less than
$10.0 million;

 

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

 

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

 

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

 

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

 

(i)            foreclosures on assets;

 

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

 

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

 

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

 

“beneficial ownership” 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 such 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, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition.

 

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

 

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

 

“Campbell Acquisition” means the acquisition
of Campbell Engineering, Inc. on September 12, 2005.

 

“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

 

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

 

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

 

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

 

“Cash Equivalents” means:

 

(1)           United States dollars;

 

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

 

(b)           in the case of any Foreign Subsidiary that is
a Restricted Subsidiary, such local currencies held by them from time to time
in the ordinary course of business;

 

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

 

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

 

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

 

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

 

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

 

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

 

(9)           readily marketable direct obligations issued
by any state, commonwealth or territory of the United States or any political
subdivision or taxing authority thereof having an Investment

 

4

 

Grade Rating from either Moody’s or S&P with
maturities of 24 months or less from the date of acquisition;

 

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

 

(11)         Investments with average maturities of 12
months or less from the date of acquisition in money market funds rated AAA-
(or the equivalent thereof) or better by S&P or Aaa3 (or the equivalent
thereof) or better by Moody’s.

 

Notwithstanding the foregoing, Cash Equivalents
shall include amounts denominated in currencies other than those set forth in
clauses (1) and (2) above, provided that such amounts are
converted into any currency listed in clauses (1) and (2) as
promptly as practicable and in any event within ten Business Days following the
receipt of such amounts.

 

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

 

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

 

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

 

“Clearstream” means Clearstream Banking,
Société Anonyme.

 

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

 

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

 

(1)           consolidated interest expense of such Person
and its Restricted Subsidiaries for such period, to the extent such expense was
deducted (and not added back) in computing Consolidated Net Income (including (a) amortization
of original issue discount resulting from the issuance of Indebtedness at less
than par, (b) all commissions, discounts and other fees and charges owed
with respect to letters of credit or bankers acceptances, (c) non-cash
interest payments (but excluding any non-cash interest expense attributable to
the movement in the mark to market

 

5

 

valuation of Hedging Obligations or other derivative
instruments pursuant to GAAP), (d) the interest component of Capitalized
Lease Obligations, and (e) net payments, if any, pursuant to interest rate
Hedging Obligations with respect to Indebtedness, and excluding (w) any
Additional Interest, (x) amortization of deferred financing fees, debt issuance
costs, commissions, fees and expenses, (y) any expensing of bridge, commitment
and other financing fees and (z) commissions, discounts, yield and other fees
and charges (including any interest expense) related to any Receivables
Facility); plus

 

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

 

(3)           interest income for such period.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(6)           solely for the purpose of determining the
amount available for Restricted Payments under clause (3)(a) of Section 4.07(a) hereof,
the Net Income for such period of any Restricted Subsidiary (other than any
Guarantor) shall be excluded if the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of its Net Income is not at
the date of determination wholly permitted without any prior governmental
approval (which has not been

 

6

 

obtained) or, directly or indirectly, by the
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule, or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, unless such restriction with respect
to the payment of dividends or similar distributions has been legally waived, provided
that Consolidated Net Income of the Issuer will be increased by the amount of
dividends or other distributions or other payments actually paid in cash (or to
the extent converted into cash) to the Issuer or a Restricted Subsidiary
thereof in respect of such period, to the extent not already included therein,

 

(7)           any impairment charge or asset write-off
pursuant to Financial Accounting Standards Board Statement Nos. 142 and No. 144
and the amortization of intangibles arising pursuant to No. 141 shall be
excluded,

 

(8)           effects of adjustments in any line item in
such Person’s consolidated financial statements required or permitted by the
Financial Accounting Standards Board Statement Nos. 141 and 142 resulting from
the application of purchase accounting in relation to the Transaction, the
Campbell Acquisition and the MTG Acquisition or any acquisition that is
consummated after the Issue Date, net of taxes, shall be excluded,

 

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

 

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

 

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

 

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

 

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

 

(2)           to advance or supply funds

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Designated Preferred Stock” means Preferred
Stock of the Issuer or any parent corporation thereof (in each case other than
Disqualified Stock) that is issued for cash (other than to a Restricted
Subsidiary or an employee stock ownership plan or trust established by the
Issuer or any of its Subsidiaries) and is so designated as Designated Preferred
Stock, pursuant to an Officer’s Certificate executed by the principal financial
officer of the Issuer or the applicable parent corporation thereof, as the case
may

 

8

 

be,
on the issuance date thereof, the cash proceeds of which are excluded from the
calculation set forth in clause (3) of Section 4.07(a) hereof.

 

“Designated Senior Indebtedness” means:

 

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

 

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

 

“Disqualified Stock” means, with respect to
any Person, any Capital Stock of such Person which, by its terms, or by the
terms of any security into which it is convertible or for which it is putable
or exchangeable, or upon the happening of any event, matures or is mandatorily
redeemable (other than solely as a result of a change of control or asset sale)
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof (other than solely as a result of a change of
control or asset sale), in whole or in part, in each case prior to the date 91
days after the earlier of the maturity date of the Notes or the date the Notes
are no longer outstanding; provided, however, that if such
Capital Stock is issued to any plan for the benefit of employees of the Issuer
or its Subsidiaries or by any such plan to such employees, such Capital Stock
shall not constitute Disqualified Stock solely because it may be required to be
repurchased by the Issuer or its Subsidiaries in order to satisfy applicable statutory
or regulatory obligations.

 

“Domestic Subsidiary” means, with respect to
any Person, any Restricted Subsidiary of such Person other than a Foreign
Subsidiary.

 

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

 

(1)           increased (without duplication) by:

 

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

 

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

 

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

 

(d)           any expenses or charges (other than
depreciation or amortization expense) related to any Equity Offering, Permitted
Investment, acquisition, disposition, recapitalization or the incurrence of
Indebtedness permitted to be incurred by this Indenture

 

9

 

(including a refinancing thereof) (whether or not
successful), including (i) such fees, expenses or charges related to the
offering of the Notes and the Credit Facilities and (ii) any amendment or
other modification of the Notes, and, in each case, deducted (and not added
back) in computing Consolidated Net Income; plus

 

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

 

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

 

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

 

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

 

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

 

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

 

(2)           decreased by (without duplication) non-cash
gains increasing Consolidated Net Income of such Person for such period,
excluding any non-cash gains to the extent they represent the reversal of an
accrual or reserve for a potential cash item that reduced EBITDA in any prior
period, and

 

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

 

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

 

10

 

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

 

(c)           without duplication, the Historical
Adjustments incurred in such period.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(1)           contributions to its common equity capital,
and

 

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

 

11

 

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

 

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

 

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

 

For purposes of this definition, whenever pro forma effect is to be given to a
transaction, the pro forma
calculations shall be made in good faith by the chief financial officer of the
Issuer.  If any Indebtedness bears a
floating rate of interest and is being given pro
forma effect, the interest on such Indebtedness shall be calculated
as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date
had been the applicable rate for the entire period (taking into account any Hedging
Obligations applicable to such Indebtedness). 
Interest on a Capitalized Lease Obligation shall be deemed to accrue at
an interest rate reasonably determined by a responsible financial or accounting
officer of the Issuer to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP. 
For purposes of making the computation referred to above, interest on
any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based
upon the average daily balance of such Indebtedness during the applicable
period except as set forth in the first paragraph of this definition.  Interest on Indebtedness that may optionally
be determined at an interest rate based upon a factor of a prime or similar rate,
a eurocurrency interbank offered rate, or other rate, shall be deemed to have
been based upon the rate actually chosen, or, if none, then based upon such
optional rate chosen as the Issuer may designate.

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Government Securities” means securities that
are:

 

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

 

(2)           obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America,

 

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

 

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

 

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

 

13

 

“Guarantor” means, each Restricted Subsidiary
that Guarantees the Notes in accordance with the terms of this Indenture.

 

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

 

“Historical Adjustments” means, with respect
to the Issuer and its Restricted Subsidiaries, without duplication, the
following items to the extent incurred prior to the Issue Date and disclosed in
the adjustments to “Adjusted EBITDA” in the Offering Circular:

 

(1)           restructuring costs associated with the
acquisition of MedSource;

 

(2)           non-cash charges for stock-based
compensation;

 

(3)           executive severance costs due to contractual
severance obligations;

 

(4)           executive relocation costs associated with
the creation of new divisional management offices;

 

(5)           write-off of the step-up of inventory
acquired from MedSource;

 

(6)           write-downs of receivables and inventory
acquired from MedSource and Campbell;

 

(7)           losses associated with closed facilities in
connection with the acquisition of MedSource;

 

(8)           gain on the sale of a manufacturing facility;

 

(9)           management fees paid to KRG Capital Partners,
LLC and DLJ Merchant Banking;

 

(10)         prepayment penalty relating to Accellent
Corp.’s 2004 debt refinancing; and

 

(11)         costs related to the Transaction.

 

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

 

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

 

(1)           any indebtedness (including principal and
premium) of such Person, whether or not contingent:

 

(a)           in respect of borrowed money;

 

14

 

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

 

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

 

(d)           representing any Hedging Obligations;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Initial Notes” as defined in the recitals
hereto.

 

“Initial Purchasers” means Credit Suisse
First Boston LLC, J.P. Morgan Securities Inc., and Bear, Stearns & Co.
Inc.

 

“Interest Payment Date” means June 1 and
December 1 of each year to stated maturity.

 

15

 

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

 

“Investment Grade Securities” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)           the Issuer “Investment” in such Subsidiary at
the time of such redesignation; less

 

(b)           the portion (proportionate to the Issuer
Equity Interest in such Subsidiary) of the fair market value of the net assets
of such Subsidiary at the time of such redesignation; and

 

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

 

16

 

“Investors” means Kohlberg Kravis Roberts &
Co. L.P. and Bain Capital and their respective Affiliates but not including,
however, any portfolio companies of any of the foregoing.

 

“Issue Date” means November 22, 2005.

 

“Issuer” means Accellent Inc.

 

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

 

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

 

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

 

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

 

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

 

“MTG Acquisition” means the acquisition of
Machining Technology Group, LLC on October 6, 2005.

 

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

 

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

 

17

 

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

 

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

 

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

 

“Offering Circular” means the offering
circular, dated November 17, 2005, relating to the sale of the Initial
Notes.

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

“Permitted
Investments” means:

 

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

 

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

 

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

 

(a)           such Person becomes a Restricted Subsidiary;
or

 

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

 

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

 

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

 

(5)           any Investment existing on the Issue Date,
including any earn-out obligation in respect of the Campbell Acquisition and
the MTG Acquisition (as in effect on the Issue Date);

 

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

 

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

 

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

 

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

 

(8)           any Investment in a Similar Business having
an aggregate fair market value, taken together with all other Investments made
pursuant to this clause (8) that are at that time outstanding, not to
exceed the greater of (x) $20.0 million and (y) 1.5% of Total Assets at the
time of such Investment (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value);

 

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

 

19

 

(10)         guarantees of Indebtedness permitted under Section 4.09
hereof;

 

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

 

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

 

(13)         additional Investments having an aggregate
fair market value, taken together with all other Investments made pursuant to
this clause (13) that are at that time outstanding (without giving effect to
the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale
do not consist of cash or marketable securities), not to exceed the greater of
(x) $20.0 million and (y) 1.5% of Total Assets at the time of such Investment
(with the fair market value of each Investment being measured at the time made
and without giving effect to subsequent changes in value);

 

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

 

(15)         advances to, or guarantees of Indebtedness
of, employees not in excess of $10.0 million outstanding at any one time,
in the aggregate; and

 

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

 

“Permitted
Junior Securities” means:

 

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

 

(2)           unsecured debt securities that are
subordinated to all Senior Indebtedness (and any debt securities issued in
exchange for Senior Indebtedness) to substantially the same extent as, or to a
greater extent than, the Notes and the related Guarantees are subordinated to
Senior Indebtedness under this Indenture;

 

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

 

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

 

(1)           pledges or deposits by such Person under
workmen’s compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids, tenders, contracts
(other than for the payment of Indebtedness) or leases to which such Person is
a

 

20

 

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

 

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

 

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

 

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

 

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

 

(6)           Liens securing Indebtedness permitted to be
incurred pursuant to clause (4), (12)(b), (18) or (19) of Section 4.09(b) hereof;
provided that Liens securing Indebtedness permitted to be incurred
pursuant to clause (18) extend only to the assets of Foreign Subsidiaries and
Liens securing Indebtedness permitted to be incurred pursuant to clause (19)
are solely on acquired property or the assets of the acquired entity, as the
case may be;

 

(7)           Liens existing on the Issue Date;

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(18)         Liens to secure any refinancing, refunding,
extension, renewal or replacement (or successive refinancing, refunding,
extensions, renewals or replacements) as a whole, or in part, of any
Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7),
(8) and (9); provided, however, that (a) such new Lien
shall be limited to all or part of the same property that secured the original
Lien (plus improvements on such property), and (b) the Indebtedness
secured by such Lien at such time is not increased to any amount greater than
the sum of (i) the outstanding principal amount or, if greater, committed
amount of the Indebtedness described under clauses (6), (7), (8) and (9) at
the time the original Lien became a Permitted Lien under this Indenture, and (ii) an
amount necessary to pay any fees and expenses, including premiums, related to
such refinancing, refunding, extension, renewal or replacement;

 

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

 

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

 

(21)         Liens securing judgments for the payment of
money not constituting an Event of Default under clause (5) under Section 6.01
hereof so long as such Liens are adequately bonded and any appropriate legal
proceedings that may have been duly initiated for the review of such

 

22

 

judgment
have not been finally terminated or the period within which such proceedings
may be initiated has not expired;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Public
Equity Offering” means any public sale of common stock or Preferred Stock
of the Issuer or any of its direct or indirect parent companies (excluding
Disqualified Stock), other than:

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Record
Date” for the interest or Additional Interest, if any, payable on any
applicable Interest Payment Date means May 15 or November 15 (whether
or not a Business Day) next preceding such Interest Payment Date.

 

“Registration
Rights Agreement” means the Exchange and Registration Rights Agreement with
respect to the Notes dated as of the Issue Date, among the Issuer, the
Guarantors and the Initial Purchasers, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Issuer 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 Issuer to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

“Sale
and Lease-Back Transaction” means any arrangement providing for the leasing
by the Issuer or any of its Restricted Subsidiaries of any real or tangible
personal property, which property has been or is to be sold or transferred by
the Issuer or such Restricted Subsidiary to a third Person in contemplation of
such leasing.

 

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

 

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

 

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

 

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

 

“Senior
Indebtedness” means:

 

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

 

(2)           all Hedging Obligations (and guarantees
thereof) owing to a Lender (as defined in the Senior Credit Facilities) or any
Affiliate of such Lender (or any Person that was a Lender or an Affiliate of
such Lender at the time the applicable agreement giving rise to such Hedging

 

26

 

Obligation
was entered into), provided that such Hedging Obligations are permitted
to be incurred under the terms of this Indenture;

 

(3)           any other Indebtedness of the Issuer 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 Senior
Subordinated Notes or any related Guarantee; and

 

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

 

provided, however, that Senior Indebtedness
shall not include:

 

(a)           any obligation of such Person to the Issuer
or any of its Subsidiaries;

 

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

 

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

 

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

 

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

 

“Senior
Leverage Ratio” means, with respect to the Issuer as of any date of
determination (the “Determination Date”), the ratio of (a) the sum of (1) the
aggregate amount of Senior Indebtedness of the Issuer and the Guarantors on the
Determination Date, plus (2) the aggregate amount of Indebtedness,
Disqualified Stock and Preferred Stock of all Restricted Subsidiaries of the
Issuer that are not Guarantors on the Determination Date, to (b) EBITDA of
the Issuer and its Restricted Subsidiaries on a consolidated basis for the most
recently ended four fiscal quarters for which internal financial statements are
available immediately preceding the Determination Date.

 

For
purposes of making the computation referred to above, Investments,
acquisitions, dispositions, mergers, consolidations and disposed operations (as
determined in accordance with GAAP) that have been made by the Issuer or any of
its Restricted Subsidiaries during the four-quarter reference period or
subsequent to such reference period and on or prior to the Determination Date
shall be calculated on a pro forma
basis assuming that all such Investments, acquisitions, dispositions, mergers,
consolidations and disposed operations (and the change in any associated fixed
charge obligations and the change in EBITDA resulting therefrom) had occurred
on the first day of the four-quarter reference period. If since the beginning
of such period any Person that subsequently became a Restricted Subsidiary or
was merged with or into the Issuer or any of its Restricted Subsidiaries since
the beginning of such period shall have made

 

27

 

any
Investment, acquisition, disposition, merger, consolidation or disposed
operation that would have required adjustment pursuant to this definition, then
the Senior Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such
Investment, acquisition, disposition, merger, consolidation or disposed
operation had occurred at the beginning of the applicable four-quarter period.

 

For
purposes of this definition, whenever pro forma
effect is to be given to a transaction, the pro forma
calculations shall be made in good faith by the chief financial officer of the
Issuer.

 

“Senior
Subordinated Indebtedness” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Subsidiary”
means, with respect to any Person:

 

(1)           any corporation, association, or other
business entity (other than a partnership, joint venture, limited liability
company or similar entity) of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time of determination owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person or a
combination thereof or is consolidated under GAAP with such Person at such
time; and

 

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

 

28

 

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

 

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

 

“Total
Assets” means the total assets of the Issuer and its Restricted
Subsidiaries on a consolidated basis, as shown on the most recent balance sheet
of the Issuer or such other Person as may be expressly stated.

 

“Transaction”
means the transactions contemplated by the Transaction Agreement, the issuance
of the Notes and borrowings under the Senior Credit Facilities as in effect on
the Issue Date.

 

“Transaction
Agreement” means the Agreement and Plan of Merger, dated as of October 7,
2005 between Accellent Inc. and Accellent Acquisition Corp. as the same may be
amended prior to the Issue Date.

 

“Treasury
Rate” means, as of any Redemption Date, the yield to maturity as of such
Redemption Date of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15 (519) that has become publicly available at least two Business
Days prior to the Redemption Date (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the period from the Redemption Date to December 1, 2009; provided,
however, that if the period from the Redemption Date to December 1,
2009 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year will be
used.

 

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

 

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

 

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

 

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

 

“Unrestricted
Subsidiary” means:

 

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

 

29

 

(2)           any Subsidiary of an Unrestricted Subsidiary.

 

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

 

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

 

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

 

(3)           each of:

 

(a)           the Subsidiary to be so designated; and

 

(b)           its Subsidiaries

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

(2)           the sum of all such payments.

 

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

 

Section 1.02           Other Definitions.

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  “Acceptable
  Commitment”

  	
   

  	
  4.10

  
	
  “Affiliate
  Transaction”

  	
   

  	
  4.11

  
	
  “Asset
  Sale Offer”

  	
   

  	
  4.10

  
	
  “Authentication
  Order”

  	
   

  	
  2.02

  
	
  “Blockage
  Notice”

  	
   

  	
  10.03

  
	
  “Change
  of Control Offer”

  	
   

  	
  4.14

  
	
  “Change
  of Control Payment”

  	
   

  	
  4.14

  
	
  “Change
  of Control Payment Date”

  	
   

  	
  4.14

  
	
  “Covenant
  Defeasance”

  	
   

  	
  8.03

  
	
  “DTC”

  	
   

  	
  2.03

  
	
  “Event
  of Default”

  	
   

  	
  6.01

  
	
  “Excess
  Proceeds”

  	
   

  	
  4.10

  
	
  “Guarantee
  Blockage Notice”

  	
   

  	
  12.03

  
	
  “Guarantee
  Payment Blockage Period”

  	
   

  	
  12.03

  
	
  “Guarantor
  Payment Default”

  	
   

  	
  12.03

  
	
  “incur”

  	
   

  	
  4.09

  
	
  “Legal
  Defeasance”

  	
   

  	
  8.02

  
	
  “Non-Guarantor
  Payment Default”

  	
   

  	
  12.03

  
	
  “Non-Payment
  Default”

  	
   

  	
  10.03

  
	
  “Note
  Register”

  	
   

  	
  2.03

  
	
  “Offer
  Amount”

  	
   

  	
  3.09

  
	
  “Offer
  Period”

  	
   

  	
  3.09

  
	
  “Pari
  Passu Indebtedness”

  	
   

  	
  4.10

  
	
  “pay
  its Guarantee”

  	
   

  	
  12.03

  
	
  “pay
  the Notes”

  	
   

  	
  10.03

  
	
  “Paying
  Agent”

  	
   

  	
  2.03

  
	
  “Payment
  Blockage Period”

  	
   

  	
  10.03

  
	
  “Payment
  Default”

  	
   

  	
  10.03

  
	
  “Purchase
  Date”

  	
   

  	
  3.09

  
	
  “Redemption
  Date”

  	
   

  	
  3.07

  

 

31

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
   

  	
   

  	
   

  
	
  “Refinancing
  Indebtedness”

  	
   

  	
  4.09

  
	
  “Refunding
  Capital Stock”

  	
   

  	
  4.07

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Restricted
  Payments”

  	
   

  	
  4.07

  
	
  “Second
  Commitment”

  	
   

  	
  4.10

  
	
  “Successor
  Company”

  	
   

  	
  5.01

  
	
  “Successor
  Person”

  	
   

  	
  5.01

  
	
  “Treasury
  Capital Stock”

  	
   

  	
  4.07

  

 

Section 1.03           Incorporation by Reference of Trust Indenture
Act.

 

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

 

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

 

“indenture
securities” means the Notes;

 

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

 

“indenture
to be qualified” means this Indenture;

 

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

 

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

 

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

 

Section 1.04           Rules of Construction.

 

Unless
the context otherwise requires:

 

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

 

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

 

(c)           “or” is not exclusive;

 

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

 

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

 

32

 

(f)            provisions apply to successive events and
transactions;

 

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

 

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

 

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

 

Section 1.05           Acts of Holders.

 

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

 

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

 

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

 

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

 

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

 

33

 

days
prior to the first solicitation of such consent or the date of the most recent
list of Holders furnished to the Trustee prior to such solicitation.

 

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

 

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

 

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

 

ARTICLE 2

THE NOTES

 

Section 2.01           Form and Dating; Terms.

 

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

 

(b)           Global Notes. 
Notes issued in global form shall be substantially in the form of Exhibit A
attached hereto (including the Global Note Legend thereon and the “Schedule of
Exchanges of Interests in the Global Note” attached thereto).  Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without
the Global Note Legend thereon and without the “Schedule of Exchanges of
Interests in the Global Note” attached thereto).  Each Global Note shall represent such of the
outstanding Notes as shall be specified in the “Schedule of Exchanges of
Interests in the Global Note” attached thereto and each shall provide that it
shall represent up to the aggregate principal amount of Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
applicable, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect
the amount of any

 

34

 

increase
or decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.

 

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

 

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

 

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

 

Following
the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in the Regulation S Permanent Global Note pursuant to the Applicable
Procedures.  Simultaneously with the
authentication of the Regulation S Permanent Global Note, the Trustee shall
cancel the Regulation S Temporary Global Note. 
The aggregate principal amount of the Regulation S Temporary Global Note
and the Regulation S Permanent Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.

 

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

 

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

 

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

 

Additional
Notes ranking pari  passu with the Initial Notes may be
created and issued from time to time by the Issuer without notice to or consent
of the Holders and shall be consolidated with and form a single class with the
Initial Notes and shall have the same terms as to status, redemption or
otherwise as the Initial Notes; provided that the Issuer’s ability to
issue Additional Notes shall be subject

 

35

 

to
the Issuer’s compliance with Section 4.09 hereof.  Any Additional Notes shall be issued with the
benefit of an indenture supplemental to this Indenture.

 

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

 

Section 2.02           Execution and Authentication.

 

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

 

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

 

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

 

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

 

The
Trustee may appoint an authenticating agent acceptable to the Issuer 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 Issuer.

 

Section 2.03           Registrar and Paying Agent.

 

The
Issuer shall maintain an office or agency where Notes may be presented for
registration of transfer or for exchange (“Registrar”) and an office or
agency where Notes may be presented for payment (“Paying Agent”).  The Registrar shall keep a register of the
Notes (“Note Register”) and of their transfer and exchange.  The Issuer 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 Issuer may change any Paying
Agent or Registrar without prior notice to any Holder.  The Issuer shall notify the Trustee in
writing of the name and address of any Agent not a party to this
Indenture.  If the Issuer fails to appoint
or maintain another entity as Registrar or Paying Agent, the Trustee shall act
as such.  The Issuer or any of its
Subsidiaries may act as Paying Agent or Registrar.

 

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

 

36

 

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

 

Section 2.04           Paying Agent to Hold Money in Trust.

 

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

 

Section 2.05           Holder Lists.

 

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

 

Section 2.06           Transfer and Exchange.

 

(a)           Transfer and Exchange of Global Notes. 
Except as otherwise set forth in this Section 2.06, a Global Note
may be transferred, in whole and not in part, only to another nominee of the
Depositary or to a successor Depositary or a nominee of such successor
Depositary.  A beneficial interest in a
Global Note may not be exchanged for a Definitive Note unless (i) the
Depositary (x) notifies the Issuer that it is unwilling or unable to continue
as Depositary for such Global Note or (y) has ceased to be a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary
is not appointed by the Issuer within 120 days, (ii) subject to the
procedures of the Depositary, the Issuer, at its option, notifies the Trustee
in writing that it elects to cause the issuance of the Definitive Notes, or (iii) there
shall have occurred and be continuing an Event of Default with respect to the
Notes.  Upon the occurrence of any of the
preceding events in (i), (ii) or (iii) above, Definitive Notes delivered
in exchange for any Global Note or beneficial interests therein will be
registered in the names, and issued in any approved denominations, requested by
or on behalf of the Depositary (in accordance with its customary procedures).  Global Notes also may be exchanged or
replaced, in whole or in part, as provided in Sections 2.07 and 2.10
hereof.  Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall
be authenticated and delivered in the form of, and shall be, a Global Note,
except for Definitive Notes issued subsequent to any of the preceding events in
(i) or (ii) above and pursuant to Section 2.06(c) hereof.  A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a); provided,
however, beneficial interests in a Global Note may be transferred and
exchanged as provided in Section 2.06(b), (c) or (f) hereof.

 

37

 

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

 

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

 

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

 

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

 

38

 

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

 

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

 

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

 

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

 

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

 

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

 

(D)          the Registrar receives the following:

 

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

 

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

 

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

 

39

 

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 Issuer shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

the
Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Issuer shall execute and the Trustee shall authenticate and mail to the
Person designated in the instructions a Definitive Note in the applicable
principal amount.  Any Definitive Note
issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c) shall be registered in such name or
names and in such authorized denomination or denominations as the holder of
such beneficial interest shall instruct the Registrar through instructions from
the Depositary and the Participant or Indirect Participant.  The Trustee shall mail such Definitive

 

40

 

Notes
to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall
bear the Private Placement Legend and shall be subject to all restrictions on
transfer contained therein.

 

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

 

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

 

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

 

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

 

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

 

(D)          the Registrar receives the following:

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

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

 

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

 

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

 

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

 

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

 

(D)          the Registrar receives the following:

 

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

 

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

 

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

 

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

 

(iii)          Unrestricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes.  A Holder of an Unrestricted
Definitive Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time.  Upon receipt of
a request for

 

43

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

44

 

(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

 

(D)          the Registrar receives the following:

 

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

 

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

 

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

 

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

 

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

 

45

 

(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:

 

(i)            Private Placement Legend.

 

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

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT
WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL
OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT (IF AVAILABLE), (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO
REQUESTS), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.  AS USED HEREIN, THE TERMS “OFFSHORE
TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE MEANING GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.”

 

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

 

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

 

46

 

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

 

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

 

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

 

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

 

47

 

and
an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if
the beneficial interest is being exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

 

(i)            General Provisions Relating to Transfers and
Exchanges.

 

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

 

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

 

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

 

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

 

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

 

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

 

(viii)        At the option of the Holder, Notes may be
exchanged for other Notes of any authorized denomination or denominations of a
like aggregate principal amount upon surrender of the Notes to be exchanged at
such office or agency.  Whenever any
Global Notes or Definitive Notes are so surrendered for exchange, the Issuer
shall execute, and the Trustee shall authenticate and mail, the replacement

 

48

 

Global
Notes and Definitive Notes which the Holder making the exchange is entitled to
in accordance with the provisions of Section 2.02 hereof.

 

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

 

Section 2.07           Replacement Notes.

 

If any mutilated Note is surrendered to the Trustee,
the Registrar or the Issuer and the Trustee receives evidence to its
satisfaction of the ownership and destruction, loss or theft of any Note, the
Issuer 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
Issuer, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee,
any Agent and any authenticating agent from any loss that any of them may
suffer if a Note is replaced.  The Issuer
may charge for its expenses in replacing a Note.

 

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

 

Section 2.08           Outstanding Notes.

 

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

 

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

 

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

 

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

 

Section 2.09           Treasury Notes.

 

In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by the Issuer, or by any Affiliate of the Issuer, shall be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee knows are so owned shall be so disregarded.  Notes so owned which have been pledged in
good faith shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right to deliver any such direction,
waiver or consent with respect to the Notes and

 

49

 

that
the pledgee is not the Issuer or any obligor upon the Notes or any Affiliate of
the Issuer or of such other obligor.

 

Section 2.10           Temporary Notes.

 

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

 

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

 

Section 2.11           Cancellation.

 

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

 

Section 2.12           Defaulted Interest.

 

If the Issuer 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 hereof.  The Issuer shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment, and at the same time the Issuer shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such defaulted interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such defaulted interest as provided in this Section 2.12.  The Trustee shall fix or cause to be fixed
each such special record date and payment date; provided that no such
special record date shall be less than 10 days prior to the related payment
date for such defaulted interest.  The
Trustee shall promptly notify the Issuer of such special record date.  At least 15 days before the special record
date, the Issuer (or, upon the written request of the Issuer, the Trustee in
the name and at the expense of the Issuer) shall mail or cause to be mailed,
first-class postage prepaid, to each Holder a notice at his or her address as
it appears in the Note Register that states the special record date, the
related payment date and the amount of such interest to be paid.

 

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

 

50

 

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

 

Section 2.13           CUSIP Numbers

 

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

 

ARTICLE 3

REDEMPTION

 

Section 3.01           Notices to Trustee.

 

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

 

Section 3.02           Selection of Notes to Be Redeemed or Purchased.

 

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

 

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

 

51

 

Section 3.03           Notice of Redemption.

 

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

 

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

 

(a)           the redemption date;

 

(b)           the redemption price;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 3.04           Effect of Notice of Redemption.

 

Once notice of redemption is mailed in accordance
with Section 3.03 hereof, Notes called for redemption become irrevocably
due and payable on the redemption date at the redemption price (except

 

52

 

as
provided for in Section 3.07(b) hereof).  The notice, if mailed in a manner herein
provided, shall be conclusively presumed to have been given, whether or not the
Holder receives such notice.  In any
case, failure to give such notice by mail or any defect in the notice to the
Holder of any Note designated for redemption in whole or in part shall not
affect the validity of the proceedings for the redemption of any other
Note.  Subject to Section 3.05
hereof, on and after the redemption date, interest ceases to accrue on Notes or
portions of Notes called for redemption.

 

Section 3.05           Deposit of Redemption or Purchase Price.

 

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

 

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

 

Section 3.06           Notes Redeemed or Purchased in Part.

 

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

 

Section 3.07           Optional Redemption.

 

(a)           At any time prior to December 1, 2009,
the Issuer may redeem all or a part of the Notes, upon not less than 30 nor
more than 60 days’ prior notice mailed by first-class mail to the registered
address of each Holder of Notes, at a redemption price equal to 100% of the
principal amount of the Notes redeemed plus the Applicable Premium as of, and
accrued and unpaid interest and Additional Interest, if any, to the date of
redemption (the “Redemption Date”), subject to the rights of Holders of
Notes on the relevant Record Date to receive interest due on the relevant
Interest Payment Date.

 

(b)           Until December 1, 2008, the Issuer may,
at its option, redeem up to 35% of the aggregate principal amount of Notes
issued by it at a redemption price equal to 110.50% of the aggregate

 

53

 

principal
amount thereof, plus accrued and unpaid interest thereon and Additional
Interest, if any, to the applicable Redemption Date, subject to the right of
Holders of Notes of record on the relevant Record Date to receive interest due
on the relevant Interest Payment Date, with the net cash proceeds of one or
more Public Equity Offerings; provided that at least 65% of the sum of
the aggregate principal amount of Notes originally issued under this Indenture
and any Additional Notes that are Notes issued under this Indenture after the
Issue Date remains outstanding immediately after the occurrence of each such
redemption; provided  further that each such redemption occurs
within 90 days of the date of closing of each such Public Equity Offering.  Notice of any redemption upon any Public
Equity Offering may be given prior to the redemption thereof, and any such
redemption or notice may, at the Issuer’s discretion, be subject to one or more
conditions precedent, including, but not limited to, completion of the related
Public Equity Offering.

 

(c)           Except pursuant to clause (a) or (b) of
this Section 3.07, the Notes will not be redeemable at the Issuer’s option
prior to December 1, 2009.

 

(d)           On and after December 1, 2009, the Issuer
may redeem the Notes, in whole or in part, upon not less than 30 nor more than
60 days’ prior notice by first-class mail, postage prepaid, with a copy to the
Trustee, to each Holder of Notes at the address of such Holder appearing in the
security register, at the redemption prices (expressed as percentages of
principal amount of the Notes to be redeemed) set forth below, plus accrued and
unpaid interest thereon and Additional Interest, if any, to the applicable
Redemption Date, subject to the right of Holders of Notes of record on the
relevant Record Date to receive interest due on the relevant Interest Payment
Date, if redeemed during the twelve-month period beginning on December 1
of each of the years indicated below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  105.250

  	
  %

  
	
  2010

  	
   

  	
  102.625

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

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

 

Section 3.08           Mandatory Redemption.

 

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

 

Section 3.09           Offers to Repurchase by Application of Excess
Proceeds.

 

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

 

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

 

54

 

Sale
Offer.  Payment for any Notes so purchased
shall be made in the same manner as interest payments are made.

 

(c)           If the Purchase Date is on or after a Record
Date and on or before the related Interest Payment Date, any accrued and unpaid
interest and Additional Interest, if any, up to but excluding the Purchase
Date, shall be paid to the Person in whose name a Note is registered at the
close of business on such Record Date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

(e)           On or before the Purchase Date, the Issuer
shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof validly tendered pursuant to the
Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered and (2) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officer’s Certificate stating the aggregate
principal amount of Notes or portions thereof so tendered.

 

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

 

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

 

ARTICLE 4

COVENANTS

 

Section 4.01           Payment of Notes.

 

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

 

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

 

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

 

56

 

Section 4.02           Maintenance of Office or Agency.

 

The Issuer shall maintain in the Borough of
Manhattan in the City of New York an office or agency (which may be an office
of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served.  The Issuer
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 Issuer 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.

 

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

 

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

 

Section 4.03           Reports and Other Information.

 

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

 

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

 

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

 

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

 

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

 

in
each case, in a manner that complies in all material respects with the
requirements specified in such form; provided that the Issuer shall not
be so obligated to file such reports with the SEC if the SEC does not permit
such filing, in which event the Issuer shall make available such information to
prospective

 

57

 

purchasers
of Notes, in addition to providing such information to the Trustee and the
Holders of the Notes, in each case within 15 days after the time the Issuer
would be required to file such information with the SEC, if it were subject to
Sections 13 or 15(d) of the Exchange Act. 
In addition, to the extent not satisfied by the foregoing, the Issuer
shall furnish to Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act.

 

(b)           In the event that any direct or indirect
parent company of the Issuer becomes a guarantor of the Notes, the Issuer may
satisfy its obligations under this Section 4.03 with respect to financial
information relating to the Issuer by furnishing financial information relating
to such parent; provided that the same is accompanied by consolidating
information that explains in reasonable detail the differences between the
information relating to such parent, on the one hand, and the information
relating to the Issuer and its Restricted Subsidiaries on a standalone basis,
on the other hand.

 

(c)           Notwithstanding the foregoing, the
requirements of this Section 4.03 shall be deemed satisfied prior to the
commencement of the Exchange Offer or the effectiveness of the Shelf
Registration Statement by the filing with the SEC of the Exchange Offer
Registration Statement or Shelf Registration Statement, and any amendments
thereto, with such financial information that satisfies Regulation S-X of the
Securities Act.

 

Section 4.04           Compliance Certificate.

 

(a)           The Issuer and each Guarantor (to the extent
that such Guarantor is so required under the Trust Indenture Act) shall deliver
to the Trustee, within 90 days after the end of each fiscal year ending after
the Issue Date, a certificate from the principal executive officer, principal
financial officer or principal accounting officer stating that a review of the
activities of the Issuer and its Restricted Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officer with a
view to determining whether the Issuer has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to such
Officer signing such certificate, that to the best of his or her knowledge the
Issuer has kept, observed, performed and fulfilled each and every condition and
covenant contained in this Indenture and is not in default in the performance
or observance of any of the terms, provisions, covenants and conditions of this
Indenture (or, if a Default shall have occurred, describing all such Defaults
of which he or she may have knowledge and what action the Issuer is taking or
proposes to take with respect thereto).

 

(b)           When any Default has occurred and is
continuing under this Indenture, or if the Trustee or the holder of any other
evidence of Indebtedness of the Issuer or any Subsidiary gives any notice or
takes any other action with respect to a claimed Default, the Issuer shall
promptly (which shall be no more than five (5) Business Days) deliver to
the Trustee by registered or certified mail or by facsimile transmission an
Officer’s Certificate specifying such event and what action the Issuer proposes
to take with respect thereto.

 

Section 4.05           Taxes.

 

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

 

58

 

Section 4.06           Stay, Extension and Usury Laws.

 

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

 

Section 4.07           Limitation on Restricted Payments.

 

(a)           The Issuer shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly:

 

(I)            declare or pay any dividend or make any
payment or distribution on account of the Issuer’s, or any of its Restricted
Subsidiaries’ Equity Interests, including any dividend or distribution payable
in connection with any merger or consolidation other than:

 

(A)          dividends or distributions by the Issuer payable
solely in Equity Interests (other than Disqualified Stock) of the Issuer; or

 

(B)           dividends or distributions by a Restricted
Subsidiary so long as, in the case of any dividend or distribution payable on
or in respect of any class or series of securities issued by a Restricted
Subsidiary other than a Wholly-Owned Subsidiary, the Issuer or a Restricted
Subsidiary receives at least its pro rata
share of such dividend or distribution in accordance with its Equity Interests
in such class or series of securities;

 

(II)           purchase, redeem, defease or otherwise
acquire or retire for value any Equity Interests of the Issuer or any direct or
indirect parent of the Issuer, including in connection with any merger or
consolidation;

 

(III)         make any principal payment on, or redeem,
repurchase, defease or otherwise acquire or retire for value in each case,
prior to any scheduled repayment, sinking fund payment or maturity, any
Subordinated Indebtedness, other than:

 

(A)          Indebtedness permitted under clauses (7) and
(8) of Section 4.09(b) hereof; or

 

(B)           the purchase, repurchase or other acquisition
of Subordinated Indebtedness purchased in anticipation of satisfying a sinking
fund obligation, principal installment or final maturity, in each case due
within one year of the date of purchase, repurchase or acquisition; or

 

(IV)         make any Restricted Investment

 

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

 

59

 

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

 

(2)           immediately after giving effect to such
transaction on a pro forma basis,
the Issuer could incur $1.00 of additional Indebtedness under Section 4.09(a) hereof;
and

 

(3)           such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Issuer and its
Restricted Subsidiaries after the Issue Date (including Restricted Payments
permitted by clauses (1), (2) (with respect to the payment of dividends on
Refunding Capital Stock pursuant to clause (b) thereof only), (4), (6)(c),
(9) and (14) of Section 4.07(b) hereof, but excluding all other
Restricted Payments permitted by Section 4.07(b) hereof), is less
than the sum of (without duplication):

 

(a)           50% of the Consolidated Net Income of the
Issuer for the period (taken as one accounting period) beginning October 1,
2005, to the end of the Issuer’s most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment, or, in the case such Consolidated Net Income for such period is a
deficit, minus 100% of such deficit; plus

 

(b)           100% of the aggregate net cash proceeds and
the fair market value, as determined in good faith by the Issuer, of marketable
securities or other property received by the Issuer since immediately after the
Issue Date (other than net cash proceeds to the extent such net cash proceeds
have been used to incur Indebtedness, Disqualified Stock or Preferred Stock
pursuant to clause (12)(a) of Section 4.09(b) hereof) from the
issue or sale of:

 

(i)            (A) Equity Interests of the Issuer,
including Treasury Capital Stock, but excluding cash proceeds and the fair
market value, as determined in good faith by the Issuer, of marketable
securities or other property received from the sale of:

 

(x)            Equity Interests to members of management,
directors or consultants of the Issuer, any direct or indirect parent company
of the Issuer and the Issuer’s Subsidiaries after the Issue Date to the extent
such amounts have been applied to Restricted Payments made in accordance with
clause (4) of Section 4.07(b) hereof; and

 

(y)           Designated Preferred Stock

 

and (B) to the extent such net cash proceeds
are actually contributed to the Issuer, Equity Interests of the Issuer’s direct
or indirect parent companies (excluding contributions of the proceeds from the
sale of Designated Preferred Stock of such companies or contributions to the
extent such amounts have been applied to Restricted Payments made in accordance
with clause (4) of Section 4.07(b) hereof); or

 

(ii)           debt securities of the Issuer that have been
converted into or exchanged for such Equity Interests of the Issuer;

 

60

 

provided, however, that this clause (b) shall not include the
proceeds from (W) Refunding Capital Stock, (X) Equity Interests or convertible
debt securities of the Issuer sold to a Restricted Subsidiary, as the case may
be, (Y) Disqualified Stock or debt securities that have been converted into
Disqualified Stock or (Z) Excluded Contributions; plus

 

(c)           100% of the aggregate amount of cash and the
fair market value, as determined in good faith by the Issuer, of marketable
securities or other property contributed to the capital of the Issuer following
the Issue Date (other than net cash proceeds to the extent such net cash
proceeds have been used to incur Indebtedness, Disqualified Stock or Preferred
Stock pursuant to clause (12)(a) of Section 4.09(b) hereof)
(other than by a Restricted Subsidiary and other than by any Excluded
Contributions); plus

 

(d)           100% of the aggregate amount received in cash
and the fair market value, as determined in good faith by the Issuer, of
marketable securities or other property received by means of:

 

(i)            the sale or other disposition (other than to
the Issuer or a Restricted Subsidiary) of Restricted Investments made by the
Issuer or its Restricted Subsidiaries and repurchases and redemptions of such
Restricted Investments from the Issuer or its Restricted Subsidiaries and
repayments of loans or advances, and releases of guarantees, which constitute
Restricted Investments by the Issuer or its Restricted Subsidiaries, in each case
after the Issue Date; or

 

(ii)           the sale (other than to the Issuer or a
Restricted Subsidiary) of the stock of an Unrestricted Subsidiary or a
distribution from an Unrestricted Subsidiary (other than in each case to the
extent the Investment in such Unrestricted Subsidiary was made by the Issuer or
a Restricted Subsidiary pursuant to clause (7) of Section 4.07(b) hereof
or to the extent such Investment constituted a Permitted Investment) or a
dividend from an Unrestricted Subsidiary after the Issue Date; plus

 

(e)           in the case of the redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary after the Issue Date, the
fair market value of the Investment in such Unrestricted Subsidiary, as
determined by the Issuer in good faith or if, in the case of an Unrestricted
Subsidiary, such fair market value may exceed $15.0 million, in writing by
an Independent Financial Advisor, at the time of the redesignation of such
Unrestricted Subsidiary as a Restricted Subsidiary other than an Unrestricted
Subsidiary to the extent the Investment in such Unrestricted Subsidiary was
made by the Issuer or a Restricted Subsidiary pursuant to clause (7) of Section 4.07(b) hereof
or to the extent such Investment constituted a Permitted Investment.

 

(b)           The foregoing provisions of Section 4.07(a) hereof
shall not prohibit:

 

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

 

(2)           (a) the redemption, repurchase,
retirement or other acquisition of any Equity Interests (“Treasury Capital
Stock”) or Subordinated Indebtedness of the Issuer or any Equity Interests

 

61

 

of any direct or indirect parent company of the
Issuer, in exchange for, or out of the proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary) of, Equity Interests of the Issuer
or any direct or indirect parent company of the Issuer to the extent contributed
to the Issuer (in each case, other than any Disqualified Stock) (“Refunding
Capital Stock”) and (b) if immediately prior to the retirement of
Treasury Capital Stock, the declaration and payment of dividends thereon was
permitted under clause (6) of this Section 4.07(b), the declaration
and payment of dividends on the Refunding Capital Stock (other than Refunding
Capital Stock the proceeds of which were used to redeem, repurchase, retire or
otherwise acquire any Equity Interests of any direct or indirect parent company
of the Issuer) in an aggregate amount per year no greater than the aggregate
amount of dividends per annum that were declarable and payable on such Treasury
Capital Stock immediately prior to such retirement;

 

(3)           the redemption, repurchase or other
acquisition or retirement of Subordinated Indebtedness of the Issuer or a
Guarantor made by exchange for, or out of the proceeds of the substantially
concurrent sale of, new Indebtedness of the Issuer or a Guarantor, as the case
may be, which is incurred in compliance with Section 4.09 hereof so long
as:

 

(a)           the principal amount of such new Indebtedness
does not exceed the principal amount of (or accreted value, if applicable),
plus any accrued and unpaid interest on, the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired for value, plus the amount of any
reasonable premium required to be paid under the terms of the instrument
governing the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired and any reasonable fees and expenses incurred in connection
with the issuance of such new Indebtedness;

 

(b)           such new Indebtedness is subordinated to the
Notes or the applicable Guarantee at least to the same extent as such
Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased,
acquired or retired for value;

 

(c)           such new Indebtedness has a final scheduled
maturity date equal to or later than the final scheduled maturity date of the
Subordinated Indebtedness being so redeemed, repurchased, acquired or retired;
and

 

(d)           such new Indebtedness has a Weighted Average
Life to Maturity equal to or greater than the remaining Weighted Average Life
to Maturity of the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired;

 

(4)           a Restricted Payment to pay for the
repurchase, retirement or other acquisition or retirement for value of Equity
Interests (other than Disqualified Stock) of the Issuer or any of its direct or
indirect parent companies held by any future, present or former employee,
director or consultant of the Issuer, any of its Subsidiaries or any of its
direct or indirect parent companies pursuant to any management equity plan or
stock option plan or any other management or employee benefit plan or
agreement; provided, however, that the aggregate Restricted
Payments made under this clause (4) do not exceed in any calendar year
$10.0 million (with unused amounts in any calendar year being carried over
to succeeding calendar years subject to a maximum (without giving effect to the
following proviso) of $20.0 million in any calendar year); provided
further that such amount in any calendar year may be increased by an
amount not to exceed:

 

62

 

(a)           the cash proceeds from the sale of Equity
Interests (other than Disqualified Stock) of the Issuer and, to the extent
contributed to the Issuer, Equity Interests of any of the Issuer’s direct or
indirect parent companies, in each case to members of management, directors or
consultants of the Issuer, any of its Subsidiaries or any of its direct or
indirect parent companies that occurs after the Issue Date, to the extent the
cash proceeds from the sale of such Equity Interests have not otherwise been
applied to the payment of Restricted Payments by virtue of clause (3) of Section 4.07(a) hereof;
plus

 

(b)           the cash proceeds of key man life insurance
policies received by the Issuer or its Restricted Subsidiaries after the Issue
Date; less

 

(c)           the amount of any Restricted Payments
previously made with the cash proceeds described in clauses (a) and (b) of
this clause (4);

 

and provided further that cancellation of
Indebtedness owing to the Issuer from members of management of the Issuer, any
of the Issuer’s direct or indirect parent companies or any of the Issuer’s
Restricted Subsidiaries in connection with a repurchase of Equity Interests of
the Issuer or any of its direct or indirect parent companies will not be deemed
to constitute a Restricted Payment for purposes of this Section 4.07 or
any other provision of this Indenture; provided, however, in the case of this Section 4.07(b)(4),
that for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date of such
Restricted Payment, the Issuer and its Restricted Subsidiaries on a
consolidated basis would have had a Fixed Charge Coverage Ratio of at least
2.00 to 1.00; and provided further that the aggregate amount of Restricted
Payments made pursuant to this Section 4.07(b)(4) shall not exceed
$50.0 million;

 

(5)           the declaration and payment of dividends to
holders of any class or series of Disqualified Stock of the Issuer or any of
its Restricted Subsidiaries issued in accordance with Section 4.09 hereof
to the extent such dividends are included in the definition of “Fixed Charges”;

 

(6)           (a) the declaration and payment of
dividends to holders of any class or series of Designated Preferred Stock
(other than Disqualified Stock) issued by the Issuer after the Issue Date;

 

(b)           the declaration and payment of dividends to a
direct or indirect parent company of the Issuer, the proceeds of which will be
used to fund the payment of dividends to holders of any class or series of
Designated Preferred Stock (other than Disqualified Stock) of such parent
corporation issued after the Issue Date, provided that the amount of
dividends paid pursuant to this clause (b) shall not exceed the aggregate
amount of cash actually contributed to the Issuer from the sale of such
Designated Preferred Stock; or

 

(c)           the declaration and payment of dividends on
Refunding Capital Stock that is Preferred Stock in excess of the dividends
declarable and payable thereon pursuant to clause (2) of this Section 4.07(b);

 

provided, however, in the case of each of (a), (b) and (c) of
this clause (6), that for the most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding the
date of issuance of such Designated Preferred Stock or the declaration of such
dividends on Refunding Capital Stock that is Preferred Stock, after giving
effect to such issuance

 

63

 

or declaration on a pro
forma basis, the Issuer and its Restricted Subsidiaries on a
consolidated basis would have had a Fixed Charge Coverage Ratio of at least
2.00 to 1.00;

 

(7)           Investments in Unrestricted Subsidiaries
having an aggregate fair market value, taken together with all other
Investments made pursuant to this clause (7) that are at the time
outstanding, without giving effect to the sale of an Unrestricted Subsidiary to
the extent the proceeds of such sale do not consist of cash or marketable
securities, not to exceed the greater of (x) $20.0 million and (y) 1.5% of
Total Assets at the time of such Investment (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value);

 

(8)           repurchases of Equity Interests deemed to
occur upon exercise of stock options or warrants if such Equity Interests
represent a portion of the exercise price of such options or warrants;

 

(9)           the declaration and payment of dividends on
the Issuer’s common stock (or the payment of dividends to any direct or
indirect parent entity to fund a payment of dividends on such entity’s common
stock), following the first public offering of the Issuer’s common stock or the
common stock of any of its direct or indirect parent companies after the Issue
Date, of up to 6% per annum of the net cash proceeds received by or contributed
to the Issuer in or from any such public offering, other than public offerings
with respect to the Issuer’s common stock registered on Form S-8 and other
than any public sale constituting an Excluded Contribution; provided, however,
in the case of this Section 4.07(b)(9), that for the most recently ended
four full fiscal quarters for which internal financial statements are available
immediately preceding the date of the declaration of such dividend, after
giving effect to such dividend on a pro
forma basis, the Issuer and its Restricted Subsidiaries on a
consolidated basis would have had a Fixed Charge Coverage Ratio of at least
2.00 to 1.00;

 

(10)         Restricted Payments that are made with
Excluded Contributions;

 

(11)         other Restricted Payments in an aggregate
amount taken together with all other Restricted Payments made pursuant to this
clause (11) not to exceed $25.0 million;

 

(12)         distributions or payments of Receivables
Fees;

 

(13)         any Restricted Payment used to fund the
Transaction and the fees and expenses related thereto or owed to Affiliates, in
each case to the extent permitted by Section 4.11 hereof;

 

(14)         the repurchase, redemption or other
acquisition or retirement for value of any Subordinated Indebtedness pursuant
to the provisions similar to those described under Sections 4.10 and Section 4.14
hereof; provided that all Notes tendered by Holders in connection with a
Change of Control Offer or Asset Sale Offer, as applicable, have been
repurchased, redeemed or acquired for value;

 

(15)         the declaration and payment of dividends by
the Issuer to, or the making of loans to, any direct or indirect parent in
amounts required for any direct or indirect parent companies to pay, in each
case without duplication,

 

64

 

(a)           franchise taxes and other fees, taxes and
expenses required to maintain their corporate existence;

 

(b)           federal, state and local income taxes, to the
extent such income taxes are attributable to the income of the Issuer and its
Restricted Subsidiaries and, to the extent of the amount actually received from
its Unrestricted Subsidiaries, in amounts required to pay such taxes to the
extent attributable to the income of such Unrestricted Subsidiaries; provided
that in each case the amount of such payments in any fiscal year does not
exceed the amount that the Issuer and its Restricted Subsidiaries would be
required to pay in respect of federal, state and local taxes for such fiscal
year were the Issuer, its Restricted Subsidiaries and its Unrestricted
Subsidiaries (to the extent described above) to pay such taxes separately from
any such parent entity;

 

(c)           customary salary, bonus and other benefits
payable to officers and employees of any direct or indirect parent company of
the Issuer to the extent such salaries, bonuses and other benefits are
attributable to the ownership or operation of the Issuer and its Restricted
Subsidiaries;

 

(d)           general corporate operating and overhead
costs and expenses of any direct or indirect parent company of the Issuer to
the extent such costs and expenses are attributable to the ownership or
operation of the Issuer and its Restricted Subsidiaries; and

 

(e)           fees and expenses other than to Affiliates of
the Issuer related to any unsuccessful equity or debt offering of such parent
entity; and

 

(16)         the distribution, dividend or otherwise, of
shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted
Subsidiary by Unrestricted Subsidiaries (other than Unrestricted Subsidiaries,
the primary assets of which are cash and/or Cash Equivalents);

 

provided, however,
that at the time of, and after giving effect to, any Restricted Payment
permitted under clauses (11) and (16) of this Section 4.07(b), no
Default shall have occurred and be continuing or would occur as a consequence
thereof.

 

(c)           The Issuer shall not permit any Unrestricted
Subsidiary to become a Restricted Subsidiary except pursuant to the last
sentence of the definition of “Unrestricted Subsidiary.”  For purposes of designating any Restricted
Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the
Issuer and its Restricted Subsidiaries (except to the extent repaid) in the
Subsidiary so designated shall be deemed to be Restricted Payments in an amount
determined as set forth in the last sentence of the definition of “Investment.”  Such designation shall be permitted only if a
Restricted Payment in such amount would be permitted at such time, whether
pursuant to Section 4.07(a) hereof or under clause (7), (10), (11) or
(16) of Section 4.07(b) hereof, or pursuant to the definition of “Permitted
Investments,” and if such Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary.

 

Section 4.08           Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.

 

(a)           The Issuer shall not, and shall not permit
any of its Restricted Subsidiaries that are not Guarantors to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective

 

65

 

any
consensual encumbrance or consensual restriction on the ability of any such
Restricted Subsidiary to:

 

(1)           (A)  pay dividends or make any other
distributions to the Issuer or any of its Restricted Subsidiaries on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, or

 

(B)           pay any Indebtedness owed to the Issuer or
any of its Restricted Subsidiaries;

 

(2)           make loans or advances to the Issuer or any
of its Restricted Subsidiaries; or

 

(3)           sell, lease or transfer any of its properties
or assets to the Issuer or any of its Restricted Subsidiaries.

 

(b)           The restrictions in Section 4.08(a) hereof
shall not apply to encumbrances or restrictions existing under or by reason of:

 

(1)           contractual encumbrances or restrictions in
effect on the Issue Date, including pursuant to the Senior Credit Facilities
and the related documentation;

 

(2)           this Indenture and the Notes;

 

(3)           purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature discussed in clause (3) of Section 4.08(a) hereof on the
property so acquired;

 

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

 

(5)           any agreement or other instrument of a Person
acquired by the Issuer or any of its Restricted Subsidiaries in existence at
the time of such acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any Person, or the properties
or assets of any Person, other than the Person and its Subsidiaries, or the
property or assets of the Person and its Subsidiaries, so acquired;

 

(6)           contracts for the sale of assets, including
customary restrictions with respect to a Subsidiary of the Issuer pursuant to
an agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary;

 

(7)           Secured Indebtedness otherwise permitted to
be incurred pursuant to Section 4.09 hereof and Section 4.12 hereof
that limit the right of the debtor to dispose of the assets securing such
Indebtedness;

 

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

 

(9)           other Indebtedness, Disqualified Stock or
Preferred Stock of Foreign Subsidiaries permitted to be incurred subsequent to
the Issue Date pursuant to the provisions of Section 4.09 hereof;

 

66

 

(10)         customary provisions in joint venture
agreements and other similar agreements relating solely to such joint venture;

 

(11)         customary provisions contained in leases or
licenses of intellectual property and other agreements, in each case, entered
into in the ordinary course of business;

 

(12)         any encumbrances or restrictions of the type
referred to in clauses (1), (2) and (3) of Section 4.08(a) hereof
imposed by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (1) through (11) of this
Section 4.08(b); provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings are, in the good faith judgment of the Issuer, no more restrictive
with respect to such encumbrance and other restrictions taken as a whole than
those prior to such amendment, modification, restatement, renewal, increase,
supplement, refunding, replacement or refinancing; and

 

(13)         restrictions created in connection with any
Receivables Facility that, in the good faith determination of the Issuer are
necessary or advisable to effect such Receivables Facility.

 

Section 4.09           Limitation on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock.

 

(a)           The Issuer shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise (collectively, “incur” and collectively, an “incurrence”)
with respect to any Indebtedness (including Acquired Indebtedness) and the
Issuer shall not issue any shares of Disqualified Stock and shall not permit
any Restricted Subsidiary to issue any shares of Disqualified Stock or
Preferred Stock; provided, however, that the Issuer may incur
Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified
Stock, and any of its Restricted Subsidiaries may incur Indebtedness (including
Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of
Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for
the Issuer and its Restricted Subsidiaries’ most recently ended four fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock or Preferred Stock is issued would have been at least 2.00
to 1.00, determined on a pro forma
basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred, or the Disqualified Stock or Preferred Stock had been
issued, as the case may be, and the application of proceeds therefrom had
occurred at the beginning of such four-quarter period, provided, however,
that Restricted Subsidiaries that are not Guarantors may not incur Indebtedness
or issue Disqualified Stock or Preferred Stock if, after giving pro forma effect to such incurrence or
issuance (including a pro forma
application of the net proceeds therefrom), more than an aggregate of $50.0
million of Indebtedness or Disqualified Stock or Preferred Stock of Restricted
Subsidiaries that are not Guarantors is outstanding pursuant to this Section 4.09(a) at
such time.

 

(b)           The provisions of Section 4.09(a) hereof
shall not apply to:

 

(1)           the incurrence of Indebtedness under Credit
Facilities by the Issuer or any of its Restricted Subsidiaries and the issuance
and creation of letters of credit and bankers’ acceptances thereunder (with
letters of credit and bankers’ acceptances being deemed to have a principal
amount equal to the face amount thereof), up to the following aggregate
principal amounts:  (a)

 

67

 

up to $75.0 million of Indebtedness under any
revolving credit facility outstanding at any time pursuant to this Section 4.09(b)(1)(a),
(b) up to $400.0 million of Indebtedness in the form of term loans
outstanding at any time pursuant to this Section 4.09(b)(1)(b), provided
that if, at the time of incurrence under this Section 4.09(b)(1)(b), the
Issuer’s Senior Leverage Ratio, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) is
greater than the Applicable Senior Leverage Ratio, such amount shall be reduced
by the amount of any mandatory principal payments actually made by the borrower
thereunder in respect of Indebtedness thereunder with Net Proceeds from an
Asset Sale or series of related Asset Sales that constitutes the sale, transfer,
conveyance or other disposition of all or substantially all of a segment (as
defined under GAAP) of the Issuer (other than any segment predominantly
composed of assets acquired by the Issuer or its Restricted Subsidiaries
subsequent to the Issue Date), and (c) up to $100.0 million of
Indebtedness in the form of term loans outstanding at any time pursuant to this
Section 4.09(b)(1)(c), provided that at the time of incurrence under this Section 4.09(b)(1)(c),
the Issuer’s Senior Leverage Ratio, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) is less
than or equal to the Applicable Senior Leverage Ratio;

 

(2)           the incurrence by the Issuer and any
Guarantor of Indebtedness represented by the Notes (including any Guarantee)
(other than any Additional Notes);

 

(3)           Indebtedness of the Issuer and its Restricted
Subsidiaries in existence on the Issue Date, including the 10% Senior
Subordinated Notes due 2012 of Accellent Corp. (other than Indebtedness
described in clauses (1) and (2) of this Section 4.09(b));

 

(4)           Indebtedness (including Capitalized Lease
Obligations), Disqualified Stock and Preferred Stock incurred by the Issuer or
any of its Restricted Subsidiaries, to finance the purchase, lease or
improvement of property (real or personal) or equipment that is used or useful
in a Similar Business, whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets up to an aggregate amount which,
when aggregated with the principal amount of all other Indebtedness,
Disqualified Stock and Preferred Stock then outstanding and incurred pursuant
to this clause (4) and including all Refinancing Indebtedness incurred to
refund, refinance or replace any other Indebtedness, Disqualified Stock and
Preferred Stock incurred pursuant to this clause (4), does not exceed the
greater of (x) $25.0 million and (y) 1.5% of Total Assets;

 

(5)           Indebtedness incurred by the Issuer or any of
its Restricted Subsidiaries constituting reimbursement obligations with respect
to letters of credit issued in the ordinary course of business, including
letters of credit in respect of workers’ compensation claims, or other
Indebtedness with respect to reimbursement type obligations regarding workers’
compensation claims; provided, however, that upon the drawing of
such letters of credit or the incurrence of such Indebtedness, such obligations
are reimbursed within 30 days following such drawing or incurrence;

 

(6)           Indebtedness arising from agreements of the
Issuer or its Restricted Subsidiaries providing for indemnification, adjustment
of purchase price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or a Subsidiary, other
than guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or a Subsidiary for the purpose of financing
such acquisition; provided, however, that

 

68

 

(A)          such Indebtedness is not reflected on the
balance sheet of the Issuer, or any of its Restricted Subsidiaries (Contingent
Obligations referred to in a footnote to financial statements and not otherwise
reflected on the balance sheet will not be deemed to be reflected on such
balance sheet for purposes of this clause (6)(A)); and

 

(B)           the maximum assumable liability in respect of
all such Indebtedness shall at no time exceed the gross proceeds including
non-cash proceeds (the fair market value of such non-cash proceeds being
measured at the time received and without giving effect to any subsequent
changes in value) actually received by the Issuer and its Restricted
Subsidiaries in connection with such disposition;

 

(7)           Indebtedness of the Issuer to a Restricted
Subsidiary; provided that any such Indebtedness owing to a Restricted
Subsidiary that is not a Guarantor is expressly subordinated in right of
payment to the Notes; provided  further that any subsequent
issuance or transfer of any Capital Stock or any other event which results in
any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such Indebtedness (except to the Issuer or another
Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of
such Indebtedness;

 

(8)           Indebtedness of a Restricted Subsidiary to
the Issuer or another Restricted Subsidiary; provided that if a
Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a
Guarantor, such Indebtedness is expressly subordinated in right of payment to
the Guarantee of the Notes of such Guarantor; provided  further
that any subsequent transfer of any such Indebtedness (except to the Issuer or
another Restricted Subsidiary) shall be deemed, in each case, to be an
incurrence of such Indebtedness;

 

(9)           shares of Preferred Stock of a Restricted
Subsidiary issued to the Issuer or another Restricted Subsidiary, provided
that any subsequent issuance or transfer of any Capital Stock or any other
event which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such shares of Preferred
Stock (except to the Issuer or another of its Restricted Subsidiaries) shall be
deemed in each case to be an issuance of such shares of Preferred Stock;

 

(10)         Hedging Obligations (excluding Hedging
Obligations entered into for speculative purposes) for the purpose of limiting
interest rate risk with respect to any Indebtedness permitted to be incurred
pursuant to this Section 4.09, exchange rate risk or commodity pricing
risk;

 

(11)         obligations in respect of performance, bid,
appeal and surety bonds and completion guarantees provided by the Issuer or any
of its Restricted Subsidiaries in the ordinary course of business;

 

(12)         (a) Indebtedness, Disqualified Stock or
Preferred Stock of the Issuer or any Restricted Subsidiary equal to 100.0% of
the net cash proceeds received by the Issuer since immediately after the Issue
Date from the issue or sale of Equity Interests of the Issuer or cash
contributed to the capital of the Issuer (in each case, other than proceeds of
Disqualified Stock or sales of Equity Interests to the Issuer or any of its
Subsidiaries) as determined in accordance with clauses (3)(b) and (3)(c) of
Section 4.07(a) hereof to the extent such net cash proceeds or cash
have not been applied pursuant to such clauses to make Restricted Payments or
to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof
or to make Permitted

 

69

 

Investments (other than Permitted Investments
specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness,
Disqualified Stock or Preferred Stock of the Issuer or any Restricted
Subsidiary not otherwise permitted hereunder in an aggregate principal amount
or liquidation preference, which when aggregated with the principal amount and
liquidation preference of all other Indebtedness, Disqualified Stock and
Preferred Stock then outstanding and incurred pursuant to this
clause (12)(b), does not at any one time outstanding exceed $60.0
million (it being understood that any Indebtedness, Disqualified Stock or
Preferred Stock incurred pursuant to this clause (12)(b) shall cease
to be deemed incurred or outstanding for purposes of this clause (12)(b) but
shall be deemed incurred for the purposes of Section 4.09(a) hereof
from and after the first date on which the Issuer or such Restricted Subsidiary
could have incurred such Indebtedness, Disqualified Stock or Preferred Stock
under Section 4.09(a) hereof without reliance on this
clause (12)(b));

 

(13)         the incurrence by the Issuer or any
Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock
which serves to refund or refinance any Indebtedness, Disqualified Stock or
Preferred Stock incurred as permitted under Section 4.09(a) hereof
and clauses (2), (3) and (12)(a) of this Section 4.09(b),
this clause (13) and clause (14) of this Section 4.09(b) or any
Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or
refinance such Indebtedness, Disqualified Stock or Preferred Stock including
additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay
premiums (including reasonable tender premiums), defeasance costs and fees in
connection therewith (the “Refinancing Indebtedness”) prior to its
respective maturity; provided, however, that such Refinancing
Indebtedness:

 

(A)          has a Weighted Average Life to Maturity at
the time such Refinancing Indebtedness is incurred which is not less than the
remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified
Stock or Preferred Stock being refunded or refinanced,

 

(B)           to the extent such Refinancing Indebtedness
refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such
Refinancing Indebtedness is subordinated or pari
passu to the Notes or the Guarantee at least to the same extent as
the Indebtedness being refinanced or refunded or (ii) Disqualified Stock
or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or
Preferred Stock, respectively, and

 

(C)           shall not include:

 

(i)            Indebtedness, Disqualified Stock or Preferred
Stock of a Subsidiary of the Issuer that is not a Guarantor that refinances
Indebtedness, Disqualified Stock or Preferred Stock of the Issuer;

 

(ii)           Indebtedness, Disqualified Stock or Preferred
Stock of a Subsidiary of the Issuer that is not a Guarantor that refinances
Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor; or

 

(iii)          Indebtedness, Disqualified Stock or Preferred
Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness,
Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;

 

70

 

and provided  further
that subclause (A) of this clause (13) will not apply to any
refunding or refinancing of any Indebtedness outstanding under any Senior
Indebtedness;

 

(14)          Indebtedness, Disqualified Stock or Preferred
Stock of Persons that are acquired by the Issuer or any Restricted Subsidiary
or merged into the Issuer or a Restricted Subsidiary in accordance with the
terms of this Indenture; provided that after giving effect to such
acquisition or merger, either:

 

(a)            the Issuer would be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 4.09(a) hereof, or

 

(b)            the Fixed Charge Coverage Ratio of the Issuer
and the Restricted Subsidiaries is greater than immediately prior to such
acquisition or merger;

 

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

 

(16)         Indebtedness of the Issuer or any of its
Restricted Subsidiaries supported by a letter of credit issued pursuant to the
Credit Facilities, in a principal amount not in excess of the stated amount of
such letter of credit;

 

(17)         (a) any guarantee by the Issuer or a
Restricted Subsidiary of Indebtedness or other obligations of any Restricted
Subsidiary so long as the incurrence of such Indebtedness incurred by such
Restricted Subsidiary is permitted under the terms of this Indenture, or

 

(b)           any guarantee by a Restricted Subsidiary of
Indebtedness of the Issuer provided that such guarantee is incurred in
accordance with Section 4.15 hereof;

 

(18)         Indebtedness of Foreign Subsidiaries of the
Issuer incurred not to exceed at any one time outstanding and together with any
other Indebtedness incurred under this clause (18) 5.0% of the Total Assets of
the Foreign Subsidiaries (it being understood that any Indebtedness incurred
pursuant to this clause (18) shall cease to be deemed incurred or outstanding
for purposes of this clause (18) but shall be deemed incurred for the purposes
of Section 4.09(a) hereof from and after the first date on which the
Issuer or such Restricted Subsidiary could have incurred such Indebtedness
under Section 4.09(a) hereof without reliance on this clause (18));

 

(19)         Indebtedness, Disqualified Stock or Preferred
Stock of a Restricted Subsidiary incurred to finance or assumed in connection
with an acquisition in a principal amount not to exceed $20.0 million in the
aggregate at any one time outstanding together with all other Indebtedness,
Disqualified Stock and/or Preferred Stock issued under this clause (19)
(it being understood that any Indebtedness, Disqualified Stock or Preferred
Stock incurred pursuant to this clause (19) shall cease to be deemed incurred
or outstanding for purposes of this clause (19) but shall be deemed incurred
for the purposes of Section 4.09(a) hereof from and after the first
date on which such Restricted Subsidiary could have incurred such Indebtedness,
Disqualified Stock or Preferred Stock under Section 4.09(a) hereof
without reliance on this clause (19)); and

 

71

 

(20)         Indebtedness of the Issuer or any of its
Restricted Subsidiaries consisting of (i) the financing of insurance
premiums or (ii) take-or-pay obligations contained in supply arrangements
in each case, incurred in the ordinary course of business.

 

(c)           For purposes of determining compliance with
this Section 4.09:

 

(1)           in the event that an item of Indebtedness,
Disqualified Stock or Preferred Stock (or any portion thereof) meets the
criteria of more than one of the categories of permitted Indebtedness, Disqualified
Stock or Preferred Stock described in clauses (1) through (21) of Section 4.09(b) hereof
or is entitled to be incurred pursuant to Section 4.09(a) hereof, the
Issuer, in its sole discretion, shall classify or reclassify such item of
Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof)
and shall only be required to include the amount and type of such Indebtedness,
Disqualified Stock or Preferred Stock in one of the above clauses; provided
that all Indebtedness outstanding under the Credit Facilities on the Issue Date
shall be treated as incurred on the Issue Date under clause (1) of Section 4.09(b) hereof;
and

 

(2)           at the time of incurrence, the Issuer shall
be entitled to divide and classify an item of Indebtedness in more than one of
the types of Indebtedness described in Sections 4.09(a) and 4.09(b) hereof.

 

Accrual of interest, the accretion of accreted value
and the payment of interest in the form of additional Indebtedness,
Disqualified Stock or Preferred Stock shall not be deemed to be an incurrence
of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.09.

 

For purposes of determining compliance with any U.S.
dollar-denominated restriction on the incurrence of Indebtedness, the U.S.
dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was incurred, in the case of term debt, or
first committed, in the case of revolving credit debt; provided that if
such Indebtedness is incurred to refinance other Indebtedness denominated in a
foreign currency, and such refinancing would cause the applicable U.S. dollar
denominated restriction to be exceeded if calculated at the relevant currency
exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated
restriction shall be deemed not to have been exceeded so long as the principal
amount of such refinancing Indebtedness does not exceed the principal amount of
such Indebtedness being refinanced.

 

The principal amount of any Indebtedness incurred to
refinance other Indebtedness, if incurred in a different currency from the
Indebtedness being refinanced, shall be calculated based on the currency
exchange rate applicable to the currencies in which such respective
Indebtedness is denominated that is in effect on the date of such refinancing.

 

Section 4.10           Asset Sales.

 

(a)           The Issuer shall not, and shall not permit
any of its Restricted Subsidiaries to, cause, make or suffer to exist an Asset
Sale, unless:

 

(1)           the Issuer or such Restricted Subsidiary, as
the case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value (as determined in good faith by the Issuer) of
the assets sold or otherwise disposed of; and

 

72

 

(2)           except in the case of a Permitted Asset Swap,
at least 75% of the consideration therefor received by the Issuer or such
Restricted Subsidiary, as the case may be, is in the form of cash or Cash
Equivalents; provided that the amount of:

 

(A)          any liabilities (as shown on the Issuer’s or
such Restricted Subsidiary’s most recent balance sheet or in the footnotes
thereto) of the Issuer or such Restricted Subsidiary, other than liabilities
that are by their terms subordinated to the Notes, that are assumed by the
transferee of any such assets and for which the Issuer and all of its
Restricted Subsidiaries have been validly released by all creditors in writing,

 

(B)           any securities received by the Issuer or such
Restricted Subsidiary from such transferee that are converted by the Issuer or
such Restricted Subsidiary into cash (to the extent of the cash received)
within 180 days following the closing of such Asset Sale, and

 

(C)           any Designated Non-cash Consideration
received by the Issuer or such Restricted Subsidiary in such Asset Sale having
an aggregate fair market value, taken together with all other Designated
Non-cash Consideration received pursuant to this clause (C) that is
at that time outstanding, not to exceed 2.5% of Total Assets at the time of the
receipt of such Designated Non-cash Consideration, with the fair market value
of each item of Designated Non-cash Consideration being measured at the time
received and without giving effect to subsequent changes in value,

 

shall be deemed to be cash for purposes of this
provision and for no other purpose.

 

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

 

(1)           to permanently reduce:

 

(A)          Obligations under Senior Indebtedness, and to
correspondingly reduce commitments with respect thereto;

 

(B)           Obligations under Senior Subordinated
Indebtedness (and to correspondingly reduce commitments with respect thereto); provided
that the Issuer shall equally and ratably reduce Obligations under the Notes as
provided under Section 3.07 hereof through open-market purchases (to the
extent such purchases are at or above 100% of the principal amount thereof) or
by making an offer (in accordance with the procedures set forth under Section 4.10(c) hereof)
to all Holders to purchase their Notes at 100% of the principal amount thereof,
plus the amount of accrued but unpaid interest, if any, on the amount of Notes
that would otherwise be prepaid, or

 

(C)           Indebtedness of a Restricted Subsidiary that
is not a Guarantor, other than Indebtedness owed to the Issuer or another
Restricted Subsidiary,

 

(2)           to make (A) an Investment in any one or
more businesses, provided that such Investment in any business is in the
form of the acquisition of Capital Stock and results in the Issuer or another
of its Restricted Subsidiaries, as the case may be, owning an amount of the
Capital Stock of such business such that it constitutes a Restricted
Subsidiary, (B) capital expenditures or

 

73

 

(C) acquisitions of other assets, in each of
(A), (B) and (C), used or useful in a Similar Business, or

 

(3)           to make an investment in (A) any one or
more businesses, provided that such Investment in any business is in the
form of the acquisition of Capital Stock and results in the Issuer or another
of its Restricted Subsidiaries, as the case may be, owning an amount of the
Capital Stock of such business such that it constitutes a Restricted
Subsidiary, (B) properties or (C) acquisitions of other assets that,
in each of (A), (B) and (C), replace the businesses, properties and/or
assets that are the subject of such Asset Sale;

 

provided
that, in the case of clauses (2) and (3) above, a binding commitment
shall be treated as a permitted application of the Net Proceeds from the date
of such commitment so long as the Issuer, or such other Restricted Subsidiary
enters into such commitment with the good faith expectation that such Net
Proceeds shall be applied to satisfy such commitment within 180 days of such
commitment (an “Acceptable Commitment”) and, in the event any Acceptable
Commitment is later cancelled or terminated for any reason before the Net
Proceeds are applied in connection therewith, the Issuer or such Restricted
Subsidiary enters into another Acceptable Commitment (a “Second Commitment”)
within 180 days of entering into the first such Acceptable Commitment; provided
further that if any Second Commitment is later cancelled or terminated
for any reason before such Net Proceeds are applied, then such Net Proceeds
shall constitute Excess Proceeds.

 

(c)           Any Net Proceeds from the Asset Sale that are
not invested or applied as provided and within the time period set forth in Section 4.10(b) shall
be deemed to constitute “Excess Proceeds.” When the aggregate amount of
Excess Proceeds exceeds $20.0 million, the Issuer shall make an offer to
all Holders of the Notes and, if required by the terms of any Indebtedness that
is pari passu with the Notes (“Pari
Passu Indebtedness”), to the holders of such Pari Passu Indebtedness (an “Asset
Sale Offer”), to purchase the maximum aggregate principal amount of the
Notes and such Pari Passu Indebtedness that is $2,000 or an integral multiple
of $1,000 in excess of $2,000 that may be purchased out of the Excess Proceeds
at an offer price in cash in an amount equal to 100% of the principal amount
thereof, plus accrued and unpaid interest and Additional Interest, if any, to
the date fixed for the closing of such offer, in accordance with the procedures
set forth in this Indenture.  The Issuer
shall commence an Asset Sale Offer with respect to Excess Proceeds within ten
Business Days after the date that Excess Proceeds exceed $20.0 million by
mailing the notice required pursuant to the terms of this Indenture, with a
copy to the Trustee.

 

To the extent that the aggregate amount of Notes and
such Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for
general corporate purposes, subject to other covenants contained in this
Indenture.  If the aggregate principal
amount of Notes or the Pari Passu Indebtedness surrendered by such holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes and such Pari Passu Indebtedness to be purchased on a pro rata basis based on the accreted value
or principal amount of the Notes or such Pari Passu Indebtedness tendered.  Upon completion of any such Asset Sale Offer,
the amount of Excess Proceeds shall be reset at zero.

 

(d)           Pending the final application of any Net
Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds
may apply such Net Proceeds temporarily to reduce Indebtedness outstanding
under a revolving credit facility or otherwise invest such Net Proceeds in any
manner not prohibited by this Indenture.

 

74

 

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

 

Section 4.11           Transactions with Affiliates.

 

(a)           The Issuer shall not, and shall not permit
any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the Issuer (each of the foregoing, an “Affiliate
Transaction”) involving aggregate payments or consideration in excess of
$5.0 million, unless:

 

(1)           such Affiliate Transaction is on terms that
are not materially less favorable to the Issuer or its relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm’s-length
basis; and

 

(2)           the Issuer delivers to the Trustee with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate payments or consideration in excess of
$10.0 million, a resolution adopted by the majority of the board of
directors of the Issuer approving such Affiliate Transaction and set forth in
an Officer’s Certificate certifying that such Affiliate Transaction complies
with clause (1) of this Section 4.11(a).

 

(b)           The provisions of Section 4.11(a) hereof
shall not apply to the following:

 

(1)           transactions between or among the Issuer or
any of its Restricted Subsidiaries;

 

(2)           Restricted Payments permitted by Section 4.07
hereof and the definition of “Permitted Investments”;

 

(3)           the payment of management, consulting,
monitoring and advisory fees and related expenses to the Investors;

 

(4)           the payment of reasonable and customary fees
paid to, and indemnities provided on behalf of, officers, directors, employees
or consultants of the Issuer, any of its direct or indirect parent companies or
any of its Restricted Subsidiaries;

 

(5)           transactions in which the Issuer or any of
its Restricted Subsidiaries, as the case may be, delivers to the Trustee a
letter from an Independent Financial Advisor stating that such transaction is
fair to the Issuer or such Restricted Subsidiary from a financial point of view
or stating that the terms are not materially less favorable to the Issuer or
its relevant Restricted Subsidiary than those that would have been obtained in
a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated
Person on an arm’s-length basis;

 

75

 

(6)           any agreement as in effect as of the Issue
Date, or any amendment thereto (so long as any such amendment is not
disadvantageous to the Holders when taken as a whole as compared to the
applicable agreement as in effect on the Issue Date);

 

(7)           the existence of, or the performance by the
Issuer or any of its Restricted Subsidiaries of its obligations under the terms
of, any stockholders agreement (including any registration rights agreement or
purchase agreement related thereto) to which it is a party as of the Issue Date
and any similar agreements which it may enter into thereafter; provided,
however, that the existence of, or the performance by the Issuer or any of
its Restricted Subsidiaries of obligations under any future amendment to any
such existing agreement or under any similar agreement entered into after the
Issue Date shall only be permitted by this clause (7) to the extent that
the terms of any such amendment or new agreement are not otherwise
disadvantageous to the Holders when taken as a whole;

 

(8)           the Transaction and the payment of all fees
and expenses related to the Transaction, in each case as disclosed in the
Offering Circular;

 

(9)           transactions with customers, clients,
suppliers, or purchasers or sellers of goods or services, in each case in the
ordinary course of business and otherwise in compliance with the terms of this
Indenture which are fair to the Issuer and its Restricted Subsidiaries, in the
reasonable determination of the board of directors of the Issuer or the senior
management thereof, or are on terms at least as favorable as might reasonably
have been obtained at such time from an unaffiliated party;

 

(10)         the issuance of Equity Interests (other than
Disqualified Stock) of the Issuer to any Permitted Holder or to any director,
officer, employee or consultant;

 

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

 

(12)         payments by the Issuer or any of its
Restricted Subsidiaries to any of the Investors made for any financial
advisory, financing, underwriting or placement services or in respect of other
investment banking activities, including, without limitation, in connection
with acquisitions or divestitures which payments are approved by a majority of
the board of directors of the Issuer in good faith;

 

(13)         payments or loans (or cancellation of loans)
to employees or consultants of the Issuer, any of its direct or indirect parent
companies or any of its Restricted Subsidiaries and employment agreements,
stock option plans and other similar arrangements with such employees or
consultants which, in each case, are approved by the Issuer in good faith; and

 

(14)         investments by the Investors in securities of
the Issuer or any of its Restricted Subsidiaries so long as (i) the
investment is being offered generally to other investors on the same or more
favorable terms and (ii) the investment constitutes less than 5% of the
proposed or outstanding issue amount of such class of securities.

 

76

 

Section 4.12           Liens.

 

The Issuer shall not, and shall not permit any
Guarantor to, directly or indirectly, create, incur, assume or suffer to exist
any Lien (except Permitted Liens) that secures obligations under any
Indebtedness ranking pari passu
with or subordinated to the Notes or any related Guarantee, on any asset or
property of the Issuer or any Guarantor, or any income or profits therefrom, or
assign or convey any right to receive income therefrom, unless:

 

(1)           in the case of Liens securing Subordinated
Indebtedness, the Notes and related Guarantees are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Liens; or

 

(2)            in all other cases, the Notes or the
Guarantees are equally and ratably secured, except that the foregoing shall not
apply to (A) Liens securing the Notes and the related Guarantees and (B) Liens
securing Senior Indebtedness of the Issuer or any Guarantor.

 

Section 4.13           Corporate Existence.

 

Subject to Article 5 hereof, the Issuer shall
do or cause to be done all things necessary to preserve and keep in full force
and effect (i) its corporate existence, and the corporate, partnership or
other existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Issuer or any such Restricted Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of the Issuer and its
Restricted Subsidiaries; provided that the Issuer shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of any of its Restricted Subsidiaries, if the Issuer in good
faith shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Issuer and its Restricted Subsidiaries,
taken as a whole.

 

Section 4.14           Offer to Repurchase Upon Change of Control.

 

(a)           If a Change of Control occurs, unless the
Issuer has previously or concurrently mailed a redemption notice with respect
to all the outstanding Notes as described under Section 3.07 hereof, the
Issuer shall make an offer to purchase all of the Notes pursuant to the offer described
below (the “Change of Control Offer”) at a price in cash (the “Change
of Control Payment”) equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Additional Interest, if any, to
the date of purchase, subject to the right of Holders of the Notes of record on
the relevant Record Date to receive interest due on the relevant Interest
Payment Date.  Within 30 days following
any Change of Control, the Issuer shall send notice of such Change of Control
Offer by first-class mail, with a copy to the Trustee, to each Holder of Notes
to the address of such Holder appearing in the security register with a copy to
the Trustee, with the following information:

 

(1)           that a Change of Control Offer is being made
pursuant to this Section 4.14 and that all Notes properly tendered
pursuant to such Change of Control Offer will be accepted for payment by the
Issuer;

 

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

 

77

 

(3)           that any Note not properly tendered will
remain outstanding and continue to accrue interest;

 

(4)           that unless the Issuer defaults in the
payment of the Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer will cease to accrue interest on the
Change of Control Payment Date;

 

(5)           that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer will be required to surrender
such Notes, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of such Notes completed, to the paying agent specified in the notice at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;

 

(6)           that Holders shall be entitled to withdraw
their tendered Notes and their election to require the Issuer to purchase such
Notes, provided that the paying agent receives, not later than the close
of business on the 30th day following the date of the Change of Control notice,
a telegram, telex, facsimile transmission or letter setting forth the name of
the Holder of the Notes, the principal amount of Notes tendered for purchase,
and a statement that such Holder is withdrawing its tendered Notes and its
election to have such Notes purchased;

 

(7)           that if the Issuer is redeeming less than all
of the Notes, the Holders of the remaining Notes will be issued new Notes and
such new Notes will be equal in principal amount to the unpurchased portion of
the Notes surrendered.  The unpurchased
portion of the Notes must be equal to $2,000 or an integral multiple of $1,000
in excess of $2,000; and

 

(8)           the other instructions, as determined by the
Issuer, consistent with this Section 4.14, that a Holder must follow.

 

The notice, if mailed in a manner herein provided,
shall be conclusively presumed to have been given, whether or not the Holder
receives such notice.  If (a) the notice
is mailed in a manner herein provided and (b) any Holder fails to receive
such notice or a Holder receives such notice but it is defective, such Holder’s
failure to receive such notice or such defect shall not affect the validity of
the proceedings for the purchase of the Notes as to all other Holders that
properly received such notice without defect. 
The Issuer shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to
the extent such laws or regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer.  To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section 4.14,
the Issuer shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 4.14
by virtue thereof.

 

(b)           On the Change of Control Payment Date, the
Issuer shall, to the extent permitted by law,

 

(1)           accept for payment all Notes issued by it or
portions thereof properly tendered pursuant to the Change of Control Offer,

 

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

 

78

 

(3)           deliver, or cause to be delivered, to the
Trustee for cancellation the Notes so accepted together with an Officer’s
Certificate to the Trustee stating that such Notes or portions thereof have
been tendered to and purchased by the Issuer.

 

(c)           The Issuer shall not be required to make a
Change of Control Offer following a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in this Section 4.14 applicable
to a Change of Control Offer made by the Issuer and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.  Notwithstanding anything to the contrary
herein, a Change of Control Offer may be made in advance of a Change of
Control, conditional upon such Change of Control, if a definitive agreement is
in place for the Change of Control at the time of making of the Change of
Control Offer.

 

(d)           Other than as specifically provided in this Section 4.14,
any purchase pursuant to this Section 4.14 shall be made pursuant to the
provisions of Sections 3.02, 3.05 and 3.06 hereof.

 

Section 4.15           Limitation on Guarantees of Indebtedness by
Restricted Subsidiaries.

 

The Issuer shall not permit any of its Restricted
Subsidiaries that is a Domestic Subsidiary, other than a Guarantor or a
special-purpose Restricted Subsidiary formed in connection with Receivable
Subsidiaries, to guarantee the payment of any Indebtedness of the Issuer or any
other Guarantor unless:

 

(1)           such Restricted Subsidiary within 30 days
executes and delivers a supplemental indenture to this Indenture, the form of
which is attached as Exhibit D hereto, providing for a Guarantee by
such Restricted Subsidiary, except that with respect to a guarantee of
Indebtedness of the Issuer or any Guarantor:

 

(a)           if the Notes or such Guarantor’s Guarantee
are subordinated in right of payment to such Indebtedness, the Guarantee under
the supplemental indenture shall be subordinated to such Restricted Subsidiary’s
guarantee with respect to such Indebtedness substantially to the same extent as
the Notes are subordinated to such Indebtedness; and

 

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

 

(2)           such Restricted Subsidiary waives and shall
not in any manner whatsoever claim or take the benefit or advantage of, any
rights of reimbursement, indemnity or subrogation or any other rights against
the Issuer or any other Restricted Subsidiary as a result of any payment by
such Restricted Subsidiary under its Guarantee; and

 

(3)           such Restricted Subsidiary shall deliver to
the Trustee an Opinion of Counsel to the effect that:

 

(a)           such Guarantee has been duly executed and
authorized; and

 

79

 

(b)           such Guarantee constitutes a valid, binding
and enforceable obligation of such Restricted Subsidiary, except insofar as
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
(including, without limitation, all laws relating to fraudulent transfers) and
except insofar as enforcement thereof is subject to general principles of
equity;

 

provided that
this Section 4.15 shall not be applicable to any guarantee of any
Restricted Subsidiary that existed at the time such Person became a Restricted
Subsidiary and was not incurred in connection with, or in contemplation of,
such Person becoming a Restricted Subsidiary.

 

Section 4.16           Limitation on Layering.

 

Notwithstanding anything to the contrary, the Issuer
shall not, and shall not permit any Guarantor to, directly or indirectly, incur
any Indebtedness (including Acquired Indebtedness) that is subordinate in right
of payment to any Senior Indebtedness of the Issuer or such Guarantor, as the
case may be, unless such Indebtedness is either:

 

(a)           equal in right of payment with the Notes or
such Guarantor’s Guarantee of the Notes, as the case may be; or

 

(b)           expressly subordinated in right of payment to
the Notes or such Guarantor’s Guarantee of the Notes, as the case may be.

 

For the purposes of this Indenture, Indebtedness
that is unsecured is not deemed to be subordinated or junior to Secured
Indebtedness merely because it is unsecured, and Senior Indebtedness is not
deemed to be subordinated or junior to any other Senior Indebtedness merely
because it has a junior priority with respect to the same collateral.

 

ARTICLE 5

SUCCESSORS

 

Section 5.01           Merger, Consolidation or Sale of All or
Substantially All Assets.

 

(a)           The Issuer shall not consolidate or merge
with or into or wind up into (whether or not the Issuer is the surviving
corporation), or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets, in one or more related
transactions, to any Person unless:

 

(1)           the Issuer is the surviving corporation or
the Person formed by or surviving any such consolidation or merger (if other
than the Issuer) or to which such sale, assignment, transfer, lease, conveyance
or other disposition will have been made is a corporation organized or existing
under the laws of the jurisdiction of organization of the Issuer or the laws of
the United States, any state thereof, the District of Columbia, or any
territory thereof (such Person, as the case may be, being herein called the “Successor
Company”);

 

(2)           the Successor Company, if other than the
Issuer, expressly assumes all the obligations of the Issuer under the Notes
pursuant to supplemental indentures or other documents or instruments in form
reasonably satisfactory to the Trustee;

 

80

 

(3)           immediately after such transaction, no
Default exists;

 

(4)           immediately after giving pro forma effect to such transaction and
any related financing transactions, as if such transactions had occurred at the
beginning of the applicable four-quarter period,

 

(A)          the Successor Company would be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09(a) hereof, or

 

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

 

(5)           each Guarantor, unless it is the other party
to the transactions described above, in which case Section 5.01(c)(1)(B) hereof
shall apply, shall have by supplemental indenture confirmed that its Guarantee
shall apply to such Person’s obligations under this Indenture, the Notes and
the Registration Rights Agreement; and

 

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

 

(b)           The Successor Company shall succeed to, and
be substituted for the Issuer, as the case may be, under this Indenture, the
Guarantees and the Notes, as applicable. 
Notwithstanding clauses (3) and (4) of Section 5.01(a) hereof,

 

(x)            any Restricted Subsidiary may consolidate
with or merge into or transfer all or part of its properties and assets to the
Issuer, and

 

(y)           the Issuer may merge with an Affiliate of the
Issuer, as the case may be, solely for the purpose of reincorporating the
Issuer in a State of the United States so long as the amount of Indebtedness of
the Issuer and its Restricted Subsidiaries is not increased thereby.

 

(c)           Subject to certain limitations described in
this Indenture governing release of a Guarantee upon the sale, disposition or
transfer of a guarantor, no Guarantor shall, and the Issuer shall not permit
any Guarantor to, consolidate or merge with or into or wind up into (whether or
not the Issuer or Guarantor is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets, in one or more related transactions, to any Person
unless:

 

(1)           (A) such Guarantor is the surviving
corporation or the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) or to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been made is a
corporation organized or existing under the laws of the jurisdiction of
organization of such Guarantor, as the case may be, or the laws of the United
States, any state thereof, the District of Columbia, or any territory thereof
(such Guarantor or such Person, as the case may be, being herein called the “Successor
Person”);

 

81

 

(B)           the Successor Person, if other than such
Guarantor, expressly assumes all the obligations of such Guarantor under this
Indenture and such Guarantor’s related Guarantee pursuant to supplemental
indentures or other documents or instruments in form reasonably satisfactory to
the Trustee;

 

(C)           immediately after such transaction, no
Default exists; and

 

(D)          the Issuer shall have delivered to the
Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indentures, if
any, comply with this Indenture; or

 

(2)           the transaction is made in compliance with Section 4.10
hereof.

 

(d)           Subject to certain limitations described in
this Indenture, the Successor Person shall succeed to, and be substituted for,
such Guarantor under this Indenture and such Guarantor’s Guarantee.  Notwithstanding the foregoing, any Guarantor
may merge into or transfer all or part of its properties and assets to another
Guarantor or the Issuer.

 

(e)           Notwithstanding anything to the contrary, the
mergers contemplated by the Transaction Agreement shall be permitted without
compliance with this Section 5.01.

 

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 Issuer in accordance with Section 5.01
hereof, the successor corporation formed by such consolidation or into or with
which the Issuer is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted
for (so that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of this Indenture referring to
the Issuer shall refer instead to the successor corporation and not to the
Issuer), and may exercise every right and power of the Issuer under this
Indenture with the same effect as if such successor Person had been named as
the Issuer herein; provided that the predecessor Issuer shall not be
relieved from the obligation to pay the principal of and interest and
Additional Interest, if any, on the Notes except in the case of a sale,
assignment, transfer, conveyance or other disposition of all of the Issuer’s
assets that meets the requirements of Section 5.01 hereof.

 

ARTICLE 6

DEFAULTS AND REMEDIES

 

Section 6.01           Events of Default.

 

(a)           An “Event of Default” wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):

 

82

 

(1)           default in payment when due and payable, upon
redemption, acceleration or otherwise, of principal of, or premium, if any, on
the Notes (whether or not prohibited by the subordination provisions of this
Indenture);

 

(2)           default for 30 days or more in the payment
when due of interest or Additional Interest on or with respect to the Notes
(whether or not prohibited by the subordination provisions of this Indenture);

 

(3)           failure by the Issuer or any Guarantor for 60
days after receipt of written notice given by the Trustee or the Holders of not
less 30% in principal amount of the Notes to comply with any of its
obligations, covenants or agreements (other than a default referred to in
clauses (1) and (2) above) contained in this Indenture or the
Notes;

 

(4)           default under any mortgage, indenture or
instrument under which there is issued or by which there is secured or
evidenced any Indebtedness for money borrowed by the Issuer or any of its
Restricted Subsidiaries or the payment of which is guaranteed by the Issuer or
any of its Restricted Subsidiaries, other than Indebtedness owed to the Issuer
or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists
or is created after the issuance of the Notes, if both:

 

(a)           such default either results from the failure
to pay any principal of such Indebtedness at its stated final maturity (after
giving effect to any applicable grace periods) or relates to an obligation
other than the obligation to pay principal of any such Indebtedness at its
stated final maturity and results in the holder or holders of such Indebtedness
causing such Indebtedness to become due prior to its stated maturity; and

 

(b)           the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in default
for failure to pay principal at stated final maturity (after giving effect to
any applicable grace periods), or the maturity of which has been so
accelerated, aggregate $20.0 million or more at any one time outstanding;

 

(5)           failure by the Issuer or any Significant
Subsidiary to pay final judgments aggregating in excess of $20.0 million,
which final judgments remain unpaid, undischarged and unstayed for a period of
more than 60 days after such judgment becomes final, and in the event such
judgment is covered by insurance, an enforcement proceeding has been commenced
by any creditor upon such judgment or decree which is not promptly stayed;

 

(6)           the Issuer or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary,
pursuant to or within the meaning of any Bankruptcy Law:

 

(i)            commences proceedings to be adjudicated
bankrupt or insolvent;

 

(ii)           consents to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under applicable Bankruptcy law;

 

(iii)          consents to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or other similar official of it or
for all or substantially all of its property;

 

83

 

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

 

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

 

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

 

(i)            is for relief against the Issuer or any of
its Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary, in a proceeding in which the Issuer or any such Restricted
Subsidiaries, that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary,
is to be adjudicated bankrupt or insolvent;

 

(ii)           appoints a receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Issuer or any of its
Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary, or for all or substantially all of the property of the Issuer or
any of its Restricted Subsidiaries that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary; or

 

(iii)          orders the liquidation of the Issuer or any
of its Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary;

 

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

 

(8)           the Guarantee of any Significant Subsidiary
shall for any reason cease to be in full force and effect or be declared null
and void or any responsible officer of any Guarantor that is a Significant
Subsidiary, as the case may be, denies that it has any further liability under
its Guarantee or gives notice to such effect, other than by reason of the
termination of this Indenture or the release of any such Guarantee in
accordance with this Indenture.

 

(b)           In the event of any Event of Default
specified in clause (4) of Section 6.01(a) hereof, such Event of
Default and all consequences thereof (excluding any resulting payment default,
other than as a result of acceleration of the Notes) shall be annulled, waived
and rescinded, automatically and without any action by the Trustee or the Holders,
if within 20 days after such Event of Default arose:

 

(1)           the Indebtedness or guarantee that is the
basis for such Event of Default has been discharged; or

 

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

 

(3)           the default that is the basis for such Event
of Default has been cured.

 

84

 

Section 6.02           Acceleration.

 

(a)           If any Event of Default (other than an Event
of Default specified in clause (6) or (7) of Section 6.01(a) hereof)
occurs and is continuing under this Indenture, the Trustee or the Holders of at
least 30% in principal amount of the then total outstanding Notes may declare
the principal, premium, if any, interest and any other monetary obligations on
all the then outstanding Notes to be due and payable immediately; provided,
however, that so long as any Indebtedness permitted to be incurred under
this Indenture as part of the Senior Credit Facilities shall be outstanding, no
such acceleration shall be effective until the earlier of:

 

(1) acceleration of any
such Indebtedness under the Senior Credit Facilities; or

 

(2) five Business Days
after the giving of written notice of such acceleration to the Issuer and the
administrative agent under the Senior Credit Facilities.

 

Upon the effectiveness of such declaration, such
principal and interest shall be due and payable immediately.  The Trustee shall have no obligation to
accelerate the Notes if and so long as a committee of its Responsible Officers
in good faith determines acceleration is not in the best interest of the
Holders of the Notes.

 

Notwithstanding the foregoing, in the case of an
Event of Default arising under clause (6) or (7) of Section 6.01(a) hereof,
all outstanding Notes shall be due and payable immediately without further
action or notice.

 

The Holders of a majority in aggregate principal
amount of the then outstanding Notes by written notice to the Trustee may on
behalf of all of the Holders rescind an acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal, interest,
Additional Interest, if any, or premium that has become due solely because of
the acceleration) have been cured or waived.

 

(b)           Notwithstanding the preceding paragraph, in
the event of a declaration of acceleration in respect of the Notes because of
an Event of Default specified in Section 6.01(a)(4) shall have
occurred and be continuing, such declaration of acceleration shall be
automatically annulled if the Indebtedness that is the subject of such Event of
Default has been discharged or the Holders thereof have rescinded their
declaration of acceleration in respect of such Indebtedness, and written notice
of such discharge or rescission, as the case may be, shall have been given to
the Trustee by the Issuer and countersigned by the Holders of such Indebtedness
or a trustee, fiduciary or agent for such Holders, within 30 days after such
declaration of acceleration in respect of the Notes, and no other Event of
Default has occurred during such 30-day period which has not been cured or
waived during such period.

 

Section 6.03           Other Remedies.

 

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

 

The Trustee may maintain a proceeding even if it
does not possess any of the Notes or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee or any Holder of a Note in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or

 

85

 

remedy
or constitute a waiver of or acquiescence in the Event of Default.  All remedies are cumulative to the extent
permitted by law.

 

Section 6.04           Waiver of Past Defaults.

 

Holders of not less than a majority in aggregate
principal amount of the then outstanding Notes by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default and its
consequences hereunder, except a continuing Default in the payment of the principal
of, premium, if any, Additional Interest, if any, or interest on, any Note held
by a non-consenting Holder (including in connection with an Asset Sale Offer or
a Change of Control Offer); provided, subject to Section 6.02
hereof, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such
acceleration.  Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.

 

Section 6.05           Control by Majority.

 

Holders of a majority in principal amount of the
then total outstanding Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee.  The Trustee, however, may refuse to follow
any direction that conflicts with law or this Indenture or that the Trustee
determines is unduly prejudicial to the rights of any other Holder of a Note or
that would involve the Trustee in personal liability.

 

Section 6.06           Limitation on Suits.

 

Subject to Section 6.07 hereof, no Holder of a
Note may pursue any remedy with respect to this Indenture or the Notes unless:

 

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

 

(2)           Holders of at least 30% in principal amount
of the total outstanding Notes have requested the Trustee to pursue the remedy;

 

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

 

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

 

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

 

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

 

86

 

Section 6.07           Rights of Holders of Notes to Receive Payment.

 

Notwithstanding any other provision of this
Indenture, the right of any Holder of a Note to receive payment of principal,
premium, if any, and Additional Interest, if any, and interest on the Note, on
or after the respective due dates expressed in the Note (including in
connection with an Asset Sale Offer or a Change of Control Offer), or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.

 

Section 6.08           Collection Suit by Trustee.

 

If an Event of Default specified in Section 6.01(a)(1) or
(2) hereof occurs and is continuing, the Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against the Issuer
for the whole amount of principal of, premium, if any, and Additional Interest,
if any, and interest remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

 

Section 6.09           Restoration of Rights and Remedies.

 

If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceedings, the Issuer, the Trustee
and the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding has been instituted.

 

Section 6.10           Rights and Remedies Cumulative.

 

Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.07
hereof, no right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. 
The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.

 

Section 6.11           Delay or Omission Not Waiver.

 

No delay or omission of the Trustee or of any Holder
of any Note to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. 
Every right and remedy given by this Article or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

Section 6.12           Trustee May File Proofs of Claim.

 

The Trustee is authorized to file such proofs of
claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the

 

87

 

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

 

Section 6.13           Priorities.

 

If the Trustee collects any money pursuant to this Article 6,
it shall pay out the money in the following order:

 

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

 

(ii)           to holders of Senior Indebtedness of the
Issuer and, if such money or property has been collected from a Guarantor, to
holders of Senior Indebtedness of such Guarantor, in each case to the extent
required by Article 10 and/or Article 12 hereof, as applicable

 

(iii)          to Holders of Notes for amounts due and
unpaid on the Notes for principal, premium, if any, and Additional Interest, if
any, and interest, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal, premium, if any, and
Additional Interest, if any, and interest, respectively; and

 

(iv)          to the Issuer or to such party as a court of
competent jurisdiction shall direct including a Guarantor, if applicable.

 

The Trustee may fix a record date and payment date
for any payment to Holders of Notes pursuant to this Section 6.13.

 

Section 6.14           Undertaking for Costs.

 

In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as a Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its

 

88

 

discretion
may assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant.  This Section 6.14 does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.

 

ARTICLE 7

TRUSTEE

 

Section 7.01           Duties of Trustee.

 

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

 

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

 

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

 

(ii)           in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture.  However, in the case of any
such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.

 

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

 

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

 

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

 

(iii)          the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.

 

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

 

(e)           The Trustee shall be under no obligation to
exercise any of its rights or powers under this Indenture at the request or
direction of any of the Holders of the Notes unless the Holders have offered to
the Trustee reasonable indemnity or security against any loss, liability or
expense.

 

89

 

(f)            The Trustee shall not be liable for interest
on any money received by it except as the Trustee may agree in writing with the
Issuer.  Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.

 

Section 7.02           Rights of Trustee.

 

(a)           The Trustee may conclusively rely upon any
document believed by it to be genuine and to have been signed or presented by
the proper Person.  The Trustee need not
investigate any fact or matter stated in the document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Issuer, personally or by agent or attorney at the
sole cost of the Issuer and shall incur no liability or additional liability of
any kind by reason of such inquiry or investigation.

 

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

 

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

 

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

 

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

 

(f)            None of the provisions of this Indenture
shall require the Trustee to expend or risk its own funds or otherwise to incur
any liability, financial or otherwise, in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not assured to it.

 

(g)           The Trustee shall not be deemed to have
notice of any Default or Event of Default unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event
which is in fact such a Default is received by the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Notes and this
Indenture

 

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

 

(i)            The rights, privileges, protections,
immunities and benefits given to the Trustee, including, without limitation,
its right to be indemnified, are extended to, and shall be enforceable by, the

 

90

 

Trustee
in each of its capacities hereunder, and each agent, custodian and other Person
employed to act hereunder.

 

(j)            In the event the Issuer is required to pay
Additional Interest, the Issuer will provide written notice to the Trustee of
the Issuer’s obligation to pay Additional Interest no later than 15 days prior
to the next Interest Payment Date, which notice shall set forth the amount of
the Additional Interest to be paid by the Issuer.  The Trustee shall not at any time be under any
duty or responsibility to any Holders to determine whether the Additional
Interest is payable and the amount thereof.

 

Section 7.03           Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with the Issuer
or any Affiliate of the Issuer with the same rights it would have if it were
not Trustee.  However, in the event that
the Trustee acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue as trustee or
resign.  Any Agent may do the same with
like rights and duties.  The Trustee is
also subject to Sections 7.10 and 7.11 hereof.

 

Section 7.04           Trustee’s Disclaimer.

 

The Trustee shall not be responsible for and makes
no representation as to the validity or adequacy of this Indenture or the
Notes, it shall not be accountable for the Issuer’s use of the proceeds from
the Notes or any money paid to the Issuer or upon the Issuer’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 occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default within 90 days after it occurs. 
Except in the case of a Default relating to the payment of principal,
premium, if any, or interest on any Note, the Trustee may withhold from the
Holders notice of any continuing Default if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes. 
The Trustee shall not be deemed to know of any Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is such a Default is received by the Trustee
at the Corporate Trust Office of the Trustee.

 

Section 7.06           Reports by Trustee to Holders of the Notes.

 

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

 

91

 

A copy of each report at the time of its mailing to
the Holders of Notes shall be mailed to the Issuer and filed with the SEC and
each stock exchange on which the Notes are listed in accordance with Trust
Indenture Act Section 313(d).  The
Issuer shall promptly notify the Trustee when the Notes are listed on any stock
exchange.

 

Section 7.07           Compensation and Indemnity.

 

The Issuer shall pay to the Trustee from time to
time such compensation for its acceptance of this Indenture and services
hereunder as the parties shall agree in writing from time to time.  The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust.  The Issuer shall reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and expenses
incurred or made by it in addition to the compensation for its services.  Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

The Issuer and the Guarantors, jointly and
severally, shall indemnify the Trustee for, and hold the Trustee harmless
against, any and all loss, damage, claims, liability or expense (including
attorneys’ fees) incurred by it in connection with the acceptance or
administration of this trust and the performance of its duties hereunder
(including the costs and expenses of enforcing this Indenture against the
Issuer or any of the Guarantors (including this Section 7.07) or defending
itself against any claim whether asserted by any Holder, the Issuer or any
Guarantor, or liability in connective with the acceptance, exercise or
performance of any of its powers or duties hereunder).  The Trustee shall notify the Issuer promptly
of any claim for which it may seek indemnity. 
Failure by the Trustee to so notify the Issuer shall not relieve the
Issuer of its obligations hereunder.  The
Issuer shall defend the claim and the Trustee may have separate counsel and the
Issuer shall pay the fees and expenses of such counsel.  The Issuer need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee
through the Trustee’s own willful misconduct, negligence or bad faith.

 

The obligations of the Issuer under this Section 7.07
shall survive the satisfaction and discharge of this Indenture or the earlier
resignation or removal of the Trustee.

 

To secure the payment obligations of the Issuer and
the Guarantors in this Section 7.07, the Trustee shall have a Lien prior
to the Notes on all money or property held or collected by the Trustee, except
that held in trust to pay principal and interest on particular Notes.  Such Lien shall survive the satisfaction and
discharge of this Indenture.

 

When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(a)(6) or (7) hereof
occurs, the expenses and the compensation for the services (including the fees
and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.

 

The Trustee shall comply with the provisions of
Trust Indenture Act Section 313(b)(2) to the extent applicable.

 

Section 7.08           Replacement of Trustee.

 

A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section 7.08.  The Trustee may resign in writing at any time
and be discharged from the trust hereby created by so notifying the
Issuer.  The Holders of a majority in
principal amount of the then outstanding Notes may

 

92

 

remove
the Trustee by so notifying the Trustee and the Issuer in writing.  The Issuer may remove the Trustee if:

 

(a)           the Trustee fails to comply with Section 7.10
hereof;

 

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

 

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

 

(d)           the Trustee becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Issuer 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 Issuer.

 

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

 

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

 

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

 

Section 7.09           Successor Trustee by Merger, etc.

 

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

 

Section 7.10           Eligibility; Disqualification.

 

There shall at all times be a Trustee hereunder that
is a corporation organized and doing business under the laws of the United
States of America or of any state thereof that is authorized under such laws to
exercise corporate trustee power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report of
condition.

 

93

 

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

 

Section 7.11           Preferential Collection of Claims Against
Issuer.

 

The Trustee is subject to Trust Indenture Act Section 311(a),
excluding any creditor relationship listed in Trust Indenture Act Section 311(b).  A Trustee who has resigned or been removed
shall be subject to Trust Indenture Act Section 311(a) to the extent
indicated therein.

 

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.01           Option to Effect Legal Defeasance or Covenant
Defeasance.

 

The Issuer may, at its option and at any time, elect
to have either Section 8.02 or 8.03 hereof applied to all outstanding Notes
upon compliance with the conditions set forth below in this Article 8.

 

Section 8.02           Legal Defeasance and Discharge.

 

Upon the Issuer’s exercise under Section 8.01
hereof of the option applicable to this Section 8.02, the Issuer and the
Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from their obligations with respect
to all outstanding Notes and Guarantees on the date the conditions set forth
below are satisfied (“Legal Defeasance”).  For this purpose, Legal Defeasance means that
the Issuer shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding”
only for the purposes of Section 8.05 hereof and the other Sections of
this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture
including that of the Guarantors (and the Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder:

 

(a)           the rights of Holders of Notes to receive
payments in respect of the principal of, premium, if any, and interest on the
Notes when such payments are due solely out of the trust created pursuant to
this Indenture referred to in Section 8.04 hereof;

 

(b)           the Issuer’s obligations with respect to
Notes concerning issuing temporary Notes, registration of such Notes,
mutilated, destroyed, lost or stolen Notes and the maintenance of an office or
agency for payment and money for security payments held in trust;

 

(c)           the rights, powers, trusts, duties and
immunities of the Trustee, and the Issuer’s obligations in connection
therewith; and

 

(d)           this Section 8.02.

 

Subject to compliance with this Article 8, the
Issuer may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 hereof.

 

94

 

Section 8.03           Covenant Defeasance.

 

Upon the Issuer’s exercise under Section 8.01
hereof of the option applicable to this Section 8.03, the Issuer and the
Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from their obligations under the covenants contained in
Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15
and 4.16 hereof and clauses (4) and (5) of Section 5.01(a),
Sections 5.01(c) and 5.01(d) hereof with respect to the outstanding
Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied (“Covenant Defeasance”), and the Notes shall
thereafter be deemed not “outstanding” for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). 
For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Issuer may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and
such Notes shall be unaffected thereby. 
In addition, upon the Issuer’s exercise under Section 8.01 hereof
of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(3), 6.01(4), 6.01(5), 6.01(6) (solely with respect to Restricted
Subsidiaries that are Significant Subsidiaries), 6.01(7) (solely with
respect to Restricted Subsidiaries that are Significant Subsidiaries) and 6.01(8) hereof
shall not constitute Events of Default.

 

Section 8.04           Conditions to Legal or Covenant Defeasance.

 

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

 

In order to exercise either Legal Defeasance or
Covenant Defeasance with respect to the Notes:

 

(1)           the Issuer must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S.
dollars, Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest due on the Notes on the stated maturity date or on the redemption
date, as the case may be, of such principal, premium, if any, or interest on
such Notes and the Issuer must specify whether such Notes are being defeased to
maturity or to a particular redemption date;

 

(2)           in the case of Legal Defeasance, the Issuer
shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable
to the Trustee confirming that, subject to customary assumptions and
exclusions,

 

(a)           the Issuer has received from, or there has
been published by, the United States Internal Revenue Service a ruling, or

 

(b)           since the issuance of the Notes, there has
been a change in the applicable U.S. federal income tax law,

 

95

 

in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, subject to
customary assumptions and exclusions, the Holders of the Notes will not
recognize income, gain or loss for U.S. federal income tax purposes, as
applicable, as a result of such Legal Defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;

 

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

 

(4)           no Default (other than that resulting from
borrowing funds to be applied to make such deposit and any similar and
simultaneous deposit relating to other Indebtedness, and in each case the
granting of Liens in connection therewith) shall have occurred and be
continuing on the date of such deposit;

 

(5)           such Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or constitute a default under the
Senior Credit Facilities or any other material agreement or instrument (other
than this Indenture) to which, the Issuer or any Guarantor is a party or by
which the Issuer or any Guarantor is bound (other than that resulting from any
borrowing of funds to be applied to make the deposit required to effect such
Legal Defeasance or Covenant Defeasance and any similar and simultaneous
deposit relating to other Indebtedness and the granting of Liens in connection
therewith);

 

(6)           the Issuer shall have delivered to the
Trustee an Opinion of Counsel to the effect that, as of the date of such
opinion and subject to customary assumptions and exclusions following the
deposit, the trust funds will not be subject to the effect of Section 547
of Title 11 of the United States Code;

 

(7)           the Issuer shall have delivered to the
Trustee an Officer’s Certificate stating that the deposit was not made by the
Issuer with the intent of defeating, hindering, delaying or defrauding any
creditors of the Issuer or any Guarantor or others; and

 

(8)           the Issuer shall have delivered to the
Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of
Counsel may be subject to customary assumptions and exclusions) each stating
that all conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance, as the case may be, have been complied with.

 

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

 

Subject to Section 8.06 hereof, all money and
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05,
the “Trustee”) pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Issuer or a
Guarantor acting

 

96

 

as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium and
Additional Interest, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.  Money and Government Securities so held in
trust are not subject to Article 10 or Article 12 hereof

 

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

 

Anything in this Article 8 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Issuer from time to
time upon the request of the Issuer any money or Government Securities held by
it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.04(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.06           Repayment to Issuer.

 

Any money deposited with the Trustee or any Paying
Agent, or then held by the Issuer, in trust for the payment of the principal
of, premium and Additional Interest, if any, or interest on any Note and
remaining unclaimed for two years after such principal, and premium and
Additional Interest, if any, or interest has become due and payable shall be
paid to the Issuer on its request or (if then held by the Issuer) shall be
discharged from such trust; and the Holder of such Note shall thereafter look
only to the Issuer for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Issuer as trustee thereof, shall thereupon cease.

 

Section 8.07           Reinstatement.

 

If the Trustee or Paying Agent is unable to apply
any United States dollars or Government Securities in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Issuer’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 hereof until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section 8.02
or 8.03 hereof, as the case may be; provided that, if the Issuer makes
any payment of principal of, premium and Additional Interest, if any, or
interest on any Note following the reinstatement of its obligations, the Issuer
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.

 

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01           Without Consent of Holders of Notes.

 

Notwithstanding Section 9.02 hereof, the
Issuer, any Guarantor (with respect to a Guarantee or this Indenture to which
it is a party) and the Trustee may amend or supplement this Indenture and any
Guarantee or Notes without the consent of any Holder:

 

97

 

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

 

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

 

(3)           to comply with Section 5.01 hereof;

 

(4)           to provide the assumption of the Issuer’s or
any Guarantor’s obligations to the Holders;

 

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

 

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

 

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

 

(8)           to evidence and provide for the acceptance
and appointment under this Indenture of a successor Trustee thereunder pursuant
to the requirements thereof;

 

(9)           to provide for the issuance of exchange notes
or private exchange notes, which are identical to exchange notes except that
they are not freely transferable;

 

(10)         to add a Guarantor under this Indenture;

 

(11)         to conform the text of this Indenture,
Guarantees or the Notes to any provision of the “Description of the Notes” section of
the Offering Circular to the extent that such provision in such “Description of
the Notes” section was intended to be a verbatim recitation of a provision
of this Indenture, Guarantee or Notes; or

 

(12)         making any amendment to the provisions of
this Indenture relating to the transfer and legending of Notes as permitted by
this Indenture, including, without limitation to facilitate the issuance and
administration of the Notes; provided, however, that (i) compliance
with this Indenture as so amended would not result in Notes being transferred
in violation of the Securities Act or any applicable securities law and (ii) such
amendment does not materially and adversely affect the rights of Holders to
transfer Notes.

 

Upon the request of the Issuer 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 the
documents described in Section 7.02 hereof, the Trustee shall join with
the Issuer and the Guarantors in the execution of any amended or supplemental
indenture authorized or permitted by the terms of this Indenture and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or
supplemental indenture that affects its own rights, duties or immunities under
this Indenture or otherwise. 
Notwithstanding the foregoing, no Opinion of Counsel shall be required
in connection with the addition of a Guarantor under this Indenture upon
execution and delivery by such Guarantor and the Trustee of a supplemental
indenture to this Indenture, the form of which is attached as Exhibit D
hereto, and delivery of an Officer’s Certificate.

 

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Section 9.02           With Consent of Holders of Notes.

 

Except as provided below in this Section 9.02,
the Issuer and the Trustee may amend or supplement this Indenture, the Notes
and the Guarantees with the consent of the Holders of at least a majority in
principal amount of the Notes (including Additional Notes, if any) then
outstanding voting as a single class (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium and Additional Interest, if any, or
interest on the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture,
the Guarantees or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including
Additional Notes, if any) voting as a single class (including consents obtained
in connection with a tender offer or exchange offer for, or purchase of, the
Notes).  Section 2.08 hereof and Section 2.09
hereof shall determine which Notes are considered to be “outstanding” for the
purposes of this Section 9.02.

 

Upon the request of the Issuer accompanied by a
resolution of its board of directors authorizing the execution of any such
amended or supplemental indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Issuer in the execution of such amended
or supplemental indenture unless such amended or supplemental indenture
directly affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental indenture.

 

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

 

After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Issuer shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Issuer to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental indenture or waiver.

 

Without the consent of each affected Holder of
Notes, an amendment or waiver under this Section 9.02 may not (with
respect to any Notes held by a non-consenting Holder):

 

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

 

(2)           reduce the principal of or change the fixed
final maturity of any such Note or alter or waive the provisions with respect
to the redemption of such Notes (other than provisions relating to Section 3.09,
Section 4.10 and Section 4.14 hereof to the extent that any such
amendment or waiver does not have the effect of reducing the principal of or
changing the fixed final maturity of any such Note or altering or waiving the
provisions with respect to the redemption of such Notes);

 

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

 

99

 

(4)           waive a Default in the payment of principal
of or premium, if any, or interest on the Notes, except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the Notes and a waiver of the payment default that resulted
from such acceleration, or in respect of a covenant or provision contained in
this Indenture or any Guarantee which cannot be amended or modified without the
consent of all Holders;

 

(5)           make any Note payable in money other than
that stated therein;

 

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

 

(7)           make any change in these amendment and waiver
provisions;

 

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

 

(9)           make any change in the subordination
provisions hereof that would adversely affect the Holders; or

 

(10)         except as expressly permitted by this
Indenture, modify the Guarantees of any Significant Subsidiary in any manner
adverse to the Holders of the Notes.

 

Section 9.03           Compliance with Trust Indenture Act.

 

Every amendment or supplement to this Indenture or
the Notes shall be set forth in an amended or supplemental indenture that
complies with the Trust Indenture Act as then in effect.

 

Section 9.04           Revocation and Effect of Consents.

 

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

 

The Issuer may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to consent to
any amendment, supplement, or waiver.  If
a record date is fixed, then, notwithstanding the preceding paragraph, those
Persons who were Holders at such record date (or their duly designated
proxies), and only such Persons, shall be entitled to consent to such
amendment, supplement, or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date.  No such consent shall be valid or effective
for more than 120 days after such record date unless the consent of the
requisite number of Holders has been obtained.

 

100

 

Section 9.05           Notation on or Exchange of Notes.

 

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

 

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

 

Section 9.06           Trustee to Sign Amendments, etc.

 

The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article 9 if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee.  The Issuer
may not sign an amendment, supplement or waiver until the board of directors
approves it.  In executing any amendment,
supplement or waiver, the Trustee shall be entitled to receive and (subject to Section 7.01
hereof) shall be fully protected in relying upon, in addition to the documents
required by Section 14.04 hereof, an Officer’s Certificate and an Opinion
of Counsel stating that the execution of such amended or supplemental indenture
is authorized or permitted by this Indenture and that such amendment,
supplement or waiver is the legal, valid and binding obligation of the Issuer
and any Guarantors party thereto, enforceable against them in accordance with
its terms, subject to customary exceptions, and complies with the provisions hereof
(including Section 9.03). 
Notwithstanding the foregoing, no Opinion of Counsel will be required
for the Trustee to execute any amendment or supplement adding a new Guarantor
under this Indenture.

 

Section 9.07           Payment for Consent.

 

Neither the Issuer nor any Affiliate of the Issuer
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to all
Holders and is paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.

 

ARTICLE 10

SUBORDINATION

 

Section 10.01         Agreement To Subordinate.

 

The Issuer agrees, and each Holder by accepting a
Note agrees, that the payment of all Obligations owing in respect of the Notes
is subordinated in right of payment, to the extent and in the manner provided
in this Article 10, to the prior payment in full of all existing and
future Senior Indebtedness of the Issuer and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness.  The Notes shall in all respects rank pari passu in right of payment with all
existing and future Senior Subordinated Indebtedness of the Issuer, and will be
senior in right of payment to all existing and future Subordinated Indebtedness
of the Issuer; and only Indebtedness of the Issuer that is Senior Indebtedness
shall rank senior to the Notes in accordance with the provisions set forth
herein.  All provisions of this Article 10
shall be subject to Section 10.12.

 

101

 

Section 10.02         Liquidation, Dissolution, Bankruptcy.

 

Upon any payment or distribution of the assets of
the Issuer to creditors upon a total or partial liquidation or a total or
partial dissolution of the Issuer or in a reorganization of or similar
proceeding relating to the Issuer or its property:

 

(i)            the holders of Senior Indebtedness of the
Issuer shall be entitled to receive payment in full in cash of such Senior
Indebtedness before Holders shall be entitled to receive any payment; and

 

(ii)           until the Senior Indebtedness of the Issuer
is paid in full in cash, any payment or distribution to which Holders would be
entitled but for the subordination provisions of this Indenture shall be made
to holders of such Senior Indebtedness as their interests may appear, except
that Holders may receive Permitted Junior Securities.

 

Section 10.03         Default on Senior Indebtedness of the Issuer.

 

The Issuer shall not pay principal of, premium, if
any, or interest on the Notes (or pay any other Obligations relating to the
Notes, including Additional Interest, fees, costs, expenses, indemnities and
rescission or damage claims) or make any deposit pursuant to Article 8 or Article 13
hereof and may not purchase, redeem or otherwise retire any Notes
(collectively, “pay the Notes”) (except in the form of Permitted Junior
Securities) if either of the following occurs (a “Payment Default”):

 

(i)            any Obligation on any Designated Senior
Indebtedness of the Issuer is not paid in full in cash when due (after giving
effect to any applicable grace period); or

 

(ii)           any other default on Designated Senior
Indebtedness of the Issuer occurs and the maturity of such Designated Senior
Indebtedness is accelerated in accordance with its terms;

 

unless, in either case, the Payment Default has been
cured or waived and any such acceleration has been rescinded or such Designated
Senior Indebtedness has been paid in full in cash; provided, however,
that the Issuer shall be entitled to pay the Notes without regard to the
foregoing if the Issuer and the Trustee receive written notice approving such
payment from the Representatives of all Designated Senior Indebtedness with
respect to which the Payment Default has occurred and is continuing.

 

During the continuance of any default (other than a
Payment Default) (a “Non-Payment Default”) with respect to any
Designated Senior Indebtedness of the Issuer pursuant to which the maturity
thereof may be accelerated without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Issuer shall not pay the Notes (except in the form of Permitted
Junior Securities) for a period (a “Payment Blockage Period”) commencing
upon the receipt by the Trustee (with a copy to the Issuer) of written notice
(a “Blockage Notice”) of such Non-Payment Default from the
Representative of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter.  So long as there shall remain outstanding any
Senior Indebtedness under the Senior Credit Facilities, a Blockage Notice may
be given only by the administrative agent thereunder unless otherwise agreed to
in writing by the requisite lenders named therein.  The Payment Blockage Period shall end earlier
if such Payment Blockage Period is terminated (i) by written notice to the
Trustee and the Issuer from the Person or Persons who gave such Blockage
Notice; (ii) because the default giving rise to such Blockage Notice is
cured, waived or otherwise

 

102

 

no
longer continuing; or (iii) because such Designated Senior Indebtedness
has been discharged or repaid in full in cash.

 

Notwithstanding the provisions described in the
immediately preceding two sentences (but subject to the provisions contained in
the first sentence of this Section 10.03 and Section 10.02 hereof),
unless the holders of such Designated Senior Indebtedness or the Representative
of such Designated Senior Indebtedness shall have accelerated the maturity of such
Designated Senior Indebtedness or a Payment Default has occurred and is
continuing, the Issuer shall be entitled to resume paying the Notes after the
end of such Payment Blockage Period.  The
Notes shall not be subject to more than one Payment Blockage Period in any
consecutive 360-day period irrespective of the number of defaults with respect
to Designated Senior Indebtedness of the Issuer during such period; provided
that if any Blockage Notice is delivered to the Trustee by or on behalf of the
holders of Designated Senior Indebtedness of the Issuer (other than the holders
of Indebtedness under the Senior Credit Facilities), a Representative of
holders of Indebtedness under the Senior Credit Facilities may give another
Blockage Notice within such period. 
However, in no event shall the total number of days during which any
Payment Blockage Period or Periods on the Notes is in effect exceed 179 days in
the aggregate during any consecutive 360-day period, and there must be at least
181 days during any consecutive 360-day period during which no Payment Blockage
Period is in effect.  Notwithstanding the
foregoing, however, no default that existed or was continuing on the date of
delivery of any Blockage Notice to the Trustee shall be, or be made, the basis for
a subsequent Blockage Notice unless such default shall have been waived for a
period of not less than 90 days (it being acknowledged that any subsequent
action, or any breach of any financial covenants during the period after the
date of delivery of a Blockage Notice, that, in either case, would give rise to
a Non-Payment Default pursuant to any provisions under which a Non-Payment
Default previously existed or was continuing shall constitute a new Non-Payment
Default for this purpose).

 

Section 10.04         Acceleration of Payment of Notes.

 

If payment of the Notes is accelerated because of an
Event of Default, the Issuer shall promptly notify the holders of the
Designated Senior Indebtedness of the Issuer or the Representative of such
Designated Senior Indebtedness of the acceleration; provided that any
failure to give such notice shall have no effect whatsoever on the provisions
of this Article 10.  If any
Designated Senior Indebtedness of the Issuer is outstanding, the Issuer may not
pay the Notes until five Business Days after the Representatives of all the
issuers of such Designated Senior Indebtedness receive notice of such
acceleration and, thereafter, may pay the Notes only if this Indenture
otherwise permits payment at that time.

 

Section 10.05         When Distribution Must Be Paid Over.

 

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

 

Section 10.06         Subrogation.

 

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

 

103

 

Section 10.07         Relative Rights.

 

This Article 10 defines the relative rights of
Holders and holders of Senior Indebtedness of the Issuer.  Nothing in this Indenture shall:

 

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

 

(ii)           prevent the Trustee or any Holder from
exercising its available remedies upon a Default, subject to the rights of
holders of Senior Indebtedness of the Issuer to receive payments or
distributions otherwise payable to Holders and such other rights of such
holders of Senior Indebtedness as set forth herein; or

 

(iii)          affect the relative rights of Holders and
creditors of the Issuer other than their rights in relation to holders of
Senior Indebtedness.

 

Section 10.08         Subordination May Not Be Impaired by
Issuer.

 

No right of any holder of Senior Indebtedness of the
Issuer to enforce the subordination of the Indebtedness evidenced by the Notes
shall be impaired by any act or failure to act by the Issuer or by its failure
to comply with this Indenture.

 

Section 10.09         Rights of Trustee and Paying Agent.

 

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

 

The Trustee in its individual or any other capacity
shall be entitled to hold Senior Indebtedness of the Issuer with the same
rights it would have if it were not Trustee. 
The Registrar and the Paying Agent shall be entitled to do the same with
like rights.  The Trustee shall be
entitled to all the rights set forth in this Article 10 with respect to
any Senior Indebtedness of the Issuer which may at any time be held by it, to
the same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such
holder.  Nothing in this Article 10
shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof or any other Section of this Indenture.

 

Section 10.10         Distribution or Notice to Representative.

 

Whenever a distribution is to be made or a notice
given to holders of Senior Indebtedness of the Issuer, the distribution may be
made and the notice given to their Representative (if any).

 

104

 

Section 10.11         Article 10 Not To Prevent Events of
Default or Limit Right To Accelerate.

 

The failure to make a payment pursuant to the Notes
by reason of any provision in this Article 10 shall not be construed as
preventing the occurrence of a Default. 
Nothing in this Article 10 shall have any effect on the right of
the Holders or the Trustee to accelerate the maturity of the Notes.

 

Section 10.12         Trust Moneys Not Subordinated.

 

Notwithstanding anything contained herein to the
contrary, payments from money or the proceeds of Government Securities
held in trust by the Trustee for the payment of principal of and interest on
the Notes pursuant to Article 8 or Article 13 hereof shall not be
subordinated to the prior payment of any Senior Indebtedness of the Issuer or
subject to the restrictions set forth in this Article 10, and none of the
Holders shall be obligated to pay over any such amount to the Issuer or any
holder of Senior Indebtedness of the Issuer or any other creditor of the
Issuer, provided that the subordination provisions of this Article 10
were not violated at the time the applicable amounts were deposited in trust
pursuant to Article 8 or Article 13 hereof, as the case may be.

 

Section 10.13         Trustee Entitled To Rely.

 

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

 

Section 10.14         Trustee To Effectuate Subordination.

 

A Holder by its acceptance of a Note agrees to be
bound by this Article 10 and authorizes and expressly directs the Trustee,
on his behalf, to take such action as may be necessary or appropriate to
effectuate the subordination between the Holders and the holders of Senior
Indebtedness of the Issuer as provided in this Article 10 and appoints the
Trustee as attorney-in-fact for any and all such purposes.

 

Section 10.15         Trustee Not Fiduciary for Holders of
Senior Indebtedness of the Issuer.

 

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

 

105

 

Section 10.16         Reliance by Holders of Senior Indebtedness of
the Issuer on Subordination Provisions.

 

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

 

Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness of the Issuer may, at
any time and from time to time, without the consent of or notice to the Trustee
or the Holders, without incurring responsibility to the Trustee or the Holders
and without impairing or releasing the subordination provided in this Article 10
or the obligations hereunder of the Holders to the holders of the Senior
Indebtedness of the Issuer, do any one or more of the following:  (i) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, Senior Indebtedness of the Issuer, or otherwise amend or
supplement in any manner Senior Indebtedness of the Issuer, or any instrument
evidencing the same or any agreement under which Senior Indebtedness of the
Issuer is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness of
the Issuer; (iii) release any Person liable in any manner for the payment
or collection of Senior Indebtedness of the Issuer; and (iv) exercise or
refrain from exercising any rights against the Issuer and any other Person.

 

ARTICLE 11

GUARANTEES

 

Section 11.01         Guarantee.

 

Subject to this Article 11, each of the
Guarantors hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Issuer hereunder or
thereunder, that: (a) the principal of, interest, premium and Additional
Interest, if any, on the Notes shall be promptly paid in full when due, whether
at maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Notes, if any, if lawful, and all
other obligations of the Issuer to the Holders or the Trustee hereunder or thereunder
shall be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.  Failing payment when due of
any amount so guaranteed or any performance so guaranteed for whatever reason,
the Guarantors shall be jointly and severally obligated to pay the same
immediately.  Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.

 

The Guarantors hereby agree that their obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Issuer, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a

 

106

 

guarantor.  Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Issuer, any right to require a proceeding first
against the Issuer, protest, notice and all demands whatsoever and covenants that
this Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture.

 

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

 

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

 

Each Guarantor agrees that it shall not be entitled
to any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.  Each Guarantor
further agrees that, as between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for
the purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Guarantee. 
The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Guarantees.

 

Each Guarantee shall remain in full force and effect
and continue to be effective should any petition be filed by or against the
Issuer for liquidation, reorganization, should the Issuer become insolvent or
make an assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of the Issuer’s assets, and shall,
to the fullest extent permitted by law, continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Notes are, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee on the Notes or Guarantees,
whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as
though such payment or performance had not been made.  In the event that any payment or any part
thereof, is rescinded, reduced, restored or returned, the Notes shall, to the
fullest extent permitted by law, be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.

 

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

 

The Guarantee issued by any Guarantor shall be a
general unsecured senior subordinated obligation of such Guarantor and shall be
subordinated in right of payment to all existing and future Senior Indebtedness
of such Guarantor, if any.

 

Each payment to be made by a Guarantor in respect of
its Guarantee shall be made without set-off, counterclaim, reduction or
diminution of any kind or nature.

 

107

 

Section 11.02         Limitation on Guarantor Liability.

 

Each Guarantor, and by its acceptance of Notes, each
Holder, hereby confirms that it is the intention of all such parties that the
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Guarantee.  To
effectuate the foregoing intention, the Trustee, the Holders and the Guarantors
hereby irrevocably agree that the obligations of each Guarantor shall be
limited to the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that
are relevant under such laws and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under
this Article 11, result in the obligations of such Guarantor under its
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
applicable law.  Each Guarantor that
makes a payment under its Guarantee shall be entitled upon payment in full of
all guaranteed obligations under this Indenture to a contribution from each
other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on
the respective net assets of all the Guarantors at the time of such payment
determined in accordance with GAAP.

 

Section 11.03         Execution and Delivery.

 

To evidence its Guarantee set forth in Section 11.01
hereof, each Guarantor hereby agrees that this Indenture shall be executed on
behalf of such Guarantor by its President, one of its Vice Presidents or one of
its Assistant Vice Presidents.

 

Each Guarantor hereby agrees that its Guarantee set
forth in Section 11.01 hereof shall remain in full force and effect
notwithstanding the absence of the endorsement of any notation of such
Guarantee on the Notes.

 

If an Officer whose signature is on this Indenture
no longer holds that office at the time the Trustee authenticates the Note, the
Guarantee shall be valid nevertheless.

 

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

 

If required by Section 4.15 hereof, the Issuer
shall cause any newly created or acquired Restricted Subsidiary to comply with
the provisions of Section 4.15 hereof and this Article 11, to the
extent applicable.

 

Section 11.04         Subrogation.

 

Each Guarantor shall be subrogated to all rights of
Holders of Notes against the Issuer in respect of any amounts paid by any
Guarantor pursuant to the provisions of Section 11.01 hereof; provided
that, if an Event of Default has occurred and is continuing, no Guarantor shall
be entitled to enforce or receive any payments arising out of, or based upon,
such right of subrogation until all amounts then due and payable by the Issuer
under this Indenture or the Notes shall have been paid in full.

 

108

 

Section 11.05         Benefits Acknowledged.

 

Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
this Indenture and that the guarantee and waivers made by it pursuant to its
Guarantee are knowingly made in contemplation of such benefits.

 

Section 11.06         Release of Guarantees.

 

A Guarantee by a Guarantor shall be automatically
and unconditionally released and discharged, and no further action by such
Guarantor, the Issuer or the Trustee is required for the release of such
Guarantor’s Guarantee, upon:

 

(1)           (A)  any sale, exchange or transfer (by
merger or otherwise) of the Capital Stock of such Guarantor (including any
sale, exchange or transfer), after which the applicable Guarantor is no longer
a Restricted Subsidiary or all or substantially all the assets of such
Guarantor, which sale, exchange or transfer is made in compliance with the
applicable provisions of this Indenture;

 

(B)           the release or discharge of such Guarantor
from its guarantee of Indebtedness under the Senior Credit Facilities or the
guarantee that resulted in the obligation of such Guarantor to guarantee the
Notes, if such Guarantor would not then otherwise be required to guarantee the
Notes pursuant to the covenant described in Section 4.15 hereof (treating
any guarantees of such Guarantor that remain outstanding as incurred at least
30 days prior to such release or discharge);

 

(C)           the proper designation of any Restricted
Subsidiary that is a Guarantor as an Unrestricted Subsidiary; or

 

(D)          the Issuer exercising its Legal Defeasance
option or Covenant Defeasance option in accordance with Article 8 hereof
or the Issuer’s obligations under this Indenture being discharged in accordance
with the terms of this Indenture; and

 

(2)            such Guarantor delivering to the Trustee an
Officer’s Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for in this Indenture relating to such
transaction have been complied with.

 

ARTICLE 12

SUBORDINATION OF GUARANTEES

 

Section 12.01         Agreement To Subordinate.

 

Each Guarantor agrees, and each Holder by accepting
a Note agrees, that the obligations of such Guarantor under its Guarantee are
subordinated in right of payment, to the extent and in the manner provided in
this Article 12, to the prior payment in full of all existing and future
Senior Indebtedness of such Guarantor and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness.  A Guarantor’s obligations under its Guarantee
shall in all respects rank pari passu
in right of payment with all existing and future Senior Subordinated
Indebtedness of such Guarantor, and will be senior in right of payment to all
existing and future Subordinated Indebtedness of such Guarantor; and only
Indebtedness of such Guarantor that is Senior Indebtedness shall rank senior to
the obligations

 

109

 

of
such Guarantor under its Guarantee in accordance with the provisions set forth
herein.  All provisions of this Article 12
shall be subject to Section 12.12.

 

Section 12.02         Liquidation, Dissolution, Bankruptcy.

 

Upon any payment or distribution of the assets of a
Guarantor to creditors upon a total or partial liquidation or a total or
partial dissolution of such Guarantor or in a reorganization of or similar
proceeding relating to such Guarantor or its property:

 

(i)            the holders of Senior Indebtedness of such
Guarantor shall be entitled to receive payment in full in cash of such Senior
Indebtedness before Holders shall be entitled to receive any payment; and

 

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

 

Section 12.03         Default on Senior Indebtedness of a Guarantor.

 

A Guarantor shall not make any payment pursuant to
its Guarantee (or pay any other Obligations relating to its Guarantee,
including Additional Interest, fees, costs, expenses, indemnities and
rescission or damage claims) and may not purchase, redeem or otherwise retire
any Notes (collectively, “pay its Guarantee”) (except in the form of
Permitted Junior Securities) if either of the following occurs (a “Guarantor
Payment Default”):

 

(i)            any Obligation on any Designated Senior
Indebtedness of such Guarantor is not paid in full in cash when due (after
giving effect to any applicable grace period); or

 

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

 

unless, in either case, the Guarantor Payment
Default has been cured or waived and any such acceleration has been rescinded
or such Designated Senior Indebtedness has been paid in full in cash; provided,
however, that such Guarantor shall be entitled to pay its Guarantee
without regard to the foregoing if such Guarantor and the Trustee receive
written notice approving such payment from the Representatives of all
Designated Senior Indebtedness with respect to which the Guarantor Payment
Default has occurred and is continuing.

 

During the continuance of any default (other than a
Guarantor Payment Default) (a “Non-Guarantor Payment Default”) with
respect to any Designated Senior Indebtedness of a Guarantor pursuant to which
the maturity thereof may be accelerated without further notice (except such
notice as may be required to effect such acceleration) or the expiration of any
applicable grace periods, such Guarantor shall not pay its Guarantee (except in
the form of Permitted Junior Securities) for a period (a “Guarantee Payment
Blockage Period”) commencing upon the receipt by the Trustee (with a copy
to such Guarantor and the Issuer) of written notice (a “Guarantee Blockage
Notice”) of such Non-Guarantor Payment Default from the Representative of
such Designated Senior Indebtedness specifying an election to effect a
Guarantee Payment Blockage Period and ending 179 days thereafter.  So long as there shall remain

 

110

 

outstanding
any Senior Indebtedness under the Senior Credit Facilities, a Guarantee
Blockage Notice may be given only by the administrative agent thereunder unless
otherwise agreed to in writing by the requisite lenders named therein.  The Guarantee Payment Blockage Period shall
end earlier if such Guarantee Payment Blockage Period is terminated (i) by
written notice to the Trustee, the relevant Guarantor and the Issuer from the
Person or Persons who gave such Guarantee Blockage Notice; (ii) because
the default giving rise to such Guarantee Blockage Notice is cured, waived or
otherwise no longer continuing; or (iii) because such Designated Senior
Indebtedness has been discharged or repaid in full in cash.

 

Notwithstanding the provisions described in the
immediately preceding two sentences (but subject to the provisions contained in
the first sentence of this Section 12.03 and Section 12.02 hereof),
unless the holders of such Designated Senior Indebtedness or the Representative
of such Designated Senior Indebtedness shall have accelerated the maturity of
such Designated Senior Indebtedness or a Guarantor Payment Default has occurred
and is continuing, the relevant Guarantor shall be entitled to resume paying
its Guarantee after the end of such Guarantee Payment Blockage Period.  Each Guarantee shall not be subject to more
than one Guarantee Payment Blockage Period in any consecutive 360-day period
irrespective of the number of defaults with respect to Designated Senior
Indebtedness of the relevant Guarantor during such period; provided that
if any Guarantee Blockage Notice is delivered to the Trustee by or on behalf of
the holders of Designated Senior Indebtedness of such Guarantor (other than the
holders of Indebtedness under the Senior Credit Facilities), a Representative
of holders of Indebtedness under the Senior Credit Facilities may give another
Guarantee Blockage Notice within such period. 
However, in no event shall the total number of days during which any
Guarantee Payment Blockage Period or Periods on a Guarantee is in effect exceed
179 days in the aggregate during any consecutive 360-day period, and there must
be at least 181 days during any consecutive 360-day period during which no
Guarantee Payment Blockage Period is in effect. 
Notwithstanding the foregoing, however, no default that existed or was
continuing on the date of delivery of any Guarantee Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Guarantee Blockage
Notice unless such default shall have been waived for a period of not less than
90 days (it being acknowledged that any subsequent action, or any breach of any
financial covenants during the period after the date of delivery of a Guarantee
Blockage Notice, that, in either case, would give rise to a Non-Guarantor
Payment Default pursuant to any provisions under which a Non-Guarantor Payment
Default previously existed or was continuing shall constitute a new Non-Guarantor
Payment Default for this purpose).

 

Section 12.04         Demand for Payment.

 

If payment of the Notes is accelerated because of an
Event of Default and a demand for payment is made on a Guarantor pursuant to Article 11
hereof, the Issuer or such Guarantor shall promptly notify the holders of the
Designated Senior Indebtedness of such Guarantor or the Representative of such
Designated Senior Indebtedness of such demand; provided that any failure
to give such notice shall have no effect whatsoever on the provisions of this Article 12.  If any Designated Senior Indebtedness of a
Guarantor is outstanding, such Guarantor may not pay its Guarantee until five
Business Days after the Representatives of all the issuers of such Designated
Senior Indebtedness receive notice of such acceleration and, thereafter, may
pay its Guarantee only if this Indenture otherwise permits payment at that
time.

 

Section 12.05         When Distribution Must Be Paid Over.

 

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

 

111

 

Section 12.06         Subrogation.

 

After all Senior Indebtedness of a Guarantor is paid
in full and until the Notes are paid in full, Holders shall be subrogated to
the rights of holders of such Senior Indebtedness to receive distributions
applicable to such Senior Indebtedness. 
A distribution made under this Article 12 to holders of such Senior
Indebtedness which otherwise would have been made to Holders is not, as between
the relevant Guarantor and Holders, a payment by such Guarantor on such Senior
Indebtedness.

 

Section 12.07         Relative Rights.

 

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

 

(i)            impair, as between such Guarantor and
Holders, the obligation of such Guarantor, which is absolute and unconditional,
to make payments under its Guarantee in accordance with its terms;

 

(ii)           prevent the Trustee or any Holder from
exercising its available remedies upon a default by such Guarantor under its
obligations with respect to its Guarantee, subject to the rights of holders of
Senior Indebtedness of such Guarantor to receive payments or distributions
otherwise payable to Holders and such other rights of such holders of Senior
Indebtedness as set forth herein; or

 

(iii)          affect the relative rights of Holders and
creditors of such Guarantor other than their rights in relation to holders of
Senior Indebtedness.

 

Section 12.08         Subordination May Not Be Impaired by a
Guarantor.

 

No right of any holder of Senior Indebtedness of a
Guarantor to enforce the subordination of the obligations of such Guarantor
under its Guarantee shall be impaired by any act or failure to act by such
Guarantor or by its failure to comply with this Indenture.

 

Section 12.09         Rights of Trustee and Paying Agent.

 

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

 

The Trustee in its individual or any other capacity
shall be entitled to hold Senior Indebtedness of a Guarantor with the same
rights it would have if it were not Trustee. 
The Registrar and the Paying Agent shall be entitled to do the same with
like rights.  The Trustee shall be
entitled to all the rights set forth in this Article 12 with respect to
any Senior Indebtedness of a Guarantor which may at any time be held by it, to
the same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such
holder.  Nothing in this Article 12
shall apply

 

112

 

to
claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof or any other Section of this Indenture.

 

Section 12.10         Distribution or Notice to Representative.

 

Whenever a distribution is to be made or a notice
given to holders of Senior Indebtedness of a Guarantor, the distribution may be
made and the notice given to their Representative (if any).

 

Section 12.11         Article 12 Not To Prevent Events of
Default or Limit Right To Demand Payment.

 

The failure of a Guarantor to make a payment
pursuant its Guarantee by reason of any provision in this Article 12 shall
not be construed as preventing the occurrence of a default by such Guarantor
under its Guarantee.  Nothing in this Article 12
shall have any effect on the right of the Holders or the Trustee to make a
demand for payment on a Guarantor pursuant to Article 11 hereof.

 

Section 12.12         Trust Moneys Not Subordinated.

 

Notwithstanding anything contained herein to the
contrary, payments from money or the proceeds of Government Securities held in
trust by the Trustee for the payment of principal of and interest on the Notes
pursuant to Article 8 or Article 13 hereof shall not be subordinated
to the prior payment of any Senior Indebtedness of any Guarantor or subject to
the restrictions set forth in this Article 12, and none of the Holders
shall be obligated to pay over any such amount to such Guarantor or any holder
of Senior Indebtedness of such Guarantor or any other creditor of such
Guarantor, provided that the subordination provisions of this Article 12
were not violated at the time the applicable amounts were deposited in trust
pursuant to Article 8 or Article 13 hereof, as the case may be

 

Section 12.13         Trustee Entitled To Rely.

 

Upon any payment or distribution pursuant to this Article 12,
the Trustee and the Holders shall be entitled to rely (a) upon any order
or decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in Section 12.02 hereof are pending, (b) upon a
certificate of the liquidating trustee or agent or other Person making such
payment or distribution to the Trustee or to the Holders or (c) upon the
Representatives of Senior Indebtedness of a Guarantor for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such Senior Indebtedness and other Indebtedness of
such Guarantor, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this Article 12.  In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness of a Guarantor to participate in any payment
or distribution pursuant to this Article 12, the Trustee shall be entitled
to request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of such Senior Indebtedness held by such Person,
the extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this Article 12,
and, if such evidence is not furnished, the Trustee shall be entitled to defer
any payment to such Person pending judicial determination as to the right of
such Person to receive such payment.  The
provisions of Sections 7.01 and 7.02 hereof shall be applicable to all actions
or omissions of actions by the Trustee pursuant to this Article 12.

 

113

 

Section 12.14         Trustee To Effectuate Subordination.

 

A Holder by its acceptance of a Note agrees to be
bound by this Article 12 and authorizes and expressly directs the Trustee,
on his behalf, to take such action as may be necessary or appropriate to
effectuate the subordination between the Holders and the holders of Senior
Indebtedness of a Guarantor as provided in this Article 12 and appoints
the Trustee as attorney-in-fact for any and all such purposes.

 

Section 12.15         Trustee Not Fiduciary for Holders of Senior
Indebtedness of Guarantors.

 

The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness of a Guarantor and shall not be
liable to any such holders if it shall mistakenly pay over or distribute to
Holders or such Guarantor or any other Person, money or assets to which any
holders of Senior Indebtedness of such Guarantor shall be entitled by virtue of
this Article 12 or otherwise.

 

Section 12.16         Reliance by Holders of Senior Indebtedness of
a Guarantor on Subordination Provisions.

 

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

 

Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness of a Guarantor may, at
any time and from time to time, without the consent of or notice to the Trustee
or the Holders, without incurring responsibility to the Trustee or the Holders
and without impairing or releasing the subordination provided in this Article 12
or the obligations hereunder of the Holders to the holders of the Senior
Indebtedness of such Guarantor, do any one or more of the
following:  (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness of such
Guarantor, or otherwise amend or supplement in any manner Senior Indebtedness
of such Guarantor, or any instrument evidencing the same or any agreement under
which Senior Indebtedness of such Guarantor is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness of such Guarantor; (iii) release
any Person liable in any manner for the payment or collection of Senior
Indebtedness of such Guarantor; and (iv) exercise or refrain from exercising
any rights against such Guarantor and any other Person.

 

ARTICLE 13

SATISFACTION AND DISCHARGE

 

Section 13.01         Satisfaction and Discharge.

 

This Indenture shall be discharged and shall cease
to be of further effect as to all Notes, when either:

 

114

 

(1)           all Notes theretofore authenticated and
delivered, except lost, stolen or destroyed Notes which have been replaced or
paid and Notes for whose payment money has theretofore been deposited in trust,
have been delivered to the Trustee for cancellation; or

 

(2)           (A)  all Notes not theretofore delivered
to the Trustee for cancellation have become due and payable by reason of the
making of a notice of redemption or otherwise, shall become due and payable
within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Issuer and the Issuer or
any Guarantor have irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust solely for the benefit of the Holders of the
Notes, cash in U.S. dollars, Government Securities, or a combination thereof,
in such amounts as will be sufficient without consideration of any reinvestment
of interest to pay and discharge the entire indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation for principal, premium,
if any, and accrued interest to the date of maturity or redemption;

 

(B)           no Default (other than that resulting from
borrowing funds to be applied to make such deposit and any similar and
simultaneous deposit relating to other Indebtedness) with respect to this
Indenture or the Notes shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit and such deposit will
not result in a breach or violation of, or constitute a default under the
Senior Credit Facilities or any other material agreement or instrument (other
than this Indenture) to which the Issuer or any Guarantor is a party or by
which the Issuer or any Guarantor is bound (other than that resulting from any
borrowing of funds to be applied to make such deposit and any similar and
simultaneous deposit relating to other Indebtedness and the granting of Liens
in connection therewith);

 

(C)           the Issuer has paid or caused to be paid all
sums payable by it under this Indenture; and

 

(D)          the Issuer has delivered irrevocable
instructions to the Trustee to apply the deposited money toward the payment of
the Notes at maturity or the redemption date, as the case may be.

 

In addition, the Issuer must deliver an Officer’s
Certificate and an Opinion of Counsel to the Trustee stating that all
conditions precedent to satisfaction and discharge have been satisfied.

 

Notwithstanding the satisfaction and discharge of
this Indenture, if money shall have been deposited with the Trustee pursuant to
subclause (A) of clause (2) of this Section 13.01, the
provisions of Section 13.02 and Section 8.06 hereof shall survive.

 

Section 13.02         Application of Trust Money.

 

Subject to the provisions of Section 8.06
hereof, all money deposited with the Trustee pursuant to Section 13.01
hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Issuer acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium and Additional Interest, if any) and interest for whose payment
such money has been deposited with the Trustee; but such money need not be
segregated from other funds except to the extent required by law.

 

115

 

If the Trustee or Paying Agent is unable to apply
any money or Government Securities in accordance with Section 13.01 hereof
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Issuer’s and any Guarantor’s obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 13.01 hereof; provided that if the
Issuer has made any payment of principal of, premium and Additional Interest,
if any, or interest on any Notes because of the reinstatement of its
obligations, the Issuer shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.

 

ARTICLE 14

MISCELLANEOUS

 

Section 14.01         Trust Indenture Act Controls.

 

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

 

Section 14.02         Notices.

 

Any notice or communication by the Issuer, any
Guarantor or the Trustee to the others is duly given if in writing and
delivered in person or mailed by first-class mail (registered or certified,
return receipt requested), fax or overnight air courier guaranteeing next day
delivery, to the others’ address:

 

If to the Issuer and/or any Guarantor:

 

c/o Accellent Inc. 

100 Fordham Road

Wilmington, Massachusetts 01887

Fax No.: (978) 657-0878

Attention: Chief Financial Officer

 

If to the Trustee:

 

The Bank of New York

101 Barclay Street, Floor 8W

New York, New York 10286

Fax No.: (212) 815-3272

Attention:  Corporate Trust
Administration

 

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

 

All notices and communications (other than those
sent to Holders) shall be deemed to have been duly given: at the time delivered
by hand, if personally delivered; five calendar days after being deposited in
the mail, postage prepaid, if mailed by first-class mail; when receipt
acknowledged, if faxed; and the next Business Day after timely delivery to the
courier, if sent by overnight air courier

 

116

 

guaranteeing
next day delivery; provided that any notice or communication delivered
to the Trustee shall be deemed effective upon only actual receipt thereof.

 

Any notice or communication to a Holder shall be
mailed by first-class mail, certified or registered, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its address shown
on the register kept by the Registrar. 
Any notice or communication shall also be so mailed to any Person
described in Trust Indenture Act Section 313(c), to the extent required by
the Trust Indenture Act.  Failure to mail
a notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.

 

If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it; provided that any notices or communications to
the Trustee shall be deemed effective only upon actual receipt thereof.

 

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

 

Section 14.03         Communication by Holders of Notes with Other
Holders of Notes.

 

Holders may communicate pursuant to Trust Indenture
Act Section 312(b) with other Holders with respect to their rights
under this Indenture or the Notes.  The
Issuer, the Trustee, the Registrar and anyone else shall have the protection of
Trust Indenture Act Section 312(c).

 

Section 14.04         Certificate and Opinion as to Conditions
Precedent.

 

Upon any request or application by the Issuer or any
of the Guarantors to the Trustee to take any action under this Indenture, the
Issuer or such Guarantor, as the case may be, shall furnish to the Trustee:

 

(a)           An Officer’s Certificate in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 14.05 hereof) stating that, in the opinion
of the signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and

 

(b)           An Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include the statements set
forth in Section 14.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been satisfied.

 

Section 14.05         Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture (other
than a certificate provided pursuant to Section 4.04 hereof or Trust
Indenture Act Section 314(a)(4)) shall comply with the provisions of Trust
Indenture Act Section 314(e) and shall include:

 

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

 

117

 

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

 

(c)           a statement that, in the opinion of such
Person, he or she has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with (and, in the case of an Opinion of Counsel,
may be limited to reliance on an Officer’s Certificate as to matters of fact);
and

 

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

 

Section 14.06         Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for
action by or at a meeting of Holders. 
The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

 

Section 14.07         No Personal Liability of Directors, Officers,
Employees and Stockholders.

 

No director, officer, employee, incorporator or
stockholder of the Issuer or any Guarantor or any of their parent companies
shall have any liability for any obligations of the Issuer or the Guarantors
under the Notes, the Guarantees or this Indenture or for any claim based on, in
respect of, or by reason of such obligations or their creation.  Each Holder by accepting Notes waives and
releases all such liability.  The waiver
and release are part of the consideration for issuance of the Notes.

 

Section 14.08         Governing Law.

 

THIS INDENTURE, THE NOTES AND ANY GUARANTEE WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 14.09         Waiver of Jury Trial.

 

EACH OF THE ISSUER, THE GUARANTORS AND THE TRUSTEE
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 14.10         Force Majeure.

 

In no event shall the Trustee be responsible or
liable for any failure or delay in the performance of its obligations under
this Indenture arising out of or caused by, directly or indirectly, forces
beyond its reasonable control, including without limitation strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software or hardware)
services.

 

118

 

Section 14.11         No Adverse Interpretation of Other Agreements.

 

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

 

Section 14.12         Successors.

 

All agreements of the Issuer 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 its successors, except as otherwise provided in Section 11.05
hereof.

 

Section 14.13         Severability.

 

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

 

Section 14.14         Counterpart Originals.

 

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

 

Section 14.15         Table of Contents, Headings, etc.

 

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

 

Section 14.16         Qualification of Indenture.

 

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

 

[Signatures on following page]

 

119

 

	
   

  	
  ACCELLENT INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stewart A. Fisher

  	
   

  
	
   

  	
   

  	
  Name:  Stewart A. Fisher

  
	
   

  	
   

  	
  Title:  Chief Financial Officer, Executive Vice

  
	
   

  	
   

  	
  President, Treasurer and Secretary

  

 

Signature Page to Senior
Subordinated Indenture

 

 

	
   

  	
  ACCELLENT CORP.

  
	
   

  	
  AMERICAN TECHNICAL MOLDING, INC.

  
	
   

  	
  NOBLE-MET, LTD.

  
	
   

  	
  G&D, INC. D/B/A STAR GUIDE CORPORATION

  
	
   

  	
  UTI HOLDING COMPANY

  
	
   

  	
  UTI CORPORATION

  
	
   

  	
  MICRO-GUIDE, INC.

  
	
   

  	
  VENUSA, LTD.

  
	
   

  	
  SPECTRUM MANUFACTURING, INC.

  
	
   

  	
  MEDSOURCE TECHNOLOGIES, INC.

  
	
   

  	
  MEDSOURCE TECHNOLOGIES, LLC

  
	
   

  	
  BRIMFIELD ACQUISITION CORP.

  
	
   

  	
  BRIMFIELD PRECISION, LLC

  
	
   

  	
  KELCO ACQUISITION, LLC

  
	
   

  	
  HAYDEN PRECISION INDUSTRIES, LLC

  
	
   

  	
  PORTLYN, LLC

  
	
   

  	
  TENAX, LLC

  
	
   

  	
  THERMAT ACQUISITION CORP.

  
	
   

  	
  MEDSOURCE TECHNOLOGIES, NEWTON INC.

  
	
   

  	
  MEDSOURCE TECHNOLOGIES PITTSBURGH, INC.

  
	
   

  	
  MEDSOURCE TRENTON, INC.

  
	
   

  	
  NATIONAL WIRE & STAMPING, INC.

  
	
   

  	
  TEXCEL, INC.

  
	
   

  	
  CE HUNTSVILLE HOLDINGS CORP.

  
	
   

  	
  CYCAM, INC.

  
	
   

  	
  ELX, INC.

  
	
   

  	
  MACHINING TECHNOLOGY GROUP, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stewart A. Fisher

  	
   

  
	
   

  	
   

  	
  Name:  Stewart A. Fisher

  	
   

  
	
   

  	
   

  	
  Title:  Chief Financial Officer, Vice

  
	
   

  	
   

  	
  President, Treasurer and Secretary

  	
   

  

 

 

	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Lagumina

  	
   

  
	
   

  	
   

  	
  Name: Mary LaGumina

  	
   

  
	
   

  	
   

  	
  Title: Vice President

  	
   

  

 

 

EXHIBIT A

 

[Face of Note]

 

[Insert the Global Note Legend, if applicable
pursuant to the provisions of the Indenture]

 

[Insert the Private Placement Legend, if applicable
pursuant to the provisions of the Indenture]

 

[Insert the Regulation S Temporary Global Note
Legend, if applicable pursuant to the provisions of the Indenture]

 

A-1

 

CUSIP 
[                    ]

ISIN  [                 ](1)

 

[[RULE 144A][REGULATION S] GLOBAL NOTE

representing up to

$                  ]

101⁄2 % Senior Subordinated Notes due 2013

 

 

	
  No.     

  	
   

  	
  $                        ]

  

 

 

ACCELLENT INC.

 

 

promises
to pay to CEDE & CO. or registered assigns, the principal sum [set
forth on the Schedule of Exchanges of Interests in the Global Note
attached hereto] [of                                            United
States Dollars] on December 1, 2013.

 

 

Interest
Payment Dates:  June 1 and December 1

 

Record
Dates:  May 15 and November 15

 

	
  (1)

  	
  Rule 144A Note CUSIP: 00430X AA 5

  
	
   

  	
  Rule 144A Note ISIN: US00430XAA54

  
	
   

  	
  Regulation S Note CUSIP: U00450 AA 1

  
	
   

  	
  Regulation S Note ISIN: USU00450AA14

  
	
   

  	
  Exchange Note CUSIP: 00430X AB 3

  
	
   

  	
  Exchange Note ISIN: US00430XAB38

  

 

A-2

 

IN WITNESS HEREOF, the Issuer has caused this
instrument to be duly executed.

 

Dated:  November 22, 2005

	
   

  	
  ACCELLENT INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-3

 

	
  This is one of the Notes referred to in the within-mentioned
  Indenture:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

A-4

 

[Back of Note]

101⁄2% Senior Subordinated Notes due 2013

 

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

 

1.                                       INTEREST. 
Accellent Inc., a Maryland corporation, promises to pay interest on the
principal amount of this Note at 101⁄2% per annum from November 22, 2005(2)
until maturity and shall pay the Additional Interest, if any, payable pursuant
to the Registration Rights Agreement referred to below.  The Issuer will pay interest and Additional
Interest, if any, semi-annually in arrears on June 1 and December 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 will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that the first Interest
Payment Date shall be June 1, 2006(2).  The Issuer will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the interest rate
on the Notes; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Additional Interest, if any, (without regard to any applicable grace periods)
from time to time on demand at the interest rate on the Notes.  Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months.

 

2.                                       METHOD OF PAYMENT.  The Issuer will pay interest on the Notes and
Additional Interest, if any, to the Persons who are registered Holders of Notes
at the close of business on the May 15 or November 15 (whether or not
a Business Day), as the case may be, next 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 2.12 of the Indenture with
respect to defaulted interest.  Payment
of interest and Additional Interest, if any, may be made by check mailed to the
Holders at their addresses set forth in the register of Holders, provided
that payment by wire transfer of immediately available funds will be required
with respect to principal of and interest, premium and Additional Interest, if
any, on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Issuer or the Paying Agent.  Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.

 

3.                                       PAYING AGENT AND REGISTRAR.  Initially, The Bank of New York, the Trustee
under the Indenture, will act as Paying Agent and Registrar.  The Issuer may change any Paying Agent or
Registrar without notice to the Holders. 
The Issuer or any of its Subsidiaries may act in any such capacity.

 

4.                                       INDENTURE. 
The Issuer issued the Notes under an Indenture, dated as of November 22,
2005 (the “Indenture”), among Accellent Inc., the Guarantors named
therein and the Trustee.

 

(2)                                  With
respect to the Initial Notes.

 

A-5

 

This
Note is one of a duly authorized issue of notes of the Issuer designated as its
101⁄2% Senior Subordinated Notes due 2013. 
The Issuer shall be entitled to issue Additional Notes pursuant to Section 2.01
and 4.09 of the Indenture.  The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust
Indenture Act”).  The Notes are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms.  To
the extent any provision of this Note conflicts with the express provisions of
the Indenture, the provisions of the Indenture shall govern and be controlling.

 

5.                                       OPTIONAL REDEMPTION.

 

(a)                                  Except as described below under clauses 5(b) and
5(c) hereof, the Notes will not be redeemable at the Issuer’s option
before December 1, 2009.

 

(b)                                 At any time prior to December 1, 2009,
the Issuer may redeem all or a part of the Notes, upon not less than 30 nor
more than 60 days’ prior notice mailed by first-class mail to the registered
address of each Holder of Notes, at a redemption price equal to 100% of the
principal amount of the Notes redeemed plus the Applicable Premium as of, and
accrued and unpaid interest and Additional Interest, if any, to the date of
redemption (the “Redemption Date”), subject to the rights of Holders of
Notes on the relevant Record Date to receive interest due on the relevant
Interest Payment Date.

 

(c)                                  Until December 1, 2008, the Issuer may,
at its option, redeem up to 35% of the aggregate principal amount of Notes
issued by it at a redemption price equal to 110.50% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon and Additional Interest,
if any, to the applicable Redemption Date, subject to the right of Holders of
Notes of record on the relevant Record Date to receive interest due on the
relevant Interest Payment Date, with the net cash proceeds of one or more
Public Equity Offerings; provided that at least 65% of the sum of the
aggregate principal amount of Notes originally issued under the Indenture and
any Additional Notes that are Notes issued under the Indenture after the Issue
Date remains outstanding immediately after the occurrence of each such
redemption; provided  further that each such redemption occurs
within 90 days of the date of closing of each such Public Equity Offering.  Notice of any redemption upon any Public
Equity Offering may be given prior to the redemption thereof, and any such
redemption or notice may, at the Issuer’s discretion, be subject to one or more
conditions precedent, including, but not limited to, completion of the related
Public Equity Offering.

 

(d)                                 On and after December 1, 2009, the
Issuer may redeem the Notes, in whole or in part, upon not less than 30 nor
more than 60 days’ prior notice by first-class mail, postage prepaid, with a
copy to the Trustee, to each Holder of Notes at the address of such Holder
appearing in the security register, at the redemption prices (expressed as
percentages of principal amount of the Notes to be redeemed) set forth below,
plus accrued and unpaid interest thereon and Additional Interest, if any, to
the applicable Redemption Date, subject to the right of Holders of Notes of
record on the relevant Record Date to receive interest due on the relevant
Interest Payment Date, if redeemed during the twelve-month period beginning on December 1
of each of the years indicated below:

 

A-6

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2009

  	
   

  	
  105.250

  	
  %

  
	
  2010

  	
   

  	
  102.625

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(e)                                  Any redemption pursuant to this
paragraph 5 shall be made pursuant to the provisions of Sections 3.01
through 3.06 of the Indenture.

 

6.                                       MANDATORY REDEMPTION.  The Issuer shall not be required to make
mandatory redemption or sinking fund payments with respect to the Notes.

 

7.                                       NOTICE OF REDEMPTION.  Subject to Section 3.03 of the
Indenture, notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date (except that
redemption notices may be mailed more than 60 days prior to a redemption date
if the notice is issued in connection with Article 8 or Article 13 of
the Indenture) to each Holder whose Notes are to be redeemed at its registered
address.  Notes in denominations larger
than $2,000 may be redeemed in part but only in whole multiples of $1,000 in
excess of $2,000, unless all of the Notes held by a Holder are to be
redeemed.  On and after the redemption
date interest ceases to accrue on Notes or portions thereof called for
redemption.

 

8.                                       OFFERS TO REPURCHASE.

 

(a)                                  Upon the occurrence of a Change of Control,
the Issuer shall make an offer (a “Change of Control Offer”) to each
Holder to repurchase all or any part (equal to $2,000 or an integral multiple
of $1,000 in excess of $2,000) of each Holder’s Notes at a purchase price equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Additional Interest thereon, if any, to the date of purchase (the “Change
of Control Payment”).  The Change of
Control Offer shall be made in accordance with Section 4.14 of the
Indenture.

 

(b)                                 If the Issuer or any of its Restricted
Subsidiaries consummates an Asset Sale, within 10 Business Days of each date
that Excess Proceeds exceed $20.0 million, the Issuer shall commence, an offer
to all Holders of the Notes and, if required by the terms of any Indebtedness
that is pari passu with the Notes
(“Pari Passu Indebtedness”), to the holders of such Pari Passu
Indebtedness (an “Asset Sale Offer”), to purchase the maximum principal
amount of Notes (including any Additional Notes) and such other Pari Passu
Indebtedness that may be purchased out of the Excess Proceeds at an offer price
in cash in an amount equal to 100% of the principal amount thereof plus accrued
and unpaid interest and Additional Interest thereon, if any, to the date fixed
for the closing of such offer, in accordance with the procedures set forth in
the Indenture.  To the extent that the
aggregate amount of Notes (including any Additional Notes) and such Pari Passu
Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Issuer may use any remaining Excess Proceeds for general
corporate purposes, subject to other covenants contained in the Indenture.  If the aggregate principal amount of Notes or
the Pari Passu Indebtedness surrendered by such holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes and such Pari
Passu Indebtedness to be purchased on a pro
rata basis based on the accreted value or principal amount of the
Notes or such Pari Passu Indebtedness tendered. 
Upon completion of any such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.  Holders

 

A-7

 

of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Issuer prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled “Option of Holder to Elect
Purchase” attached to the Notes.

 

9.                                       DENOMINATIONS, TRANSFER, EXCHANGE.  The Notes are in registered form without
coupons in denominations of $2,000 and integral multiples of $1,000 in excess
of $2,000.  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 Issuer may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. 
The Issuer need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed portion of
any Note being redeemed in part.  Also,
the Issuer need not exchange or register the transfer of any Notes for a period
of 15 days before a selection of Notes to be redeemed.

 

10.                                 SUBORDINATION.  The Notes and the Guarantees are subordinated
to Senior Indebtedness of the Issuer and the Guarantors on the terms and
subject to the conditions set forth in the Indenture.  To the extent provided in the Indenture,
Senior Indebtedness must be paid before the Notes and Guarantees may be paid.  The Issuer agrees, and each Holder by
accepting a Note agrees, to the subordination provisions contained in the
Indenture and authorizes the Trustee to give it effect and appoints the Trustee
as attorney-in-fact for such purpose.

 

11.                                 PERSONS DEEMED OWNERS.  The registered Holder of a Note may be
treated as its owner for all purposes.

 

12.                                 AMENDMENT, SUPPLEMENT AND WAIVER.  The Indenture, the Guarantees or the Notes
may be amended or supplemented as provided in the Indenture.

 

13.                                 DEFAULTS AND REMEDIES.  The Events of Default relating to the Notes
are defined in Section 6.01 of the Indenture.  If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 30% in principal amount of
the then outstanding Notes may declare the principal, premium, if any, interest
and any other monetary obligations on all the then outstanding Notes to be due
and payable immediately; provided, however, that so long as any
Indebtedness permitted to be incurred under the Indenture as part of the Senior
Credit Facilities shall be outstanding, no such acceleration shall be effective
until the earlier of: (1) acceleration of any such Indebtedness under the
Senior Credit Facilities; or (2) five Business Days after the giving of
written notice of such acceleration to the Issuer and the administrative agent
under the Senior Credit Facilities. 
Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, all outstanding Notes
will become due and payable immediately without further action or notice.  Holders may not enforce the Indenture, the
Notes or the Guarantees except as provided in the Indenture.  Subject to certain limitations, Holders of a
majority in aggregate principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of the
Notes notice of any continuing Default (except a Default relating to the
payment of principal, premium, if any, Additional Interest, if any, or interest)
if it determines that withholding notice is in their interest.  The Holders of 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 and its
consequences under the Indenture except a continuing Default in payment of the
principal of, premium, if any, Additional Interest, if

 

A-8

 

any,
or interest on, any of the Notes held by a non-consenting Holder.  The Issuer and each Guarantor (to the extent
that such Guarantor is so required under the Trust Indenture Act) is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Issuer is required within five (5) Business Days after
becoming aware of any Default, to deliver to the Trustee a statement specifying
such Default and what action the Issuer proposes to take with respect thereto.

 

14.                                 AUTHENTICATION.  This Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose until
authenticated by the manual signature of the Trustee.

 

15.                                 ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED
GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. 
In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes
shall have all the rights set forth in the Exchange and Registration Rights
Agreement, dated as of November 22, 2005, among Accellent Inc., the
Guarantors named therein and the other parties named on the signature pages thereof
(the “Registration Rights Agreement”), including the right to receive
Additional Interest (as defined in the Registration Rights Agreement).

 

16.                                 GOVERNING LAW.  THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.

 

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

 

The Issuer will furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement.  Requests may be made
to the Issuer at the following address:

 

100 Fordham Road

Wilmington, Massachusetts 01887

Fax No.: (978) 657-0878

Attention:  Chief Financial Officer

 

A-9

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

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

  	
   

  
	
   

  	
  (Insert assignee’ legal
  name)

  
	
   

  	
   

  
	
   

  	
   

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

  
	
   

  
	
   

  
	
   

  
	
   

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

  
	
  and irrevocably appoint

  	
   

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

  
	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on

  the face of this Note)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  	
   

  
								

 

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

 

A-10

 

OPTION OF HOLDER TO ELECT PURCHASE

 

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

 

o Section 4.10                                                                 o Section 4.14

 

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

 

$               

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on

  the face of this Note)

  
	
   

  	
   

  	
   

  
	
   

  	
  Tax Identification No.:

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  	
   

  
							

 

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

 

A-11

 

SCHEDULE OF EXCHANGES OF INTERESTS IN
THE GLOBAL NOTE*

 

The initial outstanding principal amount of this
Global Note is $                   .  The following exchanges of a part of this
Global Note for an interest in another Global Note or for a Definitive Note, or
exchanges of a part of another Global or Definitive Note for an interest in
this Global Note, have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount of

  decrease

  in Principal

  Amount

  	
   

  	
  Amount of increase

  in Principal

  Amount of this

  Global Note

  	
   

  	
  Principal Amount

  of

  this Global Note

  following such

  decrease or

  increase

  	
   

  	
  Signature of

  authorized officer

  of Trustee or 

  Note Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*This
schedule should be included only if the Note is issued in global form.

 

A-12

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

Accellent
Inc.

100 Fordham Road

Wilmington, Massachusetts 01887

Fax No.: (978) 657-0878

Attention:  Chief Financial Officer

 

The
Bank of New York

101 Barclay Street, Floor 8W

New York, New York 10286

Fax No.: (212) 815-3272

Attention:  Corporate Trust
Administration

 

Re:  101⁄2%
Senior Subordinated Notes due 2013

 

Reference is hereby made to the Indenture, dated as
of November 22, 2005 (the “Indenture”), among Accellent Inc., the
Guarantors named therein and the Trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

 

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

 

[CHECK ALL THAT APPLY]

 

1.                                       o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
RULE 144A.  The Transfer is being
effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and
each such account is a “qualified institutional buyer” within the meaning of Rule 144A
in a transaction meeting the requirements of Rule 144A and such Transfer
is in compliance with any applicable blue sky securities laws of any state of
the United States.

 

2.                                       o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE
PURSUANT TO REGULATION S.  The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably

 

B-1

 

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) if the proposed transfer is being made prior to the expiration of
the Restricted Period, the transfer is not being made to a U.S. Person or for
the account or benefit of a U.S. Person (other than an Initial Purchaser).  Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will be subject to the restrictions on Transfer enumerated
in the Indenture and the Securities Act.

 

3.                                       o CHECK AND COMPLETE IF TRANSFEREE WILL TAKE
DELIVERY OF A BENEFICIAL INTEREST IN THE DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S.  The Transfer is being effected in compliance
with the transfer restrictions applicable to beneficial interests in Restricted
Global Notes and Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act and any applicable blue sky securities laws of any
state of the United States, and accordingly the Transferor hereby further
certifies that (check one):

 

(a)                                  o such Transfer is being effected pursuant to
and in accordance with Rule 144 under the Securities Act;

 

or

 

(b)                                 o such Transfer is being effected to the
Issuer or a subsidiary thereof;

 

or

 

(c)                                  o such Transfer is being effected pursuant to
an effective registration statement under the Securities Act and in compliance
with the prospectus delivery requirements of the Securities Act.

 

4.                                       o CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED
DEFINITIVE NOTE.

 

(a)                                  o CHECK
IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected
pursuant to and in accordance with Rule 144 under the Securities Act and
in compliance with the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act.  Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.

 

B-2

 

(b)                                 o CHECK
IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. 
Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will
no longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.

 

(c)                                  o 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 Issuer.

 

	
   

  	
  [Insert Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
					

 

B-4

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

1.                                       The Transferor owns and proposes to transfer
the following:

 

[CHECK ONE OF (a) OR (b)]

 

(a)                                  o a
beneficial interest in the:

 

(i)                           o 144A Global Note (CUSIP 00430X AA 5), or

 

(ii)                        o Regulation S Global Note (CUSIP U00450 AA
1), or

 

(b)                                 o a
Restricted Definitive Note.

 

2.                                       After the Transfer the Transferee will hold:

 

[CHECK ONE]

 

(a)                                  o a
beneficial interest in the:

 

(i)                           o 144A Global Note (CUSIP 00430X AA 5), or

 

(ii)                        o Regulation S Global Note (CUSIP U00450 AA
1), or

 

(iii)                     o Unrestricted Global Note (CUSIP 00430X AB
3); or

 

(b)                                 o a
Restricted Definitive Note; or

 

(c)                                  o an Unrestricted Definitive Note, in
accordance with the terms of the Indenture.

 

B-5

 

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

Accellent
Inc.

100 Fordham Road

Wilmington, Massachusetts 01887

Fax No.: (978) 657-0878

Attention: Chief Financial Officer

 

The
Bank of New York

101 Barclay Street, Floor 8W

New York, New York 10286

Fax No.: (212) 815-3272

Attention:  Corporate Trust
Administration

 

Re:  101⁄2%
Senior Subordinated Notes due 2013

 

Reference is hereby made to the Indenture, dated as
of November 22, 2005 (the “Indenture”), among Accellent Inc., the
Guarantors named therein and the Trustee. 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

 

                      (the
“Owner”) owns and proposes to exchange the Note[s] or interest in such
Note[s] specified herein, in the principal amount of $                   in
such Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Owner
hereby certifies that:

 

1)                                      EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE
NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE

 

a)                                   o CHECK IF EXCHANGE IS FROM BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED
GLOBAL NOTE.  In connection with the
Exchange of the Owner’s beneficial interest in a Restricted Global Note for a
beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to
the Global Notes and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the “Securities Act”), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any
state of the United States.

 

b)                                  o CHECK IF EXCHANGE IS FROM BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE.  In

 

C-1

 

connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for an Unrestricted Definitive
Note, the Owner hereby certifies (i) the Definitive Note is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.

 

c)                                   o CHECK IF EXCHANGE IS FROM RESTRICTED
DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE.  In connection with the Owner’s Exchange of a
Restricted Definitive Note for a beneficial interest in an Unrestricted Global
Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.

 

d)                                  o CHECK IF EXCHANGE IS FROM RESTRICTED
DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE.  In connection with the Owner’s Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

 

2)                                      EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES
OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES

 

a)                                   o CHECK IF EXCHANGE IS FROM BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE.  In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for a Restricted Definitive
Note with an equal principal amount, the Owner hereby certifies that the
Restricted Definitive Note is being acquired for the Owner’s own account
without transfer.  Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
Restricted Definitive Note issued will continue to be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Note and in the Indenture and the Securities Act.

 

C-2

 

b)                                  o 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 o Regulation S Global Note, with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner’s own account without transfer and (ii) such
Exchange has been 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 Issuer and are dated                                     .

 

	
   

  	
  [Insert Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
   

  
						

 

C-3

 

EXHIBIT D

 

 [FORM OF
SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS]

 

Supplemental Indenture (this “Supplemental
Indenture”), dated as of                  ,
among                             (the
“Guaranteeing Subsidiary”), a subsidiary of Accellent Inc., a Maryland
corporation (the “Issuer”), and The Bank of New York, as trustee (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the Issuer and each of the Guarantors (as
defined in the Indenture referred to below) have heretofore executed and
delivered to the Trustee an indenture (the “Indenture”), dated as of November 22,
2005, providing for the issuance of [an unlimited aggregate principal amount
of] 101⁄2% Senior Subordinated Notes due 2013 (the “Notes”);

 

WHEREAS, the Indenture provides that under certain
circumstances the Guaranteeing Subsidiary shall execute and deliver to the
Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary
shall unconditionally guarantee all of the Issuer’s Obligations under the Notes
and the Indenture on the terms and conditions set forth herein and under the
Indenture (the “Guarantee”); and

 

WHEREAS, pursuant to Section 9.01 of the
Indenture, the Trustee is authorized to execute and deliver this Supplemental
Indenture.

 

NOW THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:

 

(1)                                  Capitalized Terms. 
Capitalized terms used herein without definition shall have the meanings
assigned to them in the Indenture.

 

(2)                                  Agreement to Guarantee.  The
Guaranteeing Subsidiary hereby agrees as follows:

 

(a)                                  Along with all Guarantors named in the
Indenture, to jointly and severally unconditionally guarantee to each Holder of
a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of the
Indenture, the Notes or the obligations of the Issuer hereunder or thereunder,
that:

 

(i)                                      the principal of and interest, premium and
Additional Interest, if any, on the Notes will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Issuer to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and

 

D-1

 

(ii)                                   in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.  Failing payment when due of
any amount so guaranteed or any performance so guaranteed for whatever reason,
the Guarantors and the Guaranteeing Subsidiary shall be jointly and severally
obligated to pay the same immediately. 
This is a guarantee of payment and not a guarantee of collection.

 

(b)                                 The obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Notes or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Issuer, any action
to enforce the same or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor.

 

(c)                                  The following is hereby waived:  diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Issuer, any right to require a proceeding first against the Issuer, protest,
notice and all demands whatsoever.

 

(d)                                 This Guarantee shall not be discharged except
by complete performance of the obligations contained in the Notes, the
Indenture and this Supplemental Indenture, and the Guaranteeing Subsidiary
accepts all obligations of a Guarantor under the Indenture.

 

(e)                                  If any Holder or the Trustee is required by
any court or otherwise to return to the Issuer, the Guarantors (including the
Guaranteeing Subsidiary), or any custodian, trustee, liquidator or other similar
official acting in relation to either the Issuer or the Guarantors, any amount
paid either to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.

 

(f)                                    The Guaranteeing Subsidiary shall not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.

 

(g)                                 As between the Guaranteeing Subsidiary, on
the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article 6 of the Indenture for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in Article 6
of the Indenture, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guaranteeing Subsidiary for the purpose
of this Guarantee.

 

(h)                                 The Guaranteeing Subsidiary shall have the
right to seek contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the Holders under this
Guarantee.

 

D-2

 

(i)                                     Pursuant to Section 11.02 of the
Indenture, after giving effect to all other contingent and fixed liabilities
that are relevant under any applicable Bankruptcy or fraudulent conveyance
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under Article 11 of the
Indenture, this new Guarantee shall be limited to the maximum amount
permissible such that the obligations of such Guaranteeing Subsidiary under
this Guarantee will not constitute a fraudulent transfer or conveyance.

 

(j)                                     This Guarantee shall remain in full force and
effect and continue to be effective should any petition be filed by or against
the Issuer for liquidation, reorganization, should the Issuer become insolvent
or make an assignment for the benefit of creditors or should a receiver or
trustee be appointed for all or any significant part of the Issuer’s assets,
and shall, to the fullest extent permitted by law, continue to be effective or
be reinstated, as the case may be, if at any time payment and performance of
the Notes are, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee on the Notes and
Guarantee, whether as a “voidable preference”, “fraudulent transfer” or
otherwise, all as though such payment or performance had not been made.  In the event that any payment or any part
thereof, is rescinded, reduced, restored or returned, the Note shall, to the
fullest extent permitted by law, be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.

 

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

 

(l)                                     This Guarantee shall be a general unsecured
senior subordinated obligation of such Guaranteeing Subsidiary, ranking pari passu with any other future Senior
Indebtedness of the Guaranteeing Subsidiary, if any.

 

(m)                               Each payment to be made by the Guaranteeing
Subsidiary in respect of this Guarantee shall be made without set-off,
counterclaim, reduction or diminution of any kind or nature.

 

(3)                                  Execution and Delivery.  The
Guaranteeing Subsidiary agrees that the Guarantee shall remain in full force
and effect notwithstanding the absence of the endorsement of any notation of
such Guarantee on the Notes.

 

(4)                                  Merger, Consolidation or Sale of All or
Substantially All Assets.

 

(a)                                  Except as otherwise provided in Section 5.01(c) of
the Indenture, the Guaranteeing Subsidiary may not consolidate or merge with or
into or wind up into (whether or not the Issuer or Guaranteeing Subsidiary is
the surviving corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets, in
one or more related transactions, to any Person unless:

 

(i)                                     (A) the Guaranteeing Subsidiary is the
surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than the Guaranteeing Subsidiary)

 

D-3

 

or to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made is a corporation organized
or existing under the laws of the jurisdiction of organization of the
Guaranteeing Subsidiary, as the case may be, or the laws of the United States,
any state thereof, the District of Columbia, or any territory thereof (the
Guaranteeing Subsidiary or such Person, as the case may be, being herein called
the “Successor Person”);

 

(B)                                the Successor Person, if other than the
Guaranteeing Subsidiary, expressly assumes all the obligations of the
Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s
related Guarantee pursuant to supplemental indentures or other documents or
instruments in form reasonably satisfactory to the Trustee;

 

(C)                                immediately after such transaction, no
Default exists; and

 

(D)                               the Issuer shall have delivered to the
Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indentures, if
any, comply with the Indenture; or

 

(ii)                                  the transaction is made in compliance with Section 4.10
of the Indenture;

 

(b)                                 Subject to certain limitations described in
the Indenture, the Successor Person will succeed to, and be substituted for,
the Guaranteeing Subsidiary under the Indenture and the Guaranteeing Subsidiary’s
Guarantee.  Notwithstanding the
foregoing, the Guaranteeing Subsidiary may merge into or transfer all or part
of its properties and assets to another Guarantor or the Issuer.

 

(5)                                  Releases.

 

The Guarantee of the Guaranteeing Subsidiary shall
be automatically and unconditionally released and discharged, and no further
action by the Guaranteeing Subsidiary, the Issuer or the Trustee is required
for the release of the Guaranteeing Subsidiary’s Guarantee, upon:

 

(1)                                  (A)  any sale, exchange or transfer (by
merger or otherwise) of the Capital Stock of the Guaranteeing Subsidiary
(including any sale, exchange or transfer), after which the Guaranteeing
Subsidiary is no longer a Restricted Subsidiary or all or substantially all the
assets of the Guaranteeing Subsidiary, which sale, exchange or transfer is made
in compliance with the applicable provisions of the Indenture;

 

(B)                                the release or discharge of such Guarantor
from its guarantee of Indebtedness under the Senior Credit Facilities or the
guarantee that resulted in the obligation of such Guarantor to guarantee the
Notes, if such Guarantor would not then otherwise be required to guarantee the
Notes pursuant to the covenant described in Section 4.15 of the Indenture
(treating any guarantees of such Guarantor that remain outstanding as incurred
at least 30 days prior to such release or discharge);

 

(C)                                the proper designation of the Guaranteeing
Subsidiary as an Unrestricted Subsidiary; or

 

D-4

 

(D)                               the Issuer exercising its Legal Defeasance
option or Covenant Defeasance option in accordance with Article 8 of the
Indenture or the Issuer’s obligations under the Indenture being discharged in
accordance with the terms of the Indenture; and

 

(2)                                   the Guaranteeing Subsidiary delivering to the
Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for in the Indenture relating to such
transaction have been complied with.

 

(6)                                  No Recourse Against Others.  No
director, officer, employee, incorporator or stockholder of the Guaranteeing
Subsidiary shall have any liability for any obligations of the Issuer or the
Guarantors (including the Guaranteeing Subsidiary) under the Notes, any
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation.  Each Holder by accepting Notes waives and
releases all such liability.  The waiver
and release are part of the consideration for issuance of the Notes.

 

(7)                                  Governing Law.  THIS
SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

 

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

 

(9)                                  Effect of Headings.  The Section headings
herein are for convenience only and shall not affect the construction hereof.

 

(10)                            The Trustee.  The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary.

 

(11)                            Subrogation.  The Guaranteeing Subsidiary shall be
subrogated to all rights of Holders of Notes against the Issuer in respect of
any amounts paid by the Guaranteeing Subsidiary pursuant to the provisions of Section 2
hereof and Section 11.01 of the Indenture; provided that, if an
Event of Default has occurred and is continuing, the Guaranteeing Subsidiary
shall not be entitled to enforce or receive any payments arising out of, or
based upon, such right of subrogation until all amounts then due and payable by
the Issuer under the Indenture or the Notes shall have been paid in full.

 

(12)                            Benefits Acknowledged.  The Guaranteeing Subsidiary’s Guarantee is
subject to the terms and conditions set forth in the Indenture.  The Guaranteeing Subsidiary acknowledges that
it will receive direct and indirect benefits from the financing arrangements
contemplated by the Indenture and this Supplemental Indenture and that the guarantee
and waivers made by it pursuant to this Guarantee are knowingly made in
contemplation of such benefits.

 

(13)                            Successors.  All agreements of the Guaranteeing Subsidiary
in this Supplemental Indenture shall bind its Successors, except as otherwise provided
in Section 2(k) hereof or elsewhere in this Supplemental Indenture.  All agreements of the Trustee in this
Supplemental Indenture shall bind its successors.

 

D-5

 

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

 

	
   

  	
  [GUARANTEEING SUBSIDIARY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

D-6

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