Common use of Incurrence of Indebtedness and Issuance of Preferred Stock Clause in Contracts

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, 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, as of the date of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (collectively, "incurINCUR") any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary that is Disqualified Stock); provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and any of its Restricted Subsidiaries may issue shares of preferred stock that is Disqualified Stock if after giving effect to such issuance or incurrence on a pro forma basis, the sum of (including Disqualified Stockx) ifIndebtedness of the Company and its Restricted Subsidiaries, in each caseon a consolidated basis, (1y) the Company's Indebtedness liquidation value of outstanding preferred stock of Restricted Subsidiaries and (z) the aggregate amount payable by the Company and its Restricted Subsidiaries, on a consolidated basis, upon redemption of Disqualified Stock to Adjusted Operating Cash Flow Ratio as the extent such amount is not included in the preceding clause (y) shall be less than the product of Annualized Pro Forma EBITDA for the latest fiscal quarter 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 or Disqualified Stock is issued would have been 7.0 to 1 or lessmultiplied by 7.0, 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, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredquarter.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Neither AREP nor any Guarantor shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and neither AREP nor any Guarantor shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); provided, however, that the Company AREP or any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue shares Disqualified Stock, if immediately after giving effect to the incurrence of preferred stock additional Indebtedness (including Disqualified StockAcquired Debt) if, in each case, (1) the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as or issuance of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, 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, as ratio of the date aggregate principal amount of such calculation all outstanding Indebtedness (excluding Indebtedness incurred pursuant to clauses (4), (7) and (28) of Section 4.09(b) no Default and any Hedging Obligations of AREP's Subsidiaries that are not Guarantors) of AREP and its Subsidiaries (including any Guarantor) on a consolidated basis determined in accordance with GAAP (including an amount of Indebtedness equal to the principal amount of any Guarantees by AREP or Event its Subsidiaries (including any Guarantor) of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness of a Person (that is contractually subordinated to any other Indebtedness of the Company not AREP or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated a Subsidiary) to the Notes extent such Guarantees were not included in computing AREP's or its Subsidiaries' (including any Guarantor's) outstanding Indebtedness) to the Subsidiary Guarantee Tangible Net Worth of such Subsidiary AREP and its Subsidiaries (including any Guarantor) on a consolidated basis, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed would have been less than 1.75 to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured1.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will 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, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), other than Permitted Debt, and the Company shall not permit any Subsidiary Guarantor toissue, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue issue, any shares of preferred stock (other than Qualified Subsidiary Disqualified Stock); provided, however, that the Company or any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or the Company or any Guarantor may issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.00 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the such additional Indebtedness had been incurred, or the such Disqualified Stock or preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period. The provisions of the date first paragraph of this Section 4.09 shall not apply to the incurrence of any Permitted Debt. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09. In the case an Unrestricted Subsidiary incurs Non-Recourse Indebtedness and any such Non-Recourse Indebtedness ceases to be Non-Recourse Indebtedness of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall notUnrestricted Subsidiary, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of then such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary that is subject to this Section 4.09. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described above or is entitled to be contractually subordinated incurred pursuant to the first paragraph of this Section 4.09, the Company will, in its sole discretion, classify (or later reclassify) in whole or in part such item of Indebtedness in any other manner that complies with this Section 4.09 and such item of Indebtedness solely by virtue or a portion thereof may be classified (or later reclassified) in whole or in part as having been incurred under more than one of being unsecuredthe applicable clauses or pursuant to the first paragraph of this Section 4.09.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock and the Company’s Restricted Subsidiaries may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of ’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom). The first paragraph of this Section 4.09 shall not, prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”): (i) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities, in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of: (A) $700.0 million; and (B) 30.0% of the Company’s Consolidated Net Tangible Assets as if of the additional date of such incurrence; (ii) (A) the incurrence by the Company or any of its Restricted Subsidiaries of Existing Indebtedness had been incurredor (B) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under the 2018 Xxxxx Fargo Master Loan Facility and the New BofA Real Estate Facility (whether or not issued and outstanding as of the Issue Date) in each case of this clause (B), in amounts contemplated by the documentation for the 2018 Xxxxx Fargo Master Loan Facility and the New BofA Real Estate Facility at the date of closing of the Acquisition; (iii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the Issue Date and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to the Registration Rights Agreement (and any exchange notes or other debt properly incurred under this Indenture, where the terms of such exchange notes are substantially identical to such other debt); (iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under Floor Plan Facilities; (v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund or refinance any Indebtedness incurred pursuant to this clause (v), not to exceed, at any time outstanding, the greater of $100.0 million and 2.0% of Consolidated Total Assets; (vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this covenant or clauses (ii), (iii), or (vi) of this paragraph; provided that to the extent such Permitted Refinancing Indebtedness refinances (x) other than the Existing Notes, Indebtedness junior to the Notes or a Guarantee, as applicable, such Refinancing Indebtedness is junior to the Notes or the Guarantee, as applicable, or (y) Disqualified Stock or preferred stock had been issuedstock, such Refinancing Indebtedness is Disqualified Stock or preferred stock; (vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and its Restricted Subsidiaries; provided, that (A) if the Company or any Guarantor is the obligor on such Indebtedness owing to a Restricted Subsidiary, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee, in the case of a Guarantor; and (B) (I) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (II) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as that was not permitted by this clause (vii); (viii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes; (ix) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the date Company or a Restricted Subsidiary that was permitted to be incurred by another provision of such calculation this Section 4.09 and Indebtedness incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company or any Restricted Subsidiary not to exceed, at any time outstanding, the greater of (x) $100.0 million and (2y) no Default 2.0% of the Consolidated Total Assets of the Company; (x) Indebtedness arising from the honoring by a bank or Event other financial institution of Default would occur a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence; (xi) Obligations in respect of (A) performance, bid and surety or appeal bonds, letters of credit, completion guarantees, self-insurance obligations or workers compensation claims in the ordinary course of business and (B) agreements providing for indemnification, adjustment of purchase price, earn-outs or similar obligations incurred in connection with the acquisition or disposition of any business, assets or subsidiary; (xii) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business; (xiii) Indebtedness consisting of the financing of insurance premiums; (xiv) Indebtedness consisting of Guarantees incurred in the ordinary course of business under repurchase agreements or similar agreements in connection with the financing of sales of goods in the ordinary course of business; (xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under Mortgage Loans in an amount incurred pursuant to this clause (xv) not to exceed the greater of $300.0 million and 7.0% of Consolidated Total Assets at any time outstanding; (xvi) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as a consequence thereof. The Company shall notapplicable) which, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any when taken together with all other Indebtedness of the Company or and its Restricted Subsidiaries outstanding on the date of such incurrence and incurred pursuant to this clause (xvi) does not exceed the greater of $250.0 million and 6.0% of Consolidated Total Assets; and (xvii) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or a Restricted Subsidiary Guarantorincurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or consolidation, either: (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 4.09, or (B) the Fixed Charge Coverage Ratio is greater than or equal to the Fixed Charge Coverage Ratio immediately prior to such acquisition, merger or consolidation. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xvii) of the preceding paragraph, and may also be entitled to be incurred in whole or in part pursuant to the first paragraph of this Section 4.09, the Company will be permitted to divide and classify such item of Indebtedness on the date of its incurrence and later divide and reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09; for the avoidance of doubt, any Incurrence of Indebtedness may, if applicable, be classified in part as being Incurred and outstanding under the first paragraph of this Section 4.09 and in part as being Incurred and outstanding under one or more categories of Permitted Debt. Indebtedness that was outstanding on the Issue Date under Credit Facilities and Indebtedness that was outstanding under clause (ii)(B) of the definition of Permitted Debt as of the closing date of the Acquisition will be deemed to have been incurred on such date in reliance on the exception provided by clause (i) or clause (ii)(B), as applicable, of the case definition of Permitted Debt and unless repaid may benot be reclassified. Accrual of interest and dividends, unless such accretion or amortization of original issue discount, the payment of interest on any Indebtedness is also contractually subordinated in the form of additional Indebtedness with the same terms, changes to amounts outstanding in respect of Hedging Obligations solely as a result of fluctuations in interest rates, the Notes assumption or guarantee of Indebtedness of a Restricted Subsidiary by the Company or another Restricted Subsidiary Guarantee and the payment of such Subsidiary Guarantor, as dividends on Disqualified Stock or preferred stock of Restricted Subsidiaries in the case may be, on substantially identical terms; provided, however, that no Indebtedness shall form of additional shares of the same class of Disqualified Stock or preferred stock of Restricted Subsidiaries will not be deemed to be contractually subordinated to any other an incurrence of Indebtedness solely by virtue or an issuance of being unsecuredDisqualified Stock or preferred stock of Restricted Subsidiaries for purpose of this Section 4.09.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Corporation 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and the Corporation shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); stock, provided, however, that the Company Corporation or any of its Restricted Subsidiary Subsidiaries may incur Subordinated Indebtedness (including or Acquired Debt) Debt or issue shares of preferred stock (including Disqualified Stock) if, in each caseand the Guarantors may incur Subordinated Indebtedness or Acquired Debt or issue preferred stock, (1) if the Company's Indebtedness Consolidated Total Debt to Adjusted Operating Cash Flow Consolidated EBITDA Ratio as of for the Corporation’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Subordinated Indebtedness or Acquired Debt is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would not have been 7.0 greater than 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Subordinated Indebtedness or Acquired Debt had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period; provided further, that, notwithstanding Section 8.18, any Restricted Subsidiary that ceases to be a Wholly-Owned Subsidiary of the date Corporation as a result of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Restricted Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated issuing Capital Stock pursuant to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness this Section 8.7 shall be deemed to be contractually subordinated to remain a Restricted Subsidiary for all purposes under this Indenture. The first paragraph of this Section 8.7 shall not prohibit the incurrence of any other of the following items of Indebtedness solely by virtue or the issuance of being unsecured.any of the following Disqualified Stock (collectively, “Permitted Debt”):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall notor issue Disqualified Stock, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and that the Company shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock except for preferred stock issued to and held by the Company or any Wholly-Owned Restricted Subsidiary of the Company, PROVIDED that any subsequent issuance or transfer of Capital Stock that results in such Wholly-Owned Restricted Subsidiary ceasing to be a Wholly-Owned Restricted Subsidiary of the Company or any subsequent transfer of such preferred stock (other than Qualified Subsidiary Stock)to the Company or any of its Wholly-Owned Restricted Subsidiaries) shall be deemed, in each case, to constitute the issuance of such preferred stock by the issuer thereof; providedPROVIDED, howeverHOWEVER, that the Company or any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and any Subsidiary Guarantor may issue preferred stock (including Disqualified Stock) if, in each case, (1) the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, 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, as of the date of such calculation incurrence or issuance and (2) no Default or Event of Default would occur as a consequence thereofafter giving effect thereto, the Consolidated Leverage Ratio does not exceed 2.0 to 1.0. The Company shall not, and foregoing provisions shall not permit any Subsidiary Guarantor apply to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.:

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary and DFG may incur Indebtedness (including Acquired Debt) or ), and the Guarantors may guarantee such Indebtedness of DFG, and the Company and DFG may issue shares of preferred stock (including Disqualified Stock) if, in each case, if (1i) the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of ’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued (in either case, the “Incurrence Date”) would have been 7.0 at least 1.5 to 1 or less, determined on a pro forma basis and (including a pro forma application ii) the ratio (the “Debt Ratio”) of (A) the aggregate principal amount of consolidated Indebtedness 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, Company and its Subsidiaries outstanding as of the date of such calculation and the Company’s most recently ended fiscal quarter for which internal financial statements are available immediately preceding the Incurrence Date to (2B) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness the Consolidated Cash Flow of the Company or of such Subsidiary Guarantor, as for the case may be, unless such Indebtedness is also contractually subordinated Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the Incurrence Date would have been less than 5.0 to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms1; provided, however, that no for the purposes of calculating the aggregate principal amount of consolidated Indebtedness of the Company and its Subsidiaries as of any date (i) the aggregate principal amount of the outstanding Notes as of such date shall be deemed to be contractually subordinated the principal amount thereof as of such date and (ii) the aggregate principal amount of the Indebtedness outstanding under any revolving credit facility as of such date shall be deemed to be the daily average amounts outstanding thereunder during the three months ending on such date. Each of the foregoing ratios shall be calculated on a pro forma basis giving effect to (i)(A) the incurrence of the Indebtedness or issuance of the Disqualified Stock giving rise to such calculation, (B) any other incurrence of Indebtedness solely (other than revolving credit borrowings) or issuance of Disqualified Stock subsequent to the commencement of the four-quarter reference period and (C) in each such case, the application of the net proceeds therefrom as if such incurrence, issuance and application had occurred at the beginning of the four-quarter reference period and (ii) any acquisitions that have been made by virtue the Company or any of being unsecuredits Subsidiaries, including through mergers or consolidations and including any related financing transactions, during such four-quarter reference period or subsequent thereto and prior to the Calculation Date as if they occurred on the first day of such four-quarter reference period. In addition, the Consolidated Cash Flow for any such four-quarter reference period shall be calculated (i) to include the Consolidated Cash Flow of the acquired entities (adjusted to include any expense or cost reductions for which pro forma treatment would be permitted under Article 11 of Regulation S-X promulgated under the Securities Act as of the date of this Agreement), (ii) without giving effect to clause (iii) of the proviso set forth in the definition of Consolidated Net Income and (iii) to exclude the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and to operations or businesses disposed of prior to the Calculation Date. In calculating the Fixed Charges as of any Calculation Date, the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and to operations or businesses disposed of prior to the Calculation Date shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent Person or any of its Subsidiaries following the Calculation Date.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); provided, however, that the Company may incur Indebtedness or any issue Disqualified Stock and a Restricted Subsidiary may incur Acquired Debt if the ratio of Total Consolidated Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) to Adjusted Consolidated Operating Cash Flow for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at less than or equal to 1 or less6.0 to 1.0, 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, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereoffour-quarter period. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured.. The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuers shall not, and shall not permit any of its their respective Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and the Issuers shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted their respective Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company Issuers or any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of Consoltex Group for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1, 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, as at the beginning of such four-quarter period: provided further that no guarantee may be incurred pursuant to the provisions of this paragraph, unless the guaranteed Indebtedness is also incurred pursuant to this paragraph. The foregoing limitations shall not apply to (a) the incurrence by either Issuer or any Guarantor of Indebtedness pursuant to the Credit Agreement or otherwise in an aggregate principal amount not to exceed US$68,250,000 pursuant to this clause (a), (b) Indebtedness, not covered by any other clause of this paragraph, outstanding on the date of this Indenture, (c) Indebtedness arising out of letters of credit, performance bonds, surety bonds and bankers' acceptances incurred in the ordinary course of business; provided that if any unpaid reimbursement obligation under any such calculation instrument is outstanding for more than 10 consecutive business days, such obligation shall not be permitted to be incurred under this clause (c), (d) Indebtedness consisting of guarantees (other than guarantees relating to money borrowed), indemnities or obligations in respect of purchase price adjustments, in each case, in connection with the acquisition of assets permitted under this Indenture, (e) additional Indebtedness of up to $10 million in aggregate principal amount at any one time outstanding, (f) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes, including any Notes issued as payment of interest or Liquidated Damages on the Notes in accordance with the terms of the Notes, (g) Indebtedness of a Foreign Subsidiary existing at the time it is acquired (1) that is not incurred in contemplation of the acquisition of such Foreign Subsidiary and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated non-recourse to any other the Issuers and their respective Subsidiaries except to the assets of such Foreign Subsidiary (for purposes of this clause (g), Indebtedness of a Foreign Subsidiary existing at the Company or time it is acquired includes Indebtedness incurred pursuant to credit facilities in existence upon the acquisition of such Subsidiary Guarantor, as the case may be, unless Foreign Subsidiary; provided that such Indebtedness is also contractually subordinated to meets the Notes requirements of clauses (1) and (2) of this clause (g)), (h) the incurrence by the Issuers and their respective Subsidiaries of Indebtedness issued in exchange for, or the Subsidiary Guarantee proceeds of such Subsidiary Guarantorwhich are used to extend, as refinance, renew, replace or refund Indebtedness referred to in clauses (b), (f) and (g) above (the case may be, on substantially identical terms"Refinancing Indebtedness"); provided, however, that no (1) the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of Indebtedness so extended, refinanced, renewed, replaced, substituted, or refunded (plus the amount of reasonable expenses incurred in connection therewith); (2) the Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being extended, refinanced, renewed, replaced or refunded; and (3) the Refinancing Indebtedness shall be deemed pari passu with or subordinate in right of payment to the Indebtedness being extended, refinanced, renewed, replaced or refunded, (i) intercompany Indebtedness between or among either Issuer and/or any of their respective Subsidiaries or any of them, (j) Hedging Obligations that are incurred for the purpose of fixing or hedging currency risks, or interest rates with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be contractually subordinated outstanding. The foregoing clauses (a) through (j) are independent exceptions to the covenant set forth in the preceding paragraph and are additive in nature. Limitations set forth in any one of such clauses (a) through (j) or in the definitions used therein shall not be applicable to any other such clauses or any other such definitions. The Indebtedness solely by virtue of being unsecuredpermitted to be incurred pursuant to the foregoing clauses (a) through (j) may be incurred pursuant to one agreement or several agreements with one lender or several lenders.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Corporation 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and the Corporation shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); stock, provided, however, that the Company Corporation or any of its Restricted Subsidiary Subsidiaries may incur Subordinated Indebtedness (including or Acquired Debt) Debt or issue shares of preferred stock (including Disqualified Stock) if, in each caseand the Guarantors may incur Subordinated Indebtedness or Acquired Debt or issue preferred stock, (1) if the Company's Indebtedness Consolidated Total Debt to Adjusted Operating Cash Flow Consolidated EBITDA Ratio as of for the Corporation’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Subordinated Indebtedness or Acquired Debt is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would not have been 7.0 greater than 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Subordinated Indebtedness or Acquired Debt had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period; provided further, that, notwithstanding Section 5.19, any Restricted Subsidiary that ceases to be a Wholly-Owned Subsidiary of the date Corporation as a result of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Restricted Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated issuing Capital Stock pursuant to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness this Section 5.7 shall be deemed to be contractually subordinated to remain a Restricted Subsidiary for all purposes under this Indenture. The first paragraph of this Section 5.7 shall not prohibit the incurrence of any other of the following items of Indebtedness solely by virtue or the issuance of being unsecured.any of the following Disqualified Stock (collectively, “Permitted Debt”):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary that is Disqualified Stock); provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and any of its Restricted Subsidiaries may issue shares of preferred stock that is Disqualified Stock if after giving effect to such issuance or incurrence on a pro forma basis, the sum of (including Disqualified Stockx) ifIndebtedness of the Company and its Restricted Subsidiaries, in each caseon a consolidated basis, (1y) the Company's Indebtedness liquidation value of outstanding preferred stock of Restricted Subsidiaries and (z) the aggregate amount payable by the Company and its Restricted Subsidiaries, on a consolidated basis, upon redemption of Disqualified Stock to Adjusted Operating Cash Flow Ratio as the extent such amount is not included in the preceding clause (y) shall be less than the product of Annualized Pro Forma EBITDA for the latest fiscal quarter 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 or Disqualified Stock is issued would have been 7.0 to 1 or lessmultiplied by 7.0, 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, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredquarter.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "“incur"”; with “incurrence” having a correlative meaning) any Indebtedness (including Acquired Debt) and shall not), and shall the Company will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and issue shares of preferred stock Disqualified Stock, and its Restricted Subsidiaries may incur Indebtedness (including Disqualified StockAcquired Debt) if, in each caseand issue preferred stock, (1x) for so long as any Class D Preferred Units are outstanding, if the Total Leverage Ratio is no more than 4.75 to 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) and (y) thereafter, if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of ’s Trailing Four Quarters immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical termsTrailing Four Quarter Period; provided, howeverfurther, that no the aggregate principal amount of Indebtedness of non-Guarantor Subsidiaries outstanding pursuant to this Section 4.09(a) shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecurednot exceed $50.0 million.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock and the Company’s Restricted Subsidiaries may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of ’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom). The first paragraph of this Section 4.09 shall not, prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”): (i) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities, in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of: (A) $1,250.0 million; and (B) 30.0% of the Company’s Consolidated Net Tangible Assets as if of the additional date of such incurrence; (ii) (A) the incurrence by the Company or any of its Restricted Subsidiaries of Existing Indebtedness had been incurredor (B) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under the New Real Estate Facility (whether or not issued and outstanding as of the Issue Date) in each case of this clause (B), in amounts contemplated by the documentation for the New Real Estate Facility at the date of closing of the LHM Acquisition; (iii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the Issue Date; (iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under Floor Plan Facilities; (v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund or refinance any Indebtedness incurred pursuant to this clause (v), not to exceed, at any time outstanding, the greater of $200.0 million and 2.75% of Consolidated Total Assets as of the date of such incurrence; (vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this covenant or clauses (ii), (iii), or (vi) of this paragraph; provided that to the extent such Permitted Refinancing Indebtedness refinances (x) other than the Indebtedness junior to the Notes or a Guarantee, as applicable, such Refinancing Indebtedness is junior to the Notes or the Guarantee, as applicable, or (y) Disqualified Stock or preferred stock had been issuedstock, such Refinancing Indebtedness is Disqualified Stock or preferred stock; (vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and its Restricted Subsidiaries; provided, that (A) if the Company or any Guarantor is the obligor on such Indebtedness owing to a Restricted Subsidiary, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee, in the case of a Guarantor; and (B) (I) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (II) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (vii); (viii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes; (ix) (A) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary that was permitted to be incurred by another provision of this Section 4.09 and (B) Indebtedness incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company or any Restricted Subsidiary not to exceed for the avoidance of doubt, in the case of this clause (B), at any time outstanding, the greater of (x) $150.0 million and (y) 2.0% of the Consolidated Total Assets as of the date of such calculation incurrence; (x) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence; (xi) Obligations in respect of (A) performance, bid and surety or appeal bonds, letters of credit, completion guarantees, self-insurance obligations or workers compensation claims in the ordinary course of business and (2B) no Default agreements providing for indemnification, adjustment of purchase price, earn-outs or Event similar obligations incurred in connection with the acquisition or disposition of Default would occur any business, assets or subsidiary; (xii) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business; (xiii) Indebtedness consisting of the financing of insurance premiums; (xiv) Indebtedness consisting of Guarantees incurred in the ordinary course of business under repurchase agreements or similar agreements in connection with the financing of sales of goods in the ordinary course of business; (xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under Mortgage Loans in an amount incurred pursuant to this clause (xv) not to exceed the greater of $525.0 million and 7.0% of Consolidated Total Assets as a consequence thereof. The of the date of such incurrence at any time outstanding; (xvi) the incurrence by the Company shall notor any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, and shall not permit any Subsidiary Guarantor toas applicable) which, incur any Indebtedness that is contractually subordinated to any when taken together with all other Indebtedness of the Company or and its Restricted Subsidiaries outstanding on the date of such incurrence and incurred pursuant to this clause (xvi) does not exceed the greater of $450.0 million and 6.0% of Consolidated Total Assets as of the date of such incurrence; and (xvii) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or a Restricted Subsidiary Guarantorincurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or consolidation, either: (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 4.09, or (B) the Fixed Charge Coverage Ratio is greater than or equal to the Fixed Charge Coverage Ratio immediately prior to such acquisition, merger or consolidation. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xvii) of the preceding paragraph, and may also be entitled to be incurred in whole or in part pursuant to the first paragraph of this Section 4.09, the Company will be permitted to divide and classify such item of Indebtedness on the date of its incurrence and later divide and reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09; for the avoidance of doubt, any Incurrence of Indebtedness may, if applicable, be classified in part as being Incurred and outstanding under the first paragraph of this Section 4.09 and in part as being Incurred and outstanding under one or more categories of Permitted Debt. Indebtedness that was outstanding on the Issue Date under Credit Facilities under clause (i) of the definition of Permitted Debt and Indebtedness that was outstanding under clause (ii)(B) of the definition of Permitted Debt as of the initial closing date of the LHM Acquisition (whether for all or less than all of the assets currently intended to be acquired) will be deemed to have been incurred on such date in reliance on the exception provided by clause (i) or clause (ii)(B), as applicable, of the case definition of Permitted Debt and unless repaid may benot be reclassified. Accrual of interest and dividends, unless such accretion or amortization of original issue discount, the payment of interest on any Indebtedness is also contractually subordinated in the form of additional Indebtedness with the same terms, changes to amounts outstanding in respect of Hedging Obligations solely as a result of fluctuations in interest rates, the Notes assumption or guarantee of Indebtedness of a Restricted Subsidiary by the Company or another Restricted Subsidiary Guarantee and the payment of such Subsidiary Guarantor, as dividends on Disqualified Stock or preferred stock of Restricted Subsidiaries in the case may be, on substantially identical terms; provided, however, that no Indebtedness shall form of additional shares of the same class of Disqualified Stock or preferred stock of Restricted Subsidiaries will not be deemed to be contractually subordinated to any other an incurrence of Indebtedness solely by virtue or an issuance of being unsecuredDisqualified Stock or preferred stock of Restricted Subsidiaries for purpose of this Section 4.09.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incurINCUR") any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock Interests and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock Equity Interests (other than Qualified Subsidiary Stockincluding Disqualified Interests); providedPROVIDED, howeverHOWEVER, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares Disqualified Interests and any of the Company's Restricted Subsidiaries that is a Guarantor may incur Indebtedness or issue preferred stock Equity Interests (including Disqualified StockInterests) if, in each case, (1) the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is Equity Interests are issued would have been 7.0 at least 2 to 1 or less1, 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 Equity Interests had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereoffour-quarter period. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness (nor will the Guarantors guarantee any such Indebtedness) that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; providedPROVIDED, howeverHOWEVER, that no Indebtedness of the Company shall be deemed to be contractually subordinated to any other Indebtedness of the Company solely by virtue of being unsecured.. The foregoing provisions shall not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuers shall not, and shall not permit any of its their respective Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and the Issuers shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted their respective Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; providedPROVIDED, howeverHOWEVER, that the Company Issuers or any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of Consoltex Group for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1, 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, as at the beginning of such four-quarter period: PROVIDED FURTHER that no guarantee may be incurred pursuant to the provisions of this paragraph, unless the guaranteed Indebtedness is also incurred pursuant to this paragraph. The foregoing limitations shall not apply to (a) the incurrence by either Issuer or any Guarantor of Indebtedness pursuant to the Credit Agreement or otherwise in an aggregate principal amount not to exceed the Borrowing Base, (b) Indebtedness, not covered by any other clause of this paragraph, outstanding on the date of this Indenture, (c) Indebtedness arising out of letters of credit, performance bonds, surety bonds and bankers' acceptances incurred in the ordinary course of business; PROVIDED that if any unpaid reimbursement obligation under any such calculation instrument is outstanding for more than 10 consecutive business days, such obligation shall not be permitted to be incurred under this clause (c), (d) Indebtedness consisting of guarantees (other than guarantees relating to money borrowed), indemnities or obligations in respect of purchase price adjustments, in each case, in connection with the acquisition of assets permitted under this Indenture, (e) additional Indebtedness of up to $10 million in aggregate principal amount at any one time outstanding, (f) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes, (g) Indebtedness of a Foreign Subsidiary existing at the time it is acquired (1) that is not incurred in contemplation of the acquisition of such Foreign Subsidiary and (2) no Default that is non-recourse to the Issuers and their respective Subsidiaries except to the assets of such Foreign Subsidiary (for purposes of this clause (g), Indebtedness of a Foreign Subsidiary existing at the time it is acquired includes Indebtedness incurred pursuant to credit facilities in existence upon the acquisition of such Foreign Subsidiary; PROVIDED that such Indebtedness meets the requirements of clauses (1) and (2) of this clause (g)), (h) the incurrence by the Issuers and their respective Subsidiaries of Indebtedness issued in exchange for, or Event the proceeds of Default would occur as a consequence thereof. The Company shall notwhich are used to extend, refinance, renew, replace or refund Indebtedness referred to in clauses (b), (f) and (g) above (the "Refinancing Indebtedness"); PROVIDED, HOWEVER, that (1) the principal amount of such Refinancing Indebtedness shall not permit exceed the principal amount of Indebtedness so extended, refinanced, renewed, replaced, substituted, or refunded (plus the amount of reasonable expenses incurred in connection therewith); (2) the Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being extended, refinanced, renewed, replaced or refunded; and (3) the Refinancing Indebtedness shall be pari passu with or subordinate in right of payment to the Indebtedness being extended, refinanced, renewed, replaced or refunded, (i) intercompany Indebtedness between or among either Issuer and/or any Subsidiary Guarantor toof their respective Subsidiaries or any of them, incur (j) Hedging Obligations that are incurred for the purpose of fixing or hedging currency risks, or interest rates with respect to any floating rate Indebtedness that is contractually subordinated permitted by the terms of this Indenture to be outstanding. The foregoing clauses (a) through (j) are independent exceptions to the covenant set forth in the preceding paragraph and are additive in nature. Limitations set forth in any one of such clauses (a) through (j) or in the definitions used therein shall not be applicable to any other such clauses or any other such definitions. The Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated permitted to be incurred pursuant to the Notes foregoing clauses (a) through (j) may be incurred pursuant to one agreement or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredseveral agreements with one lender or several lenders.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and that the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Disqualified Stock); provided, however, that the Company or any Restricted a Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2 to 1 or less1, 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, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereoffour-quarter period. The Company shall not, and shall not permit any Subsidiary Guarantor to, shall not incur any Indebtedness (other than Existing Indebtedness) that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may berespectively, unless such Indebtedness is also contractually subordinated to the Senior Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may berespectively, on substantially identical terms; provided, however, that no Indebtedness of the Company or any Subsidiary Guarantor shall be deemed to be contractually subordinated to any other Indebtedness of the Company or such Subsidiary Guarantor, respectively, solely by virtue of being unsecured.. The provisions of the first paragraph of this covenant shall not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries toRestricted Subsidiary to Incur, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired DebtIndebtedness) and shall not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Preferred Stock); providedPROVIDED, howeverHOWEVER, that the -38- Company or any and its Restricted Subsidiary Subsidiaries may incur Incur Indebtedness (including Acquired Debt) or Indebtedness), and the Restricted Subsidiaries may issue shares Preferred Stock, if on the date of preferred stock (including Disqualified Stock) if, in each casesuch Incurrence and after giving effect thereto, (1i) the Company's Indebtedness Consolidated Adjusted Debt to EBITDA Ratio is less than 6.00 to 1.00 and (ii) the Consolidated Adjusted Operating Cash Flow Senior Debt to EBITDA Ratio is less than 4.00 to 1.00 (this test being referred to herein as the "Leverage Test"). For the purpose of the date on which calculation of the Leverage Test, with respect to any period included in such Indebtedness is incurred or calculation, Consolidated EBITDA, the components of Consolidated Interest Expense, and Consolidated Adjusted Debt and Capital Expenditures shall be calculated with respect to such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, determined period by the Company in good faith on a pro forma basis (including a pro forma application of the net proceeds therefromand consistent with Permitted Adjustments), as if giving effect to any Permitted Acquisition, Asset Disposition or Incurrence or redemption or repayment of Indebtedness that has given rise to the additional Indebtedness had been incurredneed for such calculation, has occurred during such period or the Disqualified Stock has occurred after such period and on or preferred stock had been issued, as the case may be, as of prior to the date of such calculation (each a "Subject Transaction"), including, with regard to Permitted Acquisitions and (2) no Default Asset Dispositions, by using the historical financial statements of any business so acquired or Event of Default would occur as a consequence thereof. The Company shall not, to be acquired or sold or to be sold and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness the consolidated financial statements of the Company and its Restricted Subsidiaries which shall be reformulated as if such Subject Transaction, and any Indebtedness Incurred or redeemed or repaid in connection therewith, had been consummated or Incurred or redeemed or repaid at the beginning of such Subsidiary Guarantor, as the case may be, unless period (and assuming that such Indebtedness is also contractually subordinated bears interest during any portion of the applicable measurement period prior to the Notes or relevant acquisition at the Subsidiary Guarantee weighted average of the interest rates applicable to outstanding revolving loans under the Credit Agreement Incurred during such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredperiod).

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock and the Company's Subsidiaries may incur Indebtedness or issue shares of preferred stock if the Company's Debt to Adjusted Operating Cash Flow Ratio as at the time of the date on which incurrence of such Indebtedness is incurred or the issuance of such Disqualified Stock or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, 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 issuedstock, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the date use of such calculation and (2) the proceeds therefrom as if the same had occurred at the beginning of the most recently ended four full fiscal quarter period of the Company for which financial statements have been furnished or are required to be furnished to Holders of the Notes in reports pursuant to Section 5.03 of the Original Indenture, would have been no Default or Event of Default would occur as a consequence thereofgreater than 6.0 to 1. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured.. The provisions of the first paragraph of this Section 5.05 will not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Issuers will not, and shall will not permit any of its Express’ Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and shall the Issuers will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Express’ Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary Issuers may incur Indebtedness (including Acquired Debt) or issue shares Disqualified Stock, and any Restricted Subsidiary of preferred stock Express may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for Express’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical termsfour-quarter period; provided, howeverfurther, that no Restricted Subsidiaries of Express that are not Guarantors may not incur Indebtedness shall or issue any shares of 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 $25.0 million of Indebtedness or preferred stock of Restricted Subsidiaries of Express that are not Guarantors would be deemed outstanding pursuant to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredthis Section 4.09(a) and Sections 4.09(b)(13) and (20) hereof at such time.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); providedstock, however, PROVIDED that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock, and the Company's Restricted Subsidiaries may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) case if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.25 to 1 or less1, determined on a pro forma PRO FORMA basis (including a pro forma PRO FORMA application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"): (i) the incurrence by the Company and any of its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (A) $290.0 million or (B) the Borrowing Base; (ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; (iii) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of such calculation this Indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to the Registration Rights Agreement; (2iv) no Default the incurrence by the Company or Event any of Default would occur as a consequence thereof. The Company shall notits Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, and shall not permit mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any Subsidiary Guarantor topart of the purchase price or cost of construction or improvement of property, incur any Indebtedness that is contractually subordinated to any other Indebtedness plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (iv), not to exceed $10.0 million at any time outstanding; (v) the incurrence by the Company or any of such Subsidiary Guarantorits Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee net proceeds of such Subsidiary Guarantorwhich are used to refund, as the case may be, on substantially identical terms; provided, however, refinance or replace Indebtedness (other than intercompany Indebtedness) that no Indebtedness shall be deemed was permitted by this Indenture to be contractually subordinated to any other Indebtedness solely by virtue incurred under the first paragraph of being unsecured.this covenant or clauses (ii), (iii), (iv), (v) or (x) of

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall (prior to the Guarantee Effective Date) and the Parent (from and after the Guarantee Effective Date) will not, and shall will 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt), and the Company (prior to the Guarantee Effective Date) and shall not, and shall the Parent (from the Guarantee Effective Date) will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the CompanyParent or the Company, as applicable may incur Indebtedness (including Acquired Debt), the Company (prior to the Guarantee Effective Date) or any Restricted the Parent (from the Guarantee Effective Date) may issue Disqualified Stock, and the Subsidiary Guarantors (and the Company, following the Guarantee Effective Date) may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock, and the Guarantors may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of ’s (or the Parent’s from the Guarantee Effective Date) most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredfour-quarter period.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Parent Guarantor will not, and shall will not cause or 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and shall the Parent Guarantor will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary Parent Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for the Parent Guarantor’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.0 to 1 or less1.0, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event four quarter period. Restricted Subsidiaries that are not Guarantors may only incur Indebtedness pursuant to this paragraph if, after giving pro forma effect to such incurrence of Default would occur as a consequence thereof. The Company shall notIndebtedness, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other the aggregate amount of Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated Restricted Subsidiaries that are not Guarantors incurred pursuant to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredthis paragraph would not exceed $35.0 million.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Issuers will not, and shall will not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") incur any Indebtedness (including Acquired Debt) and shall not), and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall the Issuers will not permit any of its their Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Preferred Stock); provided, however, (i) that the Company or any Restricted Subsidiary Issuers may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for the Issuers’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) (the “Issuer Exception”), (ii) Publishing may incur Indebtedness (including Acquired Debt) and may issue Preferred Stock if the Fixed Charge Coverage Ratio for Publishing’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom (the “Publishing Exception”) and (iii) Houghton Mifflin and any Restricted Subsidiary of Houghton Mifflin may incur Indebtedness (including Acquired Debt) and may issue Preferred Stock if the Fixed Charge Coverage Ratio for Houghton Mifflin’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Preferred Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) (the “Houghton Exception” and, together with the Issuer Exception and the Publishing Exception, the “Coverage Ratio Exception”), as if the additional Indebtedness had been incurred, incurred or the Disqualified Preferred Stock or preferred stock had been issued, as the case may be, as and the application of proceeds therefrom had occurred at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredfour-quarter period.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Parent will not, and shall will 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and shall the Parent will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Company or and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and issue shares of preferred stock (including Disqualified Stock) ifstock, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for the Parent’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical termsfour-quarter period; provided, however, that no the aggregate amount of Indebtedness (including Acquired Debt) and preferred stock that the Parent’s non-Guarantor Restricted Subsidiaries (other than the Company) may incur under this paragraph shall not exceed the greater of (x) $50.0 million and (y) 7.50% of Parent’s Consolidated Tangible Net Worth at any time outstanding; provided, further, that a change in GAAP that results in an obligation of the Parent or any of the Parent’s Restricted Subsidiaries that exists at the time of such change, and is not theretofore classified as Indebtedness, becoming Indebtedness shall not be deemed to be contractually subordinated to any other Indebtedness solely by virtue an incurrence of being unsecuredsuch Indebtedness.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will 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, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), other than Permitted Debt, and the Company shall not permit any Subsidiary Guarantor toissue, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue issue, any shares of preferred stock (other than Qualified Subsidiary Disqualified Stock); provided, however, that the Company or any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.00 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the such additional Indebtedness had been incurred, or the such Disqualified Stock or preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period. The provisions of the date first paragraph of this Section 5.09 shall not apply to the incurrence of any Permitted Debt. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 5.09. In the case an Unrestricted Subsidiary incurs Non-Recourse Indebtedness and any such Non-Recourse Indebtedness ceases to be Non-Recourse Indebtedness of such calculation and (2) no Default or Event Unrestricted Subsidiary, then such event shall be deemed to constitute an incurrence of Default would occur as Indebtedness by a consequence thereofRestricted Subsidiary that is subject to this Section 5.09. The Company shall not, and shall will not permit any Subsidiary Guarantor to, incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall of the Company will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured. For purposes of determining compliance with this Section 5.09, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described above or is entitled to be incurred pursuant to the first paragraph of this Section 5.09, the Company will, in its sole discretion, classify (or later reclassify) in whole or in part such item of Indebtedness in any manner that complies with this Section 5.09 and such item of Indebtedness or a portion thereof may be classified (or later reclassified) in whole or in part as having been incurred under more than one of the applicable clauses or pursuant to the first paragraph of this Section 5.09. Notwithstanding the foregoing, no Pipeline Subsidiary shall incur or maintain any Indebtedness or grant or become or remain subject to any Lien upon any of its property securing Indebtedness, except (i) liabilities outstanding on the Closing Date in respect of the Company's outstanding 9% Senior Subordinated Notes due 2008, 9-5/8% Senior Subordinated Notes due 2008 and 9-5/8% Senior Subordinated Notes due 2012, (ii) guarantees of the Notes (including any additional Notes) and Term Loans (including any additional Term Loans) and Liens securing Secured Obligations and (iii) Permitted Liens.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will 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, with respect to (collectively, "incur") incur any Indebtedness (including Acquired Debt) and shall not), and shall the Company will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Preferred Stock); provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock, and any Guarantor may incur Indebtedness (including Disqualified Acquired Debt) or issue Preferred Stock) if, in each case, (1) if the Consolidated Leverage Ratio of the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued , would have been 7.0 no more than 1.1 to 1 or less1.0, 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, as of the date of ) after giving effect to such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur incurrence; provided further that any Indebtedness incurred pursuant to this Section 4.09(a) shall be (i) incurred pursuant to a reserve-based credit facility with lenders that is contractually include commercial banks that engage in oil and gas reserve based lending in the ordinary course of business, (ii) subordinated to any other Indebtedness in right of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated payment to the Notes or (iii) incurred or assumed in connection with an acquisition of assets or Equity Interests or an Investment (provided that, in the Subsidiary Guarantee case of Indebtedness incurred (but not assumed (so long as such assumed Indebtedness was not incurred in contemplation of such Subsidiary Guarantoracquisition or Investment)) in connection with an acquisition or Investment, as such Indebtedness (A) has a final maturity date 180 days or more after the case may befinal maturity date of the Notes and (B) shall not be subject to scheduled amortization prior to maturity); provided further that, on substantially identical terms; providedwith respect to any incurrence under this Section 4.09(a) after the Issue Date, however, the Company shall have delivered to the Trustee an Officer’s Certificate signed by the chief financial officer of the Company certifying that no Indebtedness the requirements of this Section 4.09(a) have been complied with (including reasonably detailed calculations thereof) in connection with any such incurrence or issuance. Upon (i) the request of any Holder of 10% or more of the outstanding principal amount of the Notes (which request shall be deemed in writing) and (ii) delivery by such Holder to be contractually subordinated the Trustee and the Company of a certificate in form and substance substantially the same as Exhibit E attached hereto, the Trustee shall deliver a copy of such Officer’s Certificate to any other Indebtedness solely by virtue of being unsecuredsuch Holder.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; providedPROVIDED, howeverHOWEVER, that the Company may incur Indebtedness (including Acquired Debt) or any issue shares of Disqualified Stock and the Company's Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) if the Company's Indebtedness Debt to Adjusted Operating Cash Flow Ratio as at the time of the date on which incurrence of such Indebtedness is incurred or the issuance of such Disqualified Stock or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, 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 issuedstock, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the date use of such calculation and (2) the proceeds therefrom as if the same had occurred at the beginning of the most recently ended four full fiscal quarter period of the Company for which financial statements have been furnished or are required to be furnished to Holders of the Notes in reports pursuant to Section 4.03 hereof, would have been no Default or Event of Default would occur as a consequence thereofgreater than 6.0 to 1. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; providedPROVIDED, howeverHOWEVER, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured.. The first paragraph of this Section 4.09 will not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Each of the Borrower and the Guarantor shall not, and the Guarantor shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall notIndebtedness, and the Guarantor shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and Stock. (b) The provisions of Section 6.02(a) hereof shall not permit prohibit the incurrence of any of the following items of Indebtedness by (x) the Guarantor or any Restricted Subsidiary with respect to the Indebtedness set forth in subclauses (i) through (xxiii), inclusive, below or (y) the Borrower with respect to the Indebtedness set forth in subclauses (i) and (xxiv) through (xxvi), 83 inclusive, below (as applicable to the Guarantor, the Borrower or such Restricted Subsidiary, collectively, “Permitted Debt”): (i) the incurrence by the Borrower and the Guarantors of the Loans and Guarantees in the maximum aggregate principal amount provided for herein and any Permitted Refinancing Indebtedness that is incurred to renew, refund, refinance, replace, defease, extend or discharge any Indebtedness incurred pursuant to this clause (i); (ii) the incurrence by the Guarantor or any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock the Existing Indebtedness; (other than Qualified Subsidiary Stock); provided, however, that iii) the Company incurrence by the Guarantor or any of its Restricted Subsidiary may incur Subsidiaries of Capital Lease Obligations, mortgage financings or purchase money obligations incurred to finance (or to reimburse the Guarantor or any of its Restricted Subsidiaries for) all or any part of the purchase price or installation or improvement of any Aircraft Asset used in the business of the Guarantor or any of its Restricted Subsidiaries or leased by third parties, which Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, is incurred within one (1) the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, 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, as of year from the date of such calculation and purchase or installation or improvement unless otherwise permitted by clause (2xxv) hereof; provided that no junior liens shall be permitted on any such aircraft or aircraft engines unless otherwise permitted by clause (xxv) hereof; (iv) the incurrence by the Guarantor or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate consolidated (i.e. without duplication) principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause (iv), not to exceed […***…], at any time outstanding; provided that no more than […***…] of such aggregate principal amount shall constitute secured Indebtedness; (v) the incurrence by the Guarantor or any of its Restricted Subsidiaries of any new secured Indebtedness, so long as (A) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof. The Company shall notresult from giving effect to such secured Indebtedness, and (B) if, after giving effect to such secured Indebtedness, (x) the First Lien Leverage Ratio would be no greater than […***…] or (y) the First Lien Leverage Ratio would be greater than […***…], then the aggregate initial outstanding amount of such new Secured Indebtedness that would cause the First Lien Leverage Ratio to exceed […***…] shall not permit exceed […***…]; (vi) the incurrence by the Guarantor or any Subsidiary Guarantor to, incur any of its Restricted Subsidiaries of additional Indebtedness that is contractually subordinated to any other Indebtedness of secured by a junior Lien on the Company TLB Collateral (whether or of such Subsidiary Guarantor, as not the case may be, unless such Indebtedness is also Term Loan B Facility remains outstanding) and expressly contractually subordinated to the Notes or prior payment in full in cash of the Subsidiary Guarantee of such Subsidiary GuarantorIndebtedness secured by the TLB Collateral, so long as the case may be, on substantially identical terms; provided, however, that Secured Leverage Ratio would be no greater than […***…] after such additional Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.is incurred;

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, Incur, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired DebtIndebtedness) and shall not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are is not Subsidiary Guarantors a Guarantor to issue any shares of preferred stock (other than Qualified Subsidiary Preferred Stock); provided, however, that the Company or any and its Restricted Subsidiary Subsidiaries may incur Incur Indebtedness (including Acquired Debt) Indebtedness), and the Restricted Subsidiaries that are not Guarantors may issue Preferred Stock, if on the date of such Incurrence or issue shares of preferred stock (including Disqualified Stock) if, in each caseissuance and after giving effect thereto, (1x) the Company's Indebtedness Consolidated Adjusted Debt to EBITDA Ratio is less than 6.00 to 1.00 and (y) the Consolidated Adjusted Operating Cash Flow Senior Debt to EBITDA Ratio is less than 4:00 to 1:00 (this test being referred to herein as the “Leverage Test”). For the purpose of the date on which calculation of the Leverage Test, with respect to any period included in such Indebtedness is incurred or calculation, Consolidated EBITDA, the components of Consolidated Interest Expense, and Consolidated Adjusted Debt and Capital Expenditures shall be calculated with respect to such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, determined period by the Company in good faith on a pro forma basis (including a pro forma application of the net proceeds therefromand consistent with Permitted Adjustments), as if giving effect to any Permitted Acquisition, Asset Disposition or Incurrence or redemption or repayment of Indebtedness that has given rise to the additional Indebtedness had been incurredneed for such calculation, has occurred during such period or the Disqualified Stock has occurred after such period and on or preferred stock had been issued, as the case may be, as of prior to the date of such calculation (each a “Subject Transaction”), including, with regard to Permitted Acquisitions and (2) no Default Asset Dispositions, by using the historical financial statements of any business so acquired or Event of Default would occur as a consequence thereof. The Company shall not, to be acquired or sold or to be sold and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness the consolidated financial statements of the Company and its Restricted Subsidiaries which shall be reformulated as if such Subject Transaction, and any Indebtedness Incurred or redeemed or repaid in connection therewith, had been consummated or Incurred or redeemed or repaid at the beginning of such Subsidiary Guarantor, as the case may be, unless period (and assuming that such Indebtedness is also contractually subordinated bears interest during any portion of the applicable measurement period prior to the Notes or relevant acquisition at the Subsidiary Guarantee weighted average of the interest rates applicable to outstanding revolving loans under the Credit Agreement Incurred during such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredperiod).

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); provided, however, that the Company may incur Indebtedness or any issue Disqualified Stock and a Restricted Subsidiary may incur Acquired Debt if the ratio of Total Consolidated Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) to Adjusted Consolidated Operating Cash Flow for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at less than or equal to 1 or less6.0 to 1.0, 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, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereoffour-quarter period. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured.. The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company No Borrower shall, nor shall not, and shall not it permit any of its Subsidiaries Credit Party to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "“incur"”) any Indebtedness for Borrowed Money (including Acquired Debt) and shall not), and shall Parent will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Domestic Subsidiaries that are not Subsidiary Guarantors (other than any Excluded Subsidiaries) to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary Parent may incur Indebtedness for Borrowed Money (including Acquired Debt) or issue shares of preferred stock Disqualified Stock, and the other Credit Parties may incur Indebtedness for Borrowed Money (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for Parent’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness for Borrowed Money is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 1.25 to 1 or less1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness for Borrowed Money had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period, and an officer of the date of such calculation Borrower Representative has delivered to the Administrative Agent a certificate and (2) no Default or Event of Default would occur supporting data demonstrating pro forma compliance with the Fixed Charge Coverage Ratio as a consequence thereofset forth above. The Company shall not, and shall first paragraph of this covenant will not permit prohibit the incurrence of any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or following items of such Subsidiary GuarantorIndebtedness for Borrowed Money (collectively, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.“Permitted Debt”):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Holdings will not, and shall will 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and shall Holdings will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary Holdings may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock, and the Issuers and the Guarantors may incur Indebtedness (including Disqualified Stock) ifAcquired Debt), in each case, if (1x) the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for Holdings’ Applicable Measurement Period immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.00 to 1 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) or less(y) the Consolidated Total Leverage Ratio of Holdings for the Applicable Measurement Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued, as the case may be, is not greater than 3.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), in each case, as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, as at the beginning of such Applicable Measurement Period. (b) The provisions of Section 4.07(a) hereof will not prohibit the incurrence of any of the date following items of such calculation Indebtedness (collectively, “Permitted Debt”): (1) the incurrence by the Issuers and any Guarantors of Indebtedness and letters of credit under Senior Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (21) no Default or Event (with letters of Default would occur as credit being deemed to have a consequence thereof. The Company shall not, principal amount equal to the maximum potential liability of Holdings and shall its Restricted Subsidiaries thereunder) not permit any Subsidiary Guarantor to, incur any to exceed the sum of (a) $1,977,000,000 plus (b) the greater of (x) $1,000,000,000 and 100% of Consolidated EBITDA for the Applicable Measurement Period plus (c) an additional aggregate principal amount of Indebtedness (i) that is contractually subordinated to any other secured by the Collateral on a pari passu basis with the Liens securing the Notes that at the time of incurrence does not cause the Consolidated First Lien Indebtedness of Ratio for the Company Applicable Measurement Period immediately preceding the date on which such additional Indebtedness is incurred or of such Subsidiary GuarantorDisqualified Stock is issued, as the case may be, unless to exceed 2.50 to 1.00 or, in the case of Indebtedness incurred in connection with an acquisition, Investment, New Project or refinancing transaction not prohibited under this Indenture, the Consolidated First Lien Indebtedness Ratio of Holdings to exceed the greater of (x) such ratio immediately prior to such incurrence and (y) 2.50 to 1.00, (ii) that is secured by the Collateral on a junior lien basis to the Liens securing the Notes that at the time of incurrence does not cause the Consolidated Secured Indebtedness Ratio for the Applicable Measurement Period immediately preceding the date on which such additional Indebtedness is also contractually subordinated to the Notes incurred or the Subsidiary Guarantee of such Subsidiary GuarantorDisqualified Stock is issued, as the case may be, on substantially identical terms; providedto exceed 3.00 to 1.00 or, howeverin the case of Indebtedness incurred in connection with an acquisition, Investment, New Project or refinancing transaction not prohibited under this Indenture, the Consolidated Secured Indebtedness Ratio of Holdings to exceed the greater of (x) such ratio immediately prior to such incurrence and (y) 3.00 to 1.00 or (iii) that is other Indebtedness not covered by clauses (i) or (ii), that no at the time of incurrence either (A) does not cause the Consolidated Total Leverage Ratio for the Applicable Measurement Period immediately preceding the date on which such additional Indebtedness shall be deemed is incurred or such Disqualified Stock is issued, as the case may be, to exceed 3.00 to 1.00 or, in the case of Indebtedness incurred in connection with an acquisition, Investment, New Project or refinancing transaction not prohibited under this Indenture, the Consolidated Total Leverage Ratio of Holdings to exceed the greater of (x) such ratio immediately prior to such incurrence and (y) 3.00 to 1.00 or (B) does not cause the Fixed Charge Coverage Ratio for the Applicable Measurement Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued, as the case may be, to be contractually subordinated less than 2.00 to any other 1.00 or, in the case of Indebtedness solely incurred in connection with an acquisition, Investment, New Project or refinancing transaction not prohibited under this Indenture, the Fixed Charge Coverage Ratio of Holdings to be less than the lesser of (x) such ratio immediately prior to such incurrence and (y) 2.00 to 1.00; (2) the incurrence by virtue the Issuers and the Guarantors of being unsecured.Indebtedness represented by the Notes to be issued on the Issue Date and the related Note Guarantees;

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The a)The Company shall will not, and shall will not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired DebtIndebtedness) and shall not, and shall the Company will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or and any Restricted Subsidiary Note Guarantor may incur Indebtedness (including Acquired DebtIndebtedness) or and the Company may issue shares of preferred stock Disqualified Stock if: (including Disqualified Stock) if, in each case, (1) i)the Consolidated Interest Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.75 to 1 or less1.0, 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, as of at the date beginning of such calculation four-quarter period; and (2) no ii)no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; provided that no guarantee may be incurred pursuant to this paragraph, unless the guaranteed Indebtedness is incurred by the Company pursuant to this paragraph. The (b)The foregoing provisions will not apply to: (i)the incurrence (a) by the Company of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, any outstanding Indebtedness incurred pursuant to the first paragraph of this covenant, 2006 44 -66- Senior Notes, Debentures or Notes permitted under clause (ii) below, or (b) by Note Guarantors of Guarantees of Permitted Refinancing Indebtedness incurred by the Company pursuant to this clause (i) except in respect of the Debentures; (ii)the incurrence (a) by the Company of Indebtedness represented by the Notes issued on the Issue Date and exchange notes issued therefor, or (b) by Note Guarantors of any Note Guarantees in respect thereof or in respect of Additional Notes incurred in accordance with the Indenture; (iii)the incurrence by the Company of Indebtedness under the New Credit Facility in an aggregate principal amount at any time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $175 million, less the aggregate amount of all Net Proceeds of Asset Sales applied to permanently reduce the outstanding amount of such Indebtedness (and to correspondingly reduce the commitments, if any, with respect thereto) pursuant to Section 3.9, it being understood that any amounts outstanding under the New Credit Facility on the Issue Date are deemed to be incurred under this clause (iii); (iv) the incurrence by the Company or any of its Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding not to exceed the sum of (a) 50% of Eligible Inventory, plus (b) 75% of Eligible Receivables; provided that (I) the aggregate principal amount of any such Indebtedness incurred by Subsidiaries of the Company at any time outstanding shall not exceed the greater of (X) the aggregate principal amount of Advances on Purchases of Tobacco outstanding at such time and (Y) the sum of (A) 50% of Eligible Inventory of all such Subsidiaries, plus (B) 75% of Eligible Receivables of all such Subsidiaries, (II) no more than $50.0 million of such Indebtedness may be secured by Liens on assets or property of the Company's Subsidiaries and (III) none of such Indebtedness may be secured by Liens on assets or properties of the Company; (v)the incurrence by the Company or any of its Subsidiaries of Indebtedness used to fund Advances on Purchases of Tobacco, but only to the extent that the aggregate principal amount of such advances outstanding at any time, including Advances outstanding on the Issue Date, to any Person and such Person's Affiliates does not exceed 15% of the Consolidated Tangible Net Worth of the Company for the most recently ended fiscal quarter for which internal financial statements are available; (vi)the incurrence by the Company or any of its Subsidiaries of Indebtedness represented by Purchase Money Obligations or Capital Lease Obligations, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company or such Subsidiary, or any Permitted Refinancing Indebtedness thereof; provided that (a) the aggregate principal amount of any such Indebtedness does not exceed 100% of the purchase price or cost of the property to which such Indebtedness relates, (b) the Indebtedness is incurred within 180 days (or 360 days, in 45 -67- the case of such Indebtedness incurred to finance property used in the business of any of the Company's Subsidiaries that is not organized under the laws of the United States of America, any state thereof or the District of Columbia) of the acquisition, construction or improvement of such property and (c) the aggregate principal amount of such Indebtedness outstanding, together with the aggregate principal amount of Attributable Indebtedness with respect to Sale and Leaseback Transactions permitted under clause (vii) below, at any time shall not exceed $15.0 million; (vii)Attributable Indebtedness with respect to Sale and Leaseback Transactions permitted pursuant to Section 3.16; provided that the aggregate principal amount of such Indebtedness outstanding, together with the aggregate principal amount of Indebtedness permitted under clause (vi) above, at any time shall not exceed $15.0 million; (viii)(a) the incurrence by the Company or any of its Wholly Owned Subsidiaries of intercompany Indebtedness owing to the Company or any of its Subsidiaries, (b) the incurrence by any Subsidiary of the Company that is not a Wholly Owned Subsidiary of Indebtedness owing to the Company or any of its Wholly Owned Subsidiaries, or (c) the incurrence by the Company or any of its Subsidiaries of Indebtedness in an aggregate principal amount outstanding at any time not to exceed $5.0 million for the purpose of making advances to Subsidiaries that are not Wholly Owned Subsidiaries of the Company or to Joint Ventures in which the Company or any of its Subsidiaries owns an interest; provided that Indebtedness may be incurred pursuant to clauses (b) and (c) only if and to the extent that the Investment constituting such Indebtedness shall be permitted pursuant to Section 3.12; and provided further that, for purposes of clauses (a) and (b), (I) in the case of Indebtedness of the Company, such obligations and any trade payables owed by the Company to any of its Subsidiaries shall be unsecured and subordinated in case of an Event of Default in all respects to the Company's obligations pursuant to the Notes; and (II)(X) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Subsidiary of the Company and (Y) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Subsidiary of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be, to which this clause (viii) no longer applies; (ix)the incurrence by the Company or any of its Subsidiaries of Hedging Obligations; (x)the incurrence by the Company or any of its Subsidiaries of Indebtedness with respect to letters of credit issued to customers to secure an obligation to deliver tobacco for which the customer has prepaid the purchase price in cash, but only to the extent of the amount of such cash prepayment; and (xi)the incurrence by the Company or any of its Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other clause of this paragraph) in an aggregate principal amount at any time outstanding not to exceed $15.0 million. 46 -68- (c)The Company shall not, and shall not permit any Subsidiary Note Guarantor to, directly or indirectly in any event incur any Indebtedness that by its terms (or by the terms of any agreement governing such Indebtedness) is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may beCompany, unless such Indebtedness is also contractually subordinated by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate in right of payment to the Notes or the Subsidiary relevant Note Guarantee to the same extent and in the same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredthe Company or the relevant Note Guarantor. Section 3.14.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Parent will not, and shall will 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and shall Parent will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary Parent may incur Indebtedness (including Acquired Debt) or issue shares Disqualified Stock, and any Restricted Subsidiary of preferred stock Parent may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for Parent’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical termsfour-quarter period; provided, howeverfurther, that no Restricted Subsidiaries of Parent that are not the Issuer or Subsidiary Guarantors and are not Foreign Subsidiaries may not incur Indebtedness shall or issue any shares of 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 $25.0 million of Indebtedness or preferred stock of Restricted Subsidiaries of Parent that are not Guarantors would be deemed outstanding pursuant to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredthis Section 4.09(a) and Sections 4.09(b)(17) and (19) hereof at such time.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall the Company will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company may incur Indebtedness and may permit a Restricted Subsidiary to incur Indebtedness if at the time of such incurrence and after giving effect thereto the Leverage Ratio would be less than 6.5 to 1.0. The foregoing limitations will not apply to (a) the incurrence by the Company or any Restricted Subsidiary may incur of Senior Bank Debt in an aggregate amount not to exceed $100.0 million at any one time outstanding, (b) the issuance by the Restricted Subsidiaries of Subsidiary Guarantees, (c) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness, (d) the issuance by the Company of the Notes, (e) the incurrence by the Company and its Restricted Subsidiaries of Capital Lease Obligations and/or additional Indebtedness constituting purchase money obligations up to an aggregate of $5.0 million at any one time outstanding, provided that the Liens securing such Indebtedness constitute Permitted Liens, (including Acquired Debtf) the incurrence of Indebtedness between (i) the Company and its Restricted Subsidiaries and (ii) the Restricted Subsidiaries, (g) Hedging Obligations that are incurred for the purpose of fixing or issue hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding, (h) the incurrence by the Company and its Restricted Subsidiaries of Indebtedness arising out of letters of credit, performance bonds, surety bonds and bankers' acceptances incurred in the ordinary course of business up to an aggregate of $5.0 million at any one time outstanding, (i) the incurrence by the Company and its Restricted Subsidiaries of Indebtedness consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of preferred stock Capital Stock, and (including Disqualified Stock) if, in each case, (1j) the Company's incurrence by the Company and its Restricted Subsidiaries of Refinancing Indebtedness to Adjusted Operating Cash Flow Ratio as of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredin exchange for, or the Disqualified Stock proceeds of which are used to repay, redeem, defease, extend, refinance, renew, replace or preferred stock had been issuedrefund, as the case may be, as of the date of such calculation and Indebtedness referred to in clauses (2b) no Default or Event of Default would occur as a consequence thereof. The Company shall notthrough (e) above, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredthis clause (j).

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall ), the Company will not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are to, issue any Disqualified Stock, and the Company will not Subsidiary Guarantors permit any of its Restricted Subsidiaries to issue any other shares of preferred stock (other than Qualified Subsidiary Preferred Stock); provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or other shares of preferred stock Preferred Stock, if (including i) in the case of the incurrence of Indebtedness or issuance of Disqualified Stock by the Company or any Restricted Subsidiary of the Company, as of the date of such incurrence or issuance and after giving effect thereto and to the application of proceeds therefrom, the Company’s Debt to Assets Ratio would not exceed 0.8 to 1.0, (ii) in the case of the incurrence of Indebtedness or issuance of Disqualified Stock by Venoco or any Restricted Subsidiary of Venoco, in addition to compliance with clause (i) above, as of the date of such incurrence or issuance and after giving effect thereto and to the application of proceeds therefrom, Venoco’s Debt to Assets Ratio would not exceed 0.6 to 1.0, and (iii) in the case of the issuance of shares of Preferred Stock (other than Disqualified Stock) if, in each case, (1) by any Restricted Subsidiary of the Company's Indebtedness to Adjusted Operating Cash Flow , the Company’s Fixed Charge Coverage Ratio as of for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred or such preferred stock or Disqualified shares of Preferred Stock is are issued would have been 7.0 at least 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness shares of Preferred Stock had been incurred, or issued at the Disqualified Stock or preferred stock had been issued, as the case may be, as of the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredfour-quarter period.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incurINCUR") any Indebtedness (including Acquired Debt) and shall not), and shall the Issuer will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall the Issuer will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of Disqualified Stock or preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that (x) the Company or any Restricted Subsidiary Issuer may incur Indebtedness (including Acquired Debt) or issue shares Disqualified Stock and any of preferred stock its Restricted Subsidiaries (other than Nortek and its Restricted Subsidiaries) may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock) ifStock or preferred stock, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of the Issuer for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.00 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period, and (y) Nortek and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or preferred stock, if the Fixed Charge Coverage Ratio of Nortek for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.00 to 1, determined on a pro forma basis (including a pro forma application of the date of such calculation and (2) no Default net proceeds therefrom), as if the additional Indebtedness had been incurred or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company Disqualified Stock or of such Subsidiary Guarantorpreferred stock had been issued, as the case may be, unless such Indebtedness is also contractually subordinated to at the Notes or the Subsidiary Guarantee beginning of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredfour-quarter period.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock and the Guarantors may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of ’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”): (1) the incurrence by the Company and any Restricted Subsidiary of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $950.0 million less the aggregate amount of all (i) Secured Indebtedness incurred in reliance on Section 4.12(a)(1) and (ii) Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay permanently any term Indebtedness under a Credit Facility or to repay permanently any revolving credit Indebtedness under a Credit Facility and effect a corresponding permanent commitment reduction thereunder pursuant to Section 4.10 hereof and (y) the maximum principal amount of Indebtedness that could be incurred such calculation that after giving effect to such incurrence, the Secured Leverage Ratio of the Company would be no greater than 3.25 to 1.00 (calculated assuming all Indebtedness incurred under this clause (1) is secured and without netting the cash proceeds of any such Indebtedness); (2) no Default the incurrence by the Company and any of its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by the Company and any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, industrial revenue bonds, economic development loans and purchase money obligations, in each case, incurred for the purpose of financing all or Event any part of Default would occur as a consequence thereof. The Company shall notthe purchase price or cost of design, and shall not permit any Subsidiary Guarantor todevelopment, incur any Indebtedness that is contractually subordinated to any other Indebtedness construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries; provided that the aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (3), shall not exceed the greater of (x) $75.0 million and (y) 5.0% of Consolidated Total Assets; (4) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was -52- permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (5), (14) or (17) of this Section 4.09(b); (5) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and (B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, shall be deemed, in each case, to constitute an incurrence of such Subsidiary GuarantorIndebtedness by the Company or such Restricted Subsidiary, as the case may be, unless that was not permitted by this clause (5); (6) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and (B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, shall be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (6); (7) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and entered into for bona fide hedging purposes (and not for speculative purposes) as determined in good faith by the Board of Directors or senior management of the Company; (8) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is also contractually subordinated to or pari passu with the Notes Notes, then the Guarantee shall be subordinated or the Subsidiary Guarantee of such Subsidiary Guarantorpari passu, as applicable, to the case may besame extent as the Indebtedness guaranteed; (9) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, on substantially identical termsincluding without limitation letters of credit in respect of workers’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that no either 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 or self-insurance; (10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness shall be deemed to be contractually subordinated to any in respect of workers’ compensation claims, health and other Indebtedness solely by virtue types of being unsecured.social security benefits, unemployment and other self-insurance obligations, property, casualty or liability insurance or other similar bonds, the financing of insurance premiums in the ordinary course of business, bankers’ acceptances, performance, surety, judgment, appeal, bid and performance bonds, cash management obligations and netting, overdraft

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Issuers will not, and shall will not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) other than Permitted Debt and shall not, and shall the Issuers will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its their Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stockto an Issuer or another Restricted Subsidiary); provided, however, that the Company or any Restricted Subsidiary Issuers may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and any of the Issuers' Restricted Subsidiaries may incur Indebtedness or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Issuers' Leverage Ratio as at the time of the date on which incurrence of such Indebtedness is incurred or the issuance of such Disqualified Stock or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, 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 issuedstock, as the case may be, as after giving pro forma effect to such incurrence or issuance and to the use of the date of proceeds therefrom would have been no greater than (a) 7.0 to 1, if such calculation incurrence or issuance is on or prior to December 31, 2000, and (2b) no Default 6.5 to 1, if such incurrence or Event of Default would occur as a consequence thereofissuance is after December 31, 2000. The Company shall not, and shall Issuers will not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, Issuers unless such Indebtedness is also contractually subordinated in right of payment to the Senior Discount Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness of the Issuers shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuers solely by virtue of being unsecured.. The provisions of the first paragraph of this covenant shall not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) and the Company's Restricted Subsidiaries may incur Indebtedness and, subject to Adjusted Operating Cash Flow Section 4.18 hereof, issue preferred stock if the Fixed Charge Coverage Ratio as of for the Company's most recently ended six full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such six-quarter period. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest rate on such Indebtedness shall be calculated as of if the weighted average interest rate that would have been applicable to such Indebtedness determined over the latest 12-month period ending on the last calendar month immediately prior to the date of determination had been the applicable rate on such calculation and Indebtedness for the entire period (2) no Default taking into account any interest rate swap agreement, interest rate cap agreement or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated other financial agreement or arrangement designed to any other Indebtedness of protect the Company or any of its Restricted Subsidiaries against fluctuations in interest rates (including any agreement that exchanges a fixed rate interest obligation for a floating rate interest obligation) applicable to such Subsidiary GuarantorIndebtedness if such agreement or arrangement has a remaining term in excess of 12 months). The first paragraph of this Section 4.09 shall not apply to the incurrence of any of the following items of Indebtedness, Disqualified Stock or preferred stock, as the case may beapplicable (collectively, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured."Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredincurred , or the Disqualified Stock or preferred stock had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereoffour-quarter period. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness (other than Existing Indebtedness) that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may berespectively, unless such Indebtedness is also contractually subordinated in right of payment to the Senior Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may berespectively, on substantially identical terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or such Subsidiary Guarantor, respectively, solely by virtue of being unsecured.. The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and that the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock and the Company's Subsidiaries may incur Indebtedness or issue shares of preferred stock if the Company's Debt to Adjusted Operating Cash Flow Ratio as at the time of the date on which incurrence of such Indebtedness is incurred or the issuance of such Disqualified Stock or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, 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 issuedstock, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the date use of the proceeds therefrom as if the same had occurred at the beginning of the most recently ended four full fiscal quarter period of the Company for which financial statements have been filed with the SEC, would have been no greater than (a) 6.0 to 1, if such calculation incurrence or issuance is on or prior to Xxxxx 00, 0000, (x) 5.75 to 1, if such incurrence or issuance is on or prior to March 31, 2000 and after March 31, 1999, and (2c) no Default 5.5 to 1, if such incurrence or Event of Default would occur as a consequence thereofissuance is after March 31, 2000. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Company Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured.. The provisions of the first paragraph of this Section 4.09 will not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, that the Company and the Guarantors shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and the Company shall not permit any of its Restricted Subsidiaries that which are not Subsidiary Guarantors to issue any shares of preferred stock other than to the Company or to a Wholly Owned Restricted Subsidiary which is a Guarantor, provided that any subsequent issuance or transfer of Capital Stock that results in such Guarantor ceasing to be a Wholly Owned Restricted Subsidiary or any subsequent transfer of such preferred stock (other than Qualified to the Company or another Wholly Owned Restricted Subsidiary Stock)which is a Guarantor) will be deemed, in each case, to be the issuance of such preferred stock by the issuer thereof; provided, however, that the Company or and any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock if the Consolidated Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1.0, 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, as at the beginning of such four-quarter period. The foregoing limitations shall not apply to the incurrence of any of the date following items of such calculation and Indebtedness (2) no Default or Event of Default would occur as a consequence thereof. The Company shall notcollectively, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured."Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") Incur any Indebtedness (including Acquired Debt) and shall not, the Company and shall any Guaranteeing Subsidiary will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its their respective Restricted Subsidiaries that are not Subsidiary Guarantors Guaranteeing Subsidiaries to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; providedPROVIDED, howeverHOWEVER, that the Company or and any Restricted Guaranteeing Subsidiary may incur Incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least (x) 2.25 to 1 if such incurrence or lessissuance occurs on or before December 1, 1999, or (y) 2.5 to 1 if such incurrence or issuance occurs at any time thereafter, in each case, 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, as at the beginning of such four-quarter period. The foregoing provisions will not apply to any of the date following (each and all of such calculation and which (1) may be issued or incurred, (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, constitutes an independent exception to the foregoing provisions and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated (3) may be incurred in addition to any other Indebtedness permitted to be incurred under any other exception): (i) the incurrence by the Company or any Guaranteeing Subsidiary of Indebtedness and letters of credit pursuant to any New Credit Facility (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company or the relevant Guaranteeing Subsidiary thereunder) in an aggregate principal amount outstanding at any one time not to exceed $265.0 million (A) LESS the aggregate amount of all mandatory repayments (a "Mandatory Repayment") of the principal of any term Indebtedness under the New Credit Facility that have been made since the date of the Indenture pursuant to the amortization schedule of any New Credit Facility (other than any Mandatory Repayment made concurrently with refinancing or refunding of the New Credit Facility), (B) PLUS the Excess Amount and (C) LESS the aggregate amount of all Net Proceeds of Asset Sales applied pursuant to clause (b) or (c) of the first sentence of the second paragraph under Section 4.10 hereof to permanently reduce Indebtedness (and, in the case of revolving Indebtedness, the commitments) under the New Credit Facility or to cash collateralize letters of credit and permanently reduce commitments with respect to revolving Indebtedness under the New Credit Facility; PROVIDED that the amount of Indebtedness permitted to be incurred pursuant to the New Credit Facility in accordance with this clause (i) shall be in addition to any Indebtedness permitted to be incurred pursuant to the New Credit Facility or otherwise in reliance on, and in accordance with, clause (ix) of this paragraph; (ii) the incurrence by the Company and any Guaranteeing Subsidiary of Indebtedness represented by the Notes and any Subsidiary Guarantee; (iii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (A) represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company or such Restricted Subsidiary or (B) in connection with sale and leaseback transactions, in an aggregate principal amount with respect to this clause (iii) not to exceed $20.0 million at any time outstanding; PROVIDED THAT in no event shall the aggregate principal amount of Indebtedness incurred pursuant to clause (iii)(B) exceed $5.0 million at any time outstanding; (iv) Existing Indebtedness; (v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, Indebtedness that was permitted by the Indenture; (vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that (a) any subsequent issuance or transfer (other than for security purposes) of Equity Interests and (b) any subsequent sale or other transfer (including for security purposes other than to secure Indebtedness permitted to be incurred pursuant to clause (i) of this paragraph) of such Subsidiary GuarantorIndebtedness, in each case, that results in any such Indebtedness being held by a Person other than the Company or any of its Restricted Subsidiaries shall be deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, unless not permitted pursuant to this clause (vi); (vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging (a) interest rate risk with respect to any floating rate Indebtedness of such Person so long as such floating rate Indebtedness is permitted by the terms of the Indenture to be outstanding or (b) exchange rate risk with respect to agreements or indebtedness of such Person payable or denominated in a currency other than U.S. dollars; (viii) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt; PROVIDED, HOWEVER, that if any such Indebtedness is also contractually subordinated ceases to the Notes or the Subsidiary Guarantee be Non-Recourse Debt of an Unrestricted Subsidiary, such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company; (ix) the incurrence by the Company and any Guaranteeing Subsidiary of Indebtedness in an aggregate principal amount at any time outstanding not to exceed $25.0 million; (x) the incurrence by any Foreign Subsidiary of Indebtedness and letters of credit to fund working capital and capital expenditure requirements (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of such Foreign Subsidiary thereunder) in an aggregate maximum principal amount outstanding at any one time not to exceed $15.0 million; (xi) Obligations in respect of performance and surety bonds provided by the Company or any Guaranteeing Subsidiary in the ordinary course of business; and (xii) the incurrence or issuance by any Restricted Subsidiary of the Company of Indebtedness or preferred stock (in addition to Indebtedness and preferred stock that may be contractually subordinated incurred or issued pursuant to any other Indebtedness solely by virtue clause of being unsecuredthis paragraph) in an aggregate principal amount not to exceed $1.0 million.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incurINCUR") any Indebtedness (including Acquired DebtIndebtedness) and shall not, and shall the Company will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired DebtIndebtedness) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock if the Company's Indebtedness Debt to Adjusted Operating Cash Flow Ratio at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock, after giving pro forma effect to such incurrence or issuance as of such date and to the date on use of proceeds therefrom as if the same had occurred at the beginning of the most recently ended Reference Period of the Company for which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued internal financial statements are available, would have been 7.0 no greater than 4.0 to 1 or less, 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, as of the date of such calculation and (2) no Default or Event of Default would occur as a consequence thereof1.0. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured.. The provisions of the first paragraph of this section will not apply to the incurrence of any of the following items of Indebtedness (collectively, "PERMITTED INDEBTEDNESS"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall ); the Company will not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are to, issue any Disqualified Stock; and the Company will not Subsidiary Guarantors permit any of its Restricted Subsidiaries to issue any shares of other preferred stock (other than Qualified Subsidiary Stock)securities; provided, however, that the Company or any Restricted Subsidiary Issuer and any Guarantor may incur unsecured Indebtedness (including Acquired Debt) or the Company may issue shares of preferred stock (including Disqualified Stock) , if, in each case, (1) for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of ’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued or other preferred securities are issued, the Fixed Charge Coverage Ratio of the Company would have been 7.0 at least 2.25 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or preferred stock o had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical termsfour-quarter period; provided, however, any such Indebtedness in the form of Unsecured Notes shall (i) have a scheduled maturity date that is no earlier than ninety-one (91) days after the Maturity Date and (ii) not have any amortization in excess of 1% per annum of the original principal amount thereof. The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness shall be deemed to be contractually subordinated to or the issuance of any other Indebtedness solely by virtue Disqualified Stock described in clause (13) below (collectively, “Permitted Debt”) or the issuance of being unsecured.any preferred securities described in clause (11) below:

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect re spect to (collectively, "incur") any Indebtedness (including Acquired ----- Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or ), and the Guarantors may guarantee such Indebtedness, and the Company may issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued (in either case, the "Incurrence Date") would have been 7.0 at least 2.0 to 1 or less, determined 1. The foregoing --------------- -63- ratio shall be calculated on a pro forma basis giving effect to (including a pro forma i) (x) the incurrence of the Indebtedness or issuance of the Disqualified Stock giving rise to such calculation, (y) any other incurrence of Indebtedness (other than revolving credit borrowings) or issuance of Disqualified Stock subsequent to the commencement of the four-quarter reference period and (z) in each such case, the application of the net proceeds therefrom), therefrom as if such incurrence, issuance and application had occurred at the additional Indebtedness had beginning of the four-quarter reference period and (ii) any acquisitions that have been incurredmade by the Company or any of its Subsidiaries, including through mergers or consolidations and including any related financing transactions, during such four-quarter reference period or subsequent thereto and prior to the Disqualified Stock Calculation Date as if they occurred on the first day of such four-quarter reference period. In addition, the Consolidated Cash Flow for any such four-quarter reference period shall be calculated (i) to include the Consolidated Cash Flow of the acquired entities (adjusted to include any expense or preferred stock had been issued, as cost reductions for which pro forma treatment would be permitted under Article 11 of Regulation S-X promulgated under the case may be, Securities Act as of the date of such calculation this Agreement), (ii) without giving effect to clause (iii) of the proviso set forth in the definition of Consolidated Net Income, and (2iii) no Default or Event of Default would occur to exclude the Consolidated Cash Flow attributable to discontinued operations, as a consequence thereof. The Company shall notdetermined in accordance with GAAP, and to operations or businesses disposed of prior to the Calculation Date. In calculating the Fixed Charges as of any Calculation Date, the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and to operations or businesses disposed of prior to the Calculation Date shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness be obligations of the Company referent Person or any of such Subsidiary Guarantor, as its Subsidiaries following the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredCalculation Date.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Company, NE LP and NE LLC shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or guarantee, otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall notIndebtedness, other than Permitted Indebtedness, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock Stock, unless (a) such Indebtedness will be pari passu with or subordinated to the Note and shall not permit any the Bonds, (b) the proceeds of its Restricted Subsidiaries that such incurrence or issuance are not Subsidiary Guarantors used to issue any shares make equity contributions to either or both of preferred stock NEA or NJEA, (c) the proceeds of such incurrence or issuance are used to finance the completion of Required Improvements or capital expenditures for the Projects other than Qualified Subsidiary Stock); provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each caseRequired Improvements, (1d) if the proceeds of such Indebtedness are used to finance the completion of Required Improvements (as defined in the Project Indenture as in effect on the date of the Indenture), (i) the Company's Indebtedness to Adjusted Operating Cash Flow Projected Debt Service Coverage Ratio as of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, (determined on a pro forma basis (including a pro forma giving effect to the incurrence and the application of the net proceeds therefrom)therefrom and the construction of the Required Improvements) measured on each remaining semi-annual payment date in respect of the Bonds is at least 1.2 to 1 and (ii) an independent engineer acceptable to the Trustee (which may, as if the additional Indebtedness had been incurred, absent any conflict or the Disqualified Stock or preferred stock had been issuedobjection of the Trustee, be the Independent Engineer with respect to the Project Securities) certifies that the Improvements are Required Improvements (as defined in the case may be, Project Indenture as of in effect on the date of such calculation the Indenture) and that there will be sufficient funds available to construct the Required Improvements after the incurrence and (2e) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of if the Company or proceeds of such Subsidiary GuarantorIndebtedness are used to finance capital expenditures for the Projects other than Required Improvements, as (i) the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.Projected Debt Service Coverage Ratio

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall the Company will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company may incur Indebtedness and may permit a Restricted Subsidiary to incur Indebtedness if at the time of such incurrence and after giving effect thereto the Leverage Ratio would be less than 6.5 to 1.0. The foregoing limitations will not apply to (a) the incurrence by the Company or any Restricted Subsidiary may incur of Senior Bank Debt in an aggregate amount not to exceed $100.0 million at any one time outstanding, (b) the issuance by the Restricted Subsidiaries of Subsidiary Guarantees, (c) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness, (d) the issuance by the Company of the Notes, (e) the incurrence by the Company and its Restricted Subsidiaries of Capital Lease Obligations and/or additional Indebtedness constituting purchase money obligations up to an aggregate of $2.5 million at any one time outstanding, provided that the Liens securing such Indebtedness constitute Permitted Liens, (including Acquired Debtf) the incurrence of Indebtedness between (i) the Company and its Restricted Subsidiaries and (ii) the Restricted Subsidiaries, (g) Hedging Obligations that are incurred for the purpose of fixing or issue hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding, (h) the incurrence by the Company and its Restricted Subsidiaries of Indebtedness arising out of letters of credit, performance bonds, surety bonds and bankers' acceptances incurred in the ordinary course of business up to an aggregate of $2.0 million at any one time outstanding, (i) the incurrence by the Company and its Restricted Subsidiaries of Indebtedness consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of preferred stock Capital Stock, and (including Disqualified Stock) if, in each case, (1j) the Company's incurrence by the Company and its Restricted Subsidiaries of Refinancing Indebtedness to Adjusted Operating Cash Flow Ratio as of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredin exchange for, or the Disqualified Stock proceeds of which are used to repay, redeem, defease, extend, refinance, renew, replace or preferred stock had been issuedrefund, as the case may be, as of the date of such calculation and Indebtedness referred to in clauses (2b) no Default or Event of Default would occur as a consequence thereof. The Company shall notthrough (e) above, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredthis clause (j).

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (collectively, "incurINCUR") any Indebtedness (including Acquired Debt) and shall not), and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; providedPROVIDED, howeverHOWEVER, that the Company or any Restricted Subsidiary may incur Indebtedness if (including Acquired Debti) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least (a) 2.25 to 1, if such date is prior to August 15, 1995 and (b) 2.50 to 1 or lessthereafter, in each case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurredincurred at the beginning of such four-quarter period and (ii) such Indebtedness is pari passu with or subordinated in right of payment to the Notes and has a Weighted Average Life to Maturity that is greater than the remaining Weighted Average Life to Maturity of the Notes. The foregoing limitations will not apply to (a) the incurrence by the Company or any of its Subsidiaries of revolving credit Indebtedness and letters of credit, and any extension, refinancing, renewal, replacement or refunding thereof, in an aggregate principal amount at any one time outstanding not to exceed $25 million, less the amount of Net Proceeds of Asset Sales that have been applied to permanently reduce borrowings and commitments under any such facility, PROVIDED that the proceeds of such Indebtedness are not used for acquisitions or other expenditures not in the ordinary course of business, (b) the incurrence by the Company or any of its Subsidiaries of the Existing Indebtedness, (c) the incurrence by the Company and its Subsidiaries of Indebtedness represented by the Notes and the Senior Notes, (d) the incurrence by the Company or any of its Subsidiaries of Indebtedness issued in exchange for, or the Disqualified Stock proceeds of which are used to extend, refinance, renew, replace, refund or preferred stock had been issueddefease, Indebtedness incurred pursuant to the immediately preceding paragraph or pursuant to clause (b), (c) or (g) of this paragraph ("REFINANCING INDEBTEDNESS"); PROVIDED, HOWEVER, that (1) the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of Indebtedness so extended, refinanced, renewed, replaced, substituted, refunded or defeased, (2) the Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to or greater than either (x) the remaining Weighted Average Life to Maturity of the Indebtedness being extended, refinanced, renewed, replaced, refunded or defeased or (y) the remaining Weighted Average Life to Maturity of the Notes and (3) if applicable, the Refinancing Indebtedness shall be subordinated in right of payment to the Notes on terms at least as favorable to the case may beHolders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, refunded or defeased (a "PERMITTED REFINANCING"), (e) intercompany Indebtedness between or among the Company and any of its Wholly Owned Subsidiaries that are Subsidiary Guarantors, (f) the incurrence by the Company of Hedging Obligations to protect the Company against interest rate risk with respect to variable rate Indebtedness permitted to be incurred by this Indenture, (g) additional Indebtedness in an aggregate principal amount not to exceed $10 million at any one time outstanding, (h) Capital Lease Obligations in an aggregate principal amount not to exceed $2 million at any one time outstanding, (i) purchase money Indebtedness in an aggregate principal amount not to exceed $2 million at any one time outstanding, (j) the incurrence of Indebtedness pursuant to the Registration Rights Agreement as of in effect on the date of such calculation this Indenture and (2k) no Default or Event the incurrence by the Company and its Subsidiaries of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated Hedging Obligations with respect to any other long-term Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredan Accounts Receivable Subsidiary.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and that the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1, 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, as at the beginning of such four-quarter period. The foregoing limitations shall not apply to: (i) the incurrence by the Company of Senior Bank Debt; (ii) Guarantees of the Senior Bank Debt permitted under or required by the Credit Agreement and Guarantees permitted under or required by this Indenture; (iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; (iv) the incurrence by the Company of Indebtedness represented by the Notes and this Indenture, and the incurrence by Restricted Subsidiaries of Guarantees required or permitted to be incurred under this Indenture; (v) the incurrence by the Company or any of its Restricted Subsidiaries of Capital Lease Obligations and/or additional Indebtedness constituting purchase money obligations in an aggregate principal amount not to exceed $5.0 million at any time outstanding; (vi) the incurrence by the Company of additional Indebtedness for any corporate purposes in an outstanding principal amount (or accreted value, as applicable) at no time exceeding $25.0 million (which may, but need not be, borrowed under the Credit Agreement); (vii) the incurrence by any Foreign Subsidiary of Indebtedness, which when aggregated with the principal amount of Indebtedness of all Foreign Subsidiaries then outstanding and incurred pursuant to this clause (vii), does not exceed $5.0 million (or the equivalent thereof in any other currency) at any one time outstanding; (viii) the incurrence by any Restricted Subsidiary of the Company of Acquired Debt in an aggregate principal amount not to exceed $20.0 million for all Restricted Subsidiaries (reduced by the amount of Acquired Debt repaid with the Net Proceeds of Asset Sales of any Restricted Subsidiary subject to such Acquired Debt) that (a) has not been incurred in connection with, or in contemplation of such Restricted Subsidiary becoming a Restricted Subsidiary, or a merger of a Person subject to such Acquired Debt with or into such Restricted Subsidiary, and (b) is without recourse to the Company or any of its Restricted Subsidiaries or any of their respective assets (other than the Restricted Subsidiary subject to such Acquired Debt and its assets), and is not guaranteed by any such Person; provided that (A) after giving pro forma effect to the incurrence thereof as if incurred by the Company, the Company could incur at least $1.00 of Indebtedness under the first paragraph of this Section 4.09, (B) any Refinancing Indebtedness with respect thereto may not be incurred by any Person other than the Restricted Subsidiary that is the obligor on such Acquired Indebtedness, and (C) such Restricted Subsidiary becomes an Additional Guarantor upon incurrence of such Acquired Debt in accordance with this Indenture; (ix) the incurrence by the Company of Indebtedness in connection with the issuance of notes in payment of the repurchase, redemption, acquisition or retirement of Equity Interests of the Company or any Restricted Subsidiary of the Company to the extent permitted by Section 4.07 hereof; (x) Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the Credit Agreement or this Indenture to be outstanding; (xi) Indebtedness arising out of letters of credit, performance bonds, surety bonds, guarantees resulting from endorsements of negotiable instruments and bankers' acceptances, incurred in the ordinary course of business; (xii) all Obligations with respect to the foregoing; (xiii) the incurrence by the Company and its Restricted Subsidiaries of Indebtedness issued in exchange for, or the proceeds of which are used to repay, redeem, defease, extend, refinance, renew, replace, or refund Indebtedness referred to in clauses (ii) through (xii) above, and this clause (xiii) (the "Refinancing Indebtedness"); provided that (a) the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of Indebtedness so extended, refinanced, renewed, replaced, substituted or refunded (plus the amount of fees, premiums, consent fees, prepayment penalties and expenses incurred in connection therewith); (b) in the case of Refinancing Indebtedness for Indebtedness permitted under clause (iii) or (viii) of this paragraph, the Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being extended, refinanced, renewed, replaced or refunded or shall mature after the scheduled maturity date of the Notes; (c) to the extent such calculation Refinancing Indebtedness refinances Indebtedness subordinate to the Notes, such Refinancing Indebtedness shall be subordinated in right of payment to the Notes on terms at least as favorable to the holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced or refunded; and (2d) with respect to Refinancing Indebtedness incurred by a Guarantor, such Refinancing Indebtedness shall rank no Default or Event of Default would occur as a consequence thereof. The Company shall notmore senior, and shall not permit any Subsidiary be at least as subordinated, in right of payment to the Guarantee of such Guarantor toas the Indebtedness being extended, incur any Indebtedness that is contractually subordinated to any other refinanced, renewed, replaced or refunded; (xiv) Indebtedness of the Company (a) not to exceed an aggregate principal amount of $8.0 million outstanding at any time arising as a result of the issuance of tax-exempt industrial development bonds or similar tax-exempt public financing, and (b) additional Indebtedness arising out of the issuance of additional tax-exempt public financing obligations, but only to the extent that Indebtedness owing under the Credit Agreement is prepaid, concurrently with the receipt of the net proceeds of such issuance, in an amount at least equal to the amount of such proceeds, and term indebtedness or the availability of revolving credit borrowings under the Credit Agreement is permanently reduced by the amount of such net proceeds and (xv) the incurrence of Indebtedness between (a) the Company and its Restricted Subsidiaries and (b) the Restricted Subsidiaries; provided, that (x) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary Guarantorand (y) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, Incur, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired DebtIndebtedness) and shall not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are is not Subsidiary Guarantors a Guarantor to issue any shares of preferred stock (other than Qualified Subsidiary Preferred Stock); provided, however, that the Company or any and its Restricted Subsidiary Subsidiaries may incur Incur Indebtedness (including Acquired Debt) Indebtedness), and the Restricted Subsidiaries that are not Guarantors may issue Preferred Stock, if on the date of such Incurrence or issue shares of preferred stock issuance and after giving effect thereto, the Consolidated Adjusted Debt to EBITDA Ratio is less than 6.00 to 1.00 (including Disqualified Stock) if, in each case, (1) this test being referred to herein as the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as “Leverage Test”). For the purpose of the date on which calculation of the Leverage Test, with respect to any period included in such Indebtedness is incurred or calculation, Consolidated EBITDA, the components of Consolidated Interest Expense and Consolidated Adjusted Debt shall be calculated with respect to such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, determined period by the Company in good faith on a pro forma basis (including a pro forma application of the net proceeds therefromand consistent with Permitted Adjustments), as if giving effect to any Permitted Acquisition, Asset Disposition or Incurrence or redemption or repayment of Indebtedness that has given rise to the additional Indebtedness had been incurredneed for such calculation, has occurred during such period or the Disqualified Stock has occurred after such period and on or preferred stock had been issued, as the case may be, as of prior to the date of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredcalculation.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, create incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock if the Company's Leverage Ratio at the time of the incurrence of such indebtedness, after giving pro-forma effect thereto and to the use of proceeds therefrom, is less than 7.0 to 1. Notwithstanding the foregoing, the Exchange Debenture Indenture will not prohibit any of the following (including Disqualified Stockcollectively, "Permitted Indebtedness"): (a) ifthe Indebtedness evidenced by the Exchange Debentures; (b) the incurrence by the Company of Indebtedness pursuant to Credit Agreements or the Company's __% Senior Subordinated Notes due 2008, so long as the aggregate principal amount of all Indebtedness outstanding under all Credit Agreements does not, at any one time, exceed $190.0 million, less the aggregate amount of all proceeds from all Asset Sales that have been applied since the date hereof to permanently reduce the outstanding amount of such Indebtedness pursuant to the provisions described under Section 4.10; (c) all Indebtedness of the Company and its Restricted Subsidiaries in existence as of the date hereof; (d) intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that (i) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinate to the payment in full of all Obligations with respect to the Exchange Debentures and (ii)(A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary shall be deemed, in each case, (1) the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as constitute an incurrence of the date on which such Indebtedness is incurred by the Company or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, 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 issuedRestricted Subsidiary, as the case may be; (e) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, as mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any part of the date purchase price, lease or cost of such calculation and construction or improvement of property, plant or equipment used in a Permitted Business in an aggregate principal amount not to exceed $15.0 million at any time outstanding; (2f) no Default the incurrence by the Company or Event its Restricted Subsidiaries of Default would occur as a consequence thereof. The Permitted Refinancing Debt in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by the Exchange Debenture Indenture to be incurred; (g) the incurrence by the Company shall notor its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating or variable rate Indebtedness or for the purpose of protecting against fluctuations in interest rates or the value of foreign currencies purchased or received, and shall not permit any Subsidiary Guarantor to, incur any in each case in respect of Indebtedness that is contractually subordinated permitted by the terms of this Exchange Debenture Indenture to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical termsbe outstanding; provided, however, that no in the case of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risks with respect to Indebtedness, the notional principal amount of any such Hedging Obligation does not exceed the principal amount of the Indebtedness to which such Hedging Obligation relates and in the case of Hedging Obligations incurred for the purpose of protecting against fluctuations in interest rates or the value of foreign currencies purchased or received, such Hedging Obligations do not increase the Indebtedness of the Company and its Restricted Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder; (h) Indebtedness incurred solely in respect of performance, surety and similar bonds or completion guarantees, to the extent that such incurrence does not result in the incurrence of any obligation for the payment of borrowed money to others; (i) Indebtedness arising out of standby letters of credit covering workers compensation, performance or similar obligations in an aggregate amount not to exceed $500,000 at any time outstanding; (j) any guarantee of the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of the Exchange Debenture Indenture; (k) the incurrence by the Company of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed $10.0 million; and (l) the incurrence by the Company of Indebtedness in respect of Exchange Debentures issued as payment in kind interest on Exchange Debentures issued on the exchange of the Series A Preferred Stock, to the extent such interest payments are made pursuant to the terms hereof. The Company will not permit any Unrestricted Subsidiary to incur any Indebtedness other than Non-Recourse Debt; provided, however, if any such Indebtedness ceases to be Non-Recourse Debt, such event shall be deemed to be contractually subordinated to any other constitute an incurrence of Indebtedness solely by virtue of being unsecuredthe Company.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incurINCUR") any Indebtedness (including Acquired Debt) and shall not), and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock, and the Company's Restricted Subsidiaries may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, "PERMITTED DEBT"): (i) the incurrence by the Company and any of its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (A) $550.0 million LESS the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay term Indebtedness under a Credit Facility or to repay revolving credit Indebtedness and effect a corresponding commitment reduction thereunder, in each case, in satisfaction of the covenant contained in Section 4.10 of this Indenture or (B) 30% of the Company's Consolidated Net Tangible Assets as of the date of such calculation incurrence; (ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; (2iii) no Default the incurrence by the Company and its Restricted Subsidiaries of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued, in the case of the Notes, on the date of this Indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to the Registration Rights Agreement; (iv) the incurrence by the Company or Event any of Default would occur as a consequence thereof. The its Restricted Subsidiaries of Indebtedness under Floor Plan Facilities; (v) the incurrence by the Company shall notor any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, and shall not permit mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any Subsidiary Guarantor topart of the purchase price or cost of construction or improvement of property, incur any Indebtedness that is contractually subordinated to any other Indebtedness plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (v), not to exceed $30.0 million at any time outstanding; (vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this covenant or clauses (ii), (iii), (v) or (vi) of this paragraph; (vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and its Restricted Subsidiaries; PROVIDED, that (A) if the Company or any Guarantor is the obligor on such Indebtedness owing to a Restricted Subsidiary, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee, in the case of a Guarantor; and (B) (I) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (II) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an incurrence of such Subsidiary GuarantorIndebtedness by the Company or such Restricted Subsidiary, as the case may be, unless that was not permitted by this clause (vii); (viii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes; (ix) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; (x) 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 also contractually subordinated extinguished within five Business Days of its incurrence; (xi) Obligations in respect of performance, bid and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries related to the Notes construction of vehicle dealerships in the ordinary course of business; and (xii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) which, when taken together with all other Indebtedness of the Subsidiary Guarantee Company and its Restricted Subsidiaries outstanding on the date of such Subsidiary GuarantorIncurrence and incurred pursuant to this clause (xii) does not exceed $20.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xii) of the preceding paragraph, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company will be permitted to divide and classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of the definition of Permitted Debt. Accrual of interest and dividends, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, changes to amounts outstanding in respect of Hedging Obligations solely as a result of fluctuations in interest rates and the case may be, payment of dividends on substantially identical terms; provided, however, that no Indebtedness shall Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock will not be deemed to be contractually subordinated to any other an incurrence of Indebtedness solely by virtue or an issuance of being unsecuredDisqualified Stock or preferred stock for purpose of this Section 4.09.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, create incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock if the Company's Leverage Ratio at the time of the incurrence of such indebtedness, after giving pro-forma effect thereto and to the use of proceeds therefrom, is less than 7.0 to 1. Notwithstanding the foregoing, the Indenture will not prohibit any of the following (including Disqualified Stockcollectively, "Permitted Indebtedness"): (a) ifthe Indebtedness evidenced by the Notes; (b) the incurrence by the Company of Indebtedness pursuant to Credit Agreements so long as the aggregate principal amount of all Indebtedness outstanding under all Credit Agreements does not, at any one time, exceed $190.0 million, less the aggregate amount of all proceeds from all Asset Sales that have been applied since the date hereof to permanently reduce the outstanding amount of such Indebtedness pursuant to the provisions described under Section 4.10; (c) all Indebtedness of the Company and its Restricted Subsidiaries in existence as of the date of the Indenture; (d) intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that (i) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinate to the payment in full of all Obligations with respect to the Notes and (ii)(A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary shall be deemed, in each case, (1) the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as constitute an incurrence of the date on which such Indebtedness is incurred by the Company or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, 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 issuedRestricted Subsidiary, as the case may be; (e) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, as mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any part of the date purchase price, lease or cost of such calculation and construction or improvement of property, plant or equipment used in a Permitted Business in an aggregate principal amount not to exceed $15.0 million at any time outstanding; (2f) no Default the incurrence by the Company or Event its Restricted Subsidiaries of Default would occur as a consequence thereof. The Permitted Refinancing Debt in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be incurred; (g) the incurrence by the Company shall notor its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating or variable rate Indebtedness or for the purpose of protecting against fluctuations in interest rates or the value of foreign currencies purchased or received, and shall not permit any Subsidiary Guarantor to, incur any in each case in respect of Indebtedness that is contractually subordinated to any other Indebtedness permitted by the terms of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated Indenture to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical termsbe outstanding; provided, however, that no in the case of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risks with respect to Indebtedness, the notional principal amount of any such Hedging Obligation does not exceed the principal amount of the Indebtedness to which such Hedging Obligation relates and in the case of Hedging Obligations incurred for the purpose of protecting against fluctuations in interest rates or the value of foreign currencies purchased or received, such Hedging Obligations do not increase the Indebtedness of the Company and its Restricted Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder; (h) Indebtedness incurred solely in respect of performance, surety and similar bonds or completion guarantees, to the extent that such incurrence does not result in the incurrence of any obligation for the payment of borrowed money to others; (i) Indebtedness arising out of standby letters of credit covering workers compensation, performance or similar obligations in an aggregate amount not to exceed $500,000 at any time outstanding; (j) any guarantee of the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of the Indenture; (k) the incurrence by the Company of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed $10.0 million; (l) the issuance of Series A Preferred Stock issued as payment in kind dividends on the Series A Preferred Stock outstanding on the Issue Date or issued subsequent to the Issue Date as dividends permitted pursuant to this clause (l), to the extent such dividends are made pursuant to the terms of the Certificate of Designation for such Series A Preferred Stock as in effect on the Issue Date, on any Preferred Stock issued in exchange for the Series A Preferred Stock, or any dividends on such Preferred Stock to the extent such dividends are made pursuant to the terms of the Certificate of Designation of such Preferred Stock; and (m) the incurrence by the Company of Indebtedness in respect of Exchange Debentures issued as payment in kind interest on Exchange Debentures issued on the exchange of Exchangeable Preferred Stock, to the extent such interest payments are made pursuant to the terms of the Exchange Debenture Indenture. The Company will not permit any Unrestricted Subsidiary to incur any Indebtedness other than Non-Recourse Debt; provided, however, if any such Indebtedness ceases to be Non-Recourse Debt, such event shall be deemed to be contractually subordinated to any other constitute an incurrence of Indebtedness solely by virtue of being unsecuredthe Company.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently continently or otherwise, with respect to (collectively, "incurINCUR") any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock Preferred Stock (other than Qualified to the Company or a Wholly Owned Subsidiary Stockof the Company other than an Acquisition Subsidiary or a Subsidiary of an Acquisition Subsidiary); providedPROVIDED, howeverHOWEVER, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1.0, determined on a pro forma PRO FORMA basis (including a pro forma 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, as of at the date beginning of such calculation and four-quarter period; PROVIDED that (2x) no Default or Event of Default would occur as a consequence thereof. The until the Company shall has internal financial statements for two full fiscal quarters the Company will not, and shall will not permit any Subsidiary Guarantor of its Subsidiaries to, incur any Indebtedness that is contractually subordinated to additional Indebtedness, or issue any other Indebtedness shares of Preferred Stock, and (y) after the Company has internal financial statements for two full financial quarters, but before the Company has such internal financial statements for four full financial quarters, the Fixed Charge Coverage Ratio will be calculated by annualizing the available internal financial statements of the Company on a PRO RATA basis. Notwithstanding the foregoing, neither the Company nor any Subsidiary of the Company (other than an Acquisition Subsidiary or a Subsidiary of such an Acquisition Subsidiary) may incur Indebtedness in respect of a Guarantee of Indebtedness of an Acquisition Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated or a Subsidiary of an Acquisition Subsidiary. The foregoing provisions shall not apply to the Notes or incurrence of the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.following Indebtedness

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and the Borrower shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary that is Disqualified Stock); provided, however, that the Company or any Restricted Subsidiary Borrower may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and any of its Restricted Subsidiaries may issue shares of preferred stock that is Disqualified Stock if after giving effect to such issuance or incurrence on a pro forma basis, the sum of (including Disqualified Stockx) ifIndebtedness of the Borrower and its Restricted Subsidiaries, in each caseon a consolidated basis, (1y) the Company's Indebtedness liquidation value of outstanding preferred stock of Restricted Subsidiaries and (z) the aggregate amount payable by the Borrower and its Restricted Subsidiaries, on a consolidated basis, upon redemption of Disqualified Stock to Adjusted Operating Cash Flow Ratio as the extent such amount is not included in the preceding clause (y) shall be less than the product of Annualized Pro Forma EBITDA for the latest fiscal quarter 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 or Disqualified Stock is issued would have been 7.0 to 1 or lessmultiplied by 7.0, 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, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredquarter.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company CR US shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and shall that CR US will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary CR US may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and CR US's Subsidiaries may incur Indebtedness or issue preferred stock (including Disqualified Stock) if, in each case, (1) if the CompanyFixed Charge Coverage Ratio for CR US's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 1.75 to 1 or less1, 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, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereoffour-quarter period. The Company Indenture shall not, and shall also provide that CR US will not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, CR US unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness of CR US shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of CR US solely by virtue of being unsecured.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired DebtDebt and Disqualified Stock) and shall not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall (ii) the Company will not permit any of its Restricted Subsidiaries that are is not Subsidiary Guarantors a Guarantor to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary and the Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Debt and Disqualified Stock) if, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.00 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred at the beginning of such four-quarter period. The foregoing provisions will not apply to any of the following (each and all of which (1) may be issued or incurred, or the Disqualified Stock or preferred stock had been issued, as the case may be, as of the date of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, constitutes an independent exception to the foregoing provisions and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated (3) may be incurred in addition to any other Indebtedness permitted to be incurred under the foregoing paragraph or any other exception): (i) the incurrence by the Company or any Guarantor of Indebtedness constituting term loans pursuant to one or more Credit Agreements in an aggregate principal amount outstanding at any one time not to exceed $250 million (A) less the aggregate amount of all mandatory repayments (a "Mandatory Repayment") of the principal of any term Indebtedness under such Credit Agreements that have been made since the date hereof (or which would otherwise have been required to have been made but for the fact that a prior optional repayment has been made of the principal of any term Indebtedness under such Credit Agreements) pursuant to the amortization schedule of any Credit Agreement (other than any Mandatory Repayment made concurrently with any refinancing or refunding of such Credit Agreements or required to be made with the net proceeds from the offering of the Notes being made hereby) and (B) less the aggregate amount of all Net Proceeds of Asset Sales applied pursuant to clause (a) of the first sentence of the second paragraph under Section 4.10 hereof to permanently reduce Indebtedness under such Credit Agreements; (ii) the incurrence by the Company or any Guarantor pursuant to one or more Credit Agreements of Indebtedness incurred under revolving credit arrangements and letters of credit in an aggregate principal amount at any time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company or the relevant Guarantor thereunder) not to exceed the greater of such Subsidiary Guarantor, as (A) $100.0 million in the case may be, unless such aggregate or (B) the sum of (x) 85% of the Company's accounts receivable and (y) 50% of the Company's inventory; (iii) the incurrence by the Company and any Guarantor of Indebtedness is also contractually subordinated to represented by the Notes and any Guarantee thereof; (iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by (X) Capital Lease Obligations, mortgage financings, purchase money obligations or sale and leaseback transactions, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company or such Restricted Subsidiary and (Y) industrial revenue bonds, pollution control bonds or other tax exempt financing; provided the aggregate principal amount of Indebtedness incurred pursuant to this clause (iv) shall not exceed $12.5 million at any time outstanding; (v) Existing indebtedness; (vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the Subsidiary Guarantee net proceeds of such Subsidiary Guarantorwhich are used to extend, as refinance, renew, replace, defease or refund, indebtedness (or any successive refinancing thereof) that was permitted by this Indenture; (vii) the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to incurrence by the Company or any other Indebtedness solely by virtue of being unsecured.its Restricted Subsidiaries

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incurINCUR") any Indebtedness (including Acquired Debt) and shall not), and shall the Borrower will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall the Borrower will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of Disqualified Stock or preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that (x) the Company or any Restricted Subsidiary Borrower may incur Indebtedness (including Acquired Debt) or issue shares Disqualified Stock and any of preferred stock its Restricted Subsidiaries (other than Nortek and its Restricted Subsidiaries) may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock) ifStock or preferred stock, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of the Borrower for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.00 to 1 or less1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period, and (y) Nortek and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or preferred stock, if the Fixed Charge Coverage Ratio of Nortek for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the date of such calculation and (2) no Default net proceeds therefrom), as if the additional Indebtedness had been incurred or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company Disqualified Stock or of such Subsidiary Guarantorpreferred stock had been issued, as the case may be, unless such Indebtedness is also contractually subordinated to at the Notes or the Subsidiary Guarantee beginning of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredfour-quarter period.

Incurrence of Indebtedness and Issuance of Preferred Stock. Notwithstanding anything contained in this Section 4.10, prior to the Release Date, the Issuer will not, directly or indirectly, incur any Indebtedness. On and after the Release Date, (ai) The Company shall the Issuer will not, and shall will 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, with respect to (collectively, "incur") incur any Indebtedness (including Acquired Debt) and shall not), and shall (ii) the Issuer will not permit any Subsidiary Guarantor to, issue any Disqualified Capital Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Preferred Stock); provided, however, provided that the Company Issuer or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or ), the Issuer may issue shares Disqualified Capital Stock and a Restricted Subsidiary of preferred stock the Issuer may issue Preferred Stock, if the Consolidated Fixed Charge Coverage Ratio is at least 2.0 to 1.0 (this proviso, the “Coverage Ratio Exception”); provided further that Restricted Subsidiaries that are not Guarantors may not incur Indebtedness under the Coverage Ratio Exception if, after giving pro forma effect to such incurrence (including Disqualified Stock) if, in each case, (1) the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if more than an aggregate of $75.0 million of Indebtedness of Restricted Subsidiaries that are not Guarantors would be outstanding pursuant to this paragraph at such time. The first paragraph of this Section 4.10 will not prohibit the additional Indebtedness had been incurred, or the Disqualified Stock or preferred stock had been issued, as the case may be, as incurrence of any of the date following items of such calculation and Indebtedness (2) no Default or Event of Default would occur as a consequence thereof. The Company shall notcollectively, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.“Permitted Debt”):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) ), and the Company shall not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); providedstock, however, provided that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock, and the Company's Restricted Subsidiaries may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.0 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period. The first paragraph of this Section 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"): (i) the incurrence by the Company and any of its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (A) $550.0 million or (B) the amount of the Borrowing Base as of the date of such calculation incurrence; (ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; (2iii) no Default the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued, in the case of the Notes, on the date of this Indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to the Registration Rights Agreement; (iv) the incurrence by the Company or Event any of Default would occur as a consequence thereof. The Company shall notits Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, and shall not permit mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any Subsidiary Guarantor topart of the purchase price or cost of construction or improvement of property, incur any Indebtedness that is contractually subordinated to any other Indebtedness plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (iv), not to exceed $25.0 million at any time outstanding; (v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this covenant or clauses (ii), (iii), (iv), (v) or (xi) of this paragraph; (vi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness owing to the Company, any of its Restricted Subsidiaries or any Accounts Receivable Subsidiary, provided that: (A) if the Company or any Guarantor is the obligor on any such Indebtedness owing to any Restricted Subsidiary, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee, in the case of a Guarantor; and (B) (I) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company or an Accounts Receivable Entity and (II) any sale or other transfer of any such Indebtedness to a Person that is not the Company, a Restricted Subsidiary of the Company or an Accounts Receivable Entity shall be deemed, in each case, to constitute an incurrence of such Subsidiary GuarantorIndebtedness by the Company or such Restricted Subsidiary, as the case may be, unless that was not permitted by this clause (vi); (vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations; (viii) the guarantee by the Company or any of the Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09; (ix) Obligations in respect of performance, bid and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business; (x) 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 also contractually subordinated extinguished within five Business Days of its incurrence; and (xi) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) which, when taken together with all other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the date of such Incurrence and incurred pursuant to this clause (xi) does not exceed $25.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xi) of the preceding paragraph, or is entitled to be incurred pursuant to the Notes first paragraph of this Section 4.09, the Company will be permitted to divide and classify such item of Indebtedness on the date of its incurrence, or the Subsidiary Guarantee later reclassify all or a portion of such Subsidiary Guarantoritem of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of the definition of Permitted Debt. Accrual of interest and dividends, accretion or amortization of original issue discount and changes to amounts outstanding in respect of Hedging Obligations solely as the case may bea result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, on substantially identical terms; providedindemnities and compensation payable thereunder, however, that no Indebtedness shall will not be deemed to be contractually subordinated an incurrence of Indebtedness or an issuance of preferred stock for purpose of this Section 4.09. For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Indebtedness where the Indebtedness incurred is denominated in a currency other than U.S. dollars, the amount of such Indebtedness will be the U.S. Dollar Equivalent of such Indebtedness determined on the date of incurrence, provided that if any such Indebtedness denominated in a currency other than U.S. dollars is subject to a Currency Agreement with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Currency Agreement. The principal amount of any other Permitted Refinancing Indebtedness solely by virtue incurred in the same currency as the Indebtedness being refinanced will be the U.S. Dollar Equivalent of the Indebtedness being unsecuredrefinanced, except to the extent that (i) such U.S. Dollar Equivalent was determined based on a Currency Agreement, in which case the Permitted Refinancing Indebtedness will be determined in accordance with the preceding sentence, and (ii) the principal amount of the Permitted Refinancing Indebtedness exceeds the principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such excess will be determined on the date such Permitted Refinancing Indebtedness is incurred.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and the Issuer shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that (i) the Company or any Restricted Subsidiary Issuer may incur Indebtedness (including Acquired Debt) or issue shares Disqualified Stock, and any Restricted Subsidiary of preferred stock the Issuer (other than HLHC or any Restricted Subsidiary of HLHC) may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of the Issuer for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.0 to 1 1.0, and (ii) HLHC and Horizon Lines may incur Indebtedness (including Acquired Debt) or lessissue Disqualified Stock, and any Restricted Subsidiary of HLHC may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio of HLHC for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, in each case of clauses (i) and (ii), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredfour-quarter period.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Corporation 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, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and the Corporation shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); stock, provided, however, that the Company Corporation or any of its Restricted Subsidiary Subsidiaries may incur Subordinated Indebtedness (including or Acquired Debt) Debt or issue shares of preferred stock (including Disqualified Stock) if, in each caseand the Guarantors may incur Subordinated Indebtedness or Acquired Debt or issue preferred stock, (1) if the CompanyConsolidated Total Debt to Consolidated EBITDA Ratio for the Corporation's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Subordinated Indebtedness or Acquired Debt is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would not have been 7.0 greater than 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Subordinated Indebtedness or Acquired Debt had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period; provided further, that, notwithstanding Section 8.18, any Restricted Subsidiary that ceases to be a Wholly-Owned Subsidiary of the date Corporation as a result of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Restricted Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated issuing Capital Stock pursuant to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness this Section 8.7 shall be deemed to be contractually subordinated to remain a Restricted Subsidiary for all purposes under this Indenture. The first paragraph of this Section 8.7 shall not prohibit the incurrence of any other of the following items of Indebtedness solely by virtue or the issuance of being unsecured.any of the following Disqualified Stock (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will 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, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), other than Permitted Debt, and the Company shall not permit any Subsidiary Guarantor toissue, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue issue, any shares of preferred stock (other than Qualified Subsidiary Disqualified Stock); provided, however, that the Company or any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.00 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the such additional Indebtedness had been incurred, or the such Disqualified Stock or preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period. The provisions of the date first paragraph of this Section 4.09 shall not apply to the incurrence of any Permitted Debt. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09. In the case an Unrestricted Subsidiary incurs Non-Recourse Indebtedness and any such Non-Recourse Indebtedness ceases to be Non-Recourse Indebtedness of such calculation and (2) no Default or Event Unrestricted Subsidiary, then such event shall be deemed to constitute an incurrence of Default would occur as Indebtedness by a consequence thereofRestricted Subsidiary that is subject to this Section 4.09. The Company shall not, and shall will not permit any Subsidiary Guarantor to, incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall of the Company will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described above or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company will, in its sole discretion, classify (or later reclassify) in whole or in part such item of Indebtedness in any manner that complies with this Section 4.09 and such item of Indebtedness or a portion thereof may be classified (or later reclassified) in whole or in part as having been incurred under more than one of the applicable clauses or pursuant to the first paragraph of this Section 4.09. Notwithstanding the foregoing, no Pipeline Subsidiary shall incur or maintain any Indebtedness or grant or become or remain subject to any Lien upon any of its property securing Indebtedness, except (i) liabilities outstanding on the Issue Date in respect of the Company's outstanding 9% Senior Subordinated Notes due 2008, 9-5/8% Senior Subordinated Notes due 2008 and 9-5/8% Senior Subordinated Notes due 2012, (ii) guarantees of the Notes (including any additional Notes) and Term Loans (including any additional Term Loans) and Liens securing Secured Obligations and (iii) Permitted Liens.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will 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, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and shall the Company will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary StockPermitted Debt); provided, however, that the Company or any Restricted Subsidiary and/or the Guarantors may incur additional Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) if the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.5 to 1 or less1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereoffour-quarter period. The Company shall not, and shall will not permit any Subsidiary Guarantor to, incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall of the Company will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecuredunsecured or being secured on a junior basis.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Corporation 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, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and the Corporation shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); stock, provided, however, that the Company Corporation or any of its Restricted Subsidiary Subsidiaries may incur Subordinated Indebtedness (including or Acquired Debt) Debt or issue shares of preferred stock (including Disqualified Stock) if, in each caseand the Guarantors may incur Subordinated Indebtedness or Acquired Debt or issue preferred stock, (1) if the CompanyConsolidated Total Debt to Consolidated EBITDA Ratio for the Corporation's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Subordinated Indebtedness or Acquired Debt is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would not have been 7.0 greater than 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Subordinated Indebtedness or Acquired Debt had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period; provided further, that, notwithstanding Section 5.19, any Restricted Subsidiary that ceases to be a Wholly-Owned Subsidiary of the date Corporation as a result of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Restricted Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated issuing Capital Stock pursuant to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness this Section 5.7 shall be deemed to be contractually subordinated to remain a Restricted Subsidiary for all purposes under this Indenture. The first paragraph of this Section 5.7 shall not prohibit the incurrence of any other of the following items of Indebtedness solely by virtue or the issuance of being unsecured.any of the following Disqualified Stock (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, to directly or indirectly, indirectly create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "“incur"”; with “incurrence” having a correlative meaning) any Indebtedness (including Acquired Debt) and shall not), and shall the Company will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and issue shares of preferred stock Disqualified Stock, and Restricted Subsidiaries may incur Indebtedness (including Disqualified StockAcquired Debt) ifand issue preferred stock, in each case, if (1i) the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of ’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.25 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, as of at the date beginning of such calculation four-quarter period and (2ii) no Default or Event of Default would occur as a consequence thereof. The Company shall notof, and shall not permit any Subsidiary Guarantor tono Event of Default would be continuing following, incur any Indebtedness that is contractually subordinated to any other Indebtedness the incurrence of the Company Indebtedness or the transactions relating to such incurrence, including any related application of the proceeds thereof; provided further that Indebtedness incurred by Restricted Subsidiaries which are not also Subsidiary Guarantors pursuant to this provision shall be limited to an amount not to exceed the greater of (a) $35.0 million and (b) 5% of Adjusted Consolidated Net Tangible Assets of the Company, in each case, determined as of the date of incurrence of such Subsidiary Guarantor, as Indebtedness after giving pro forma effect to such incurrence and the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee application of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredproceeds thereof.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly Directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and the Borrower shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company Borrower may incur Indebtedness (including Acquired Debt) that is unsecured or secured on a junior lien basis to the Guaranteed Obligations or issue Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) that is unsecured or secured on a junior lien basis to the Guaranteed Obligations or issue shares of preferred stock stock, if (including Disqualified Stock) if, in each case, (1a) the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for the Borrower’s most recently ended four (4) full fiscal quarters for which internal financial statements are publicly available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.00 to 1 or less1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness (including Acquired Debt) had been incurred, incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period and (b) such Indebtedness has a maturity date at least 180 days later than the Revolving Facility Maturity Date; provided, further, that any Indebtedness incurred pursuant to the foregoing proviso may be secured on a junior lien basis to the Guaranteed Obligations and subject to the Collateral Trust Agreement or an intercreditor agreement that is reasonably acceptable to the Administrative Agent, if the Consolidated Total Secured Leverage Ratio for the Borrower’s most recently ended four (4) full fiscal quarters for which internal financial statements are publicly available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would not have exceeded 5.00 to 1.00, determined on a pro forma basis (including a pro forma application of the date of such calculation and net proceeds therefrom), as if the additional Indebtedness (2including Acquired Debt) no Default had been incurred or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company Disqualified Stock or of such Subsidiary Guarantorpreferred stock had been issued, as the case may be, unless such Indebtedness is also contractually subordinated to at the Notes or the Subsidiary Guarantee beginning of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredfour-quarter period.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Issuer will not, and shall will 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall not), and shall the Issuer will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, provided that the Company or any Restricted Subsidiary Issuer may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock Disqualified Stock, and the Guarantors may incur Indebtedness (including Disqualified Stock) ifAcquired Debt), in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of the Issuer for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.00 to 1 or less1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”): (1) the incurrence by the Issuer and any Restricted Subsidiaries of Indebtedness and letters of credit under Senior Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $650,000,000 and (y) an amount so long as, after giving pro forma effect to the incurrence of such Indebtedness and the application of the proceeds therefrom, the Consolidated First Lien Secured Leverage Ratio of the Issuer for the most recently ended four full fiscal quarters of the Issuer for which internal financial statements are available immediately preceding the date of incurrence of such calculation and Indebtedness would not exceed 1.40 to 1.00; (2) no Default or Event the incurrence by the Issuer and the Guarantors of Default would occur as a consequence thereof. The Company shall notIndebtedness represented by the Notes to be issued on the Issue Date and the related Note Guarantees, and shall not permit respectively (but excluding any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Additional Notes); (3) Indebtedness of the Company Issuer to any Restricted Subsidiary of the Issuer or of any Restricted Subsidiary of the Issuer to the Issuer or any other Restricted Subsidiary of the Issuer; provided that such Subsidiary Indebtedness shall not have been transferred or pledged to any third Person; (4) the incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided that: (A) if the Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Issuer or a Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall must be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.expressly subordinated

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Borrower 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired Debt) and shall notIndebtedness, and the Borrower shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock stock. (other than Qualified Subsidiary Stockb) The provisions of Section 6.02(a) hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”): (i) the incurrence by the Borrower and the Guarantors of the (A) Loans and Guarantees in the aggregate principal amount available on the Closing Date , (B) the Senior Notes in an aggregate amount not to exceed the amount outstanding on the Closing Date and (C) any Permitted Refinancing Indebtedness that is incurred to renew, refund, refinance, replace, defease, extend or discharge any Indebtedness incurred pursuant to this clause (i); provided, however, that (ii) the Company incurrence by the Borrower or any of its Restricted Subsidiary may incur Indebtedness Subsidiaries of the Existing Indebtedness; (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1iii) the Company's Indebtedness incurrence by the Borrower or any of its Restricted Subsidiaries of Capital Lease Obligations, mortgage financings or purchase money obligations incurred to Adjusted Operating Cash Flow Ratio as finance (or to reimburse the Borrower or any of its Restricted Subsidiaries for) all or any part of the purchase price or installation or improvement of any Aircraft Asset used in the business of the Borrower or any of its Restricted Subsidiaries or leased by third parties; (iv) the incurrence by the Borrower of any Incremental Commitment pursuant to Section 2.22; (v) the incurrence by the Borrower or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate consolidated (i.e. without duplication) principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause Error! Reference source not found., not to exceed the sum of (A) the greater of (x) $500,000,000 and (y) 100% of Consolidated EBITDAR of the Borrower for the most recent four consecutive fiscal quarters ending prior to the date on which of such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, determined determination (as calculated on a pro forma basis (including a pro forma application of the net proceeds therefrombasis), as if the additional Indebtedness had been incurred, or the Disqualified Stock or preferred stock had been issued, as the case may be, as of the date of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.plus

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur"“Incur”) any Indebtedness (including Acquired Debt) and shall not), and shall the Borrower will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall the Borrower will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of Disqualified Stock or preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that (x) the Company or any Restricted Subsidiary Borrower may incur Indebtedness (including Acquired Debt) or issue shares Disqualified Stock and any of preferred stock its Restricted Subsidiaries (other than Nortek and its Restricted Subsidiaries) may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock) ifStock or preferred stock, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of the Borrower for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.00 to 1 or less1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period, and (y) Nortek and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or preferred stock, if the Fixed Charge Coverage Ratio of Nortek for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the date of such calculation and (2) no Default net proceeds therefrom), as if the additional Indebtedness had been incurred or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company Disqualified Stock or of such Subsidiary Guarantorpreferred stock had been issued, as the case may be, unless such Indebtedness is also contractually subordinated to at the Notes or the Subsidiary Guarantee beginning of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredfour-quarter period.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and shall that the Company will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified except that a Subsidiary Stockof the Company may issue preferred stock to the Company or to any Guarantor); provided, however, that the Company or any Restricted Subsidiary of the Guarantors may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) , and any of the Guarantors may issue preferred stock, if, in each case, (1) : the Fixed Charge Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued would have been 7.0 at least 2 to 1 or less1, 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, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereoffour-quarter period. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Senior Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured.. The provisions of the first paragraph of this covenant will not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock Interests and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock Equity Interests (other than Qualified Subsidiary Stockincluding Disqualified Interests); providedPROVIDED, howeverHOWEVER, that (a) the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares Disqualified Interests if each of preferred stock (including Disqualified Stock) if, in each case, (1) the Fixed Charge Coverage Ratio and the Issuer Coverage Ratio for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is Equity Interests are issued would have been 7.0 at least 2 to 1 or less1, 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 Equity Interests had been issued, as the case may be, as at the beginning of such four-quarter period; and (b) any of the Issuer's Restricted Subsidiaries may incur Indebtedness (including any Acquired Debt) or issue preferred Equity Interests (including Disqualified Equity Interests) if the Fixed Charge Coverage Ratio for the Issuer's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Equity Interests are issued would have been at least 2 to 1, determined on a pro forma basis (including pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Equity Interests had been issued, as the case may be, at the beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereoffour quarter period. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; providedPROVIDED, howeverHOWEVER, that no Indebtedness of the Company shall be deemed to be contractually subordinated to any other Indebtedness of the Company solely by virtue of being unsecured.. The foregoing provisions shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall the Company will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company may incur Indebtedness and may permit a Restricted Subsidiary to incur Indebtedness if at the time of such incurrence and after giving effect thereto the Leverage Ratio would be less than 6.0 to 1.0. The foregoing limitations will not apply to (a) the incurrence by the Company or any Restricted Subsidiary may incur of Senior Bank Debt in an aggregate amount not to exceed $25.0 million at any one time outstanding, (b) the issuance by the Restricted Subsidiaries of Subsidiary Guarantees, (c) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness, (d) the issuance by the Company of the Notes, (e) the incurrence by the Company and its Restricted Subsidiaries of Capital Lease Obligations and/or additional Indebtedness constituting purchase money obligations up to an aggregate of $2.5 million at any one time outstanding, provided that the Liens securing such Indebtedness constitute Permitted Liens, (including Acquired Debtf) the incurrence of Indebtedness between (i) the Company and its Restricted Subsidiaries and (ii) the Restricted Subsidiaries, (g) Hedging Obligations that are incurred for the purpose of fixing or issue hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding, (h) the incurrence by the Company and its Restricted Subsidiaries of Indebtedness arising out of letters of credit, performance bonds, surety bonds and bankers' acceptances incurred in the ordinary course of business up to an aggregate of $2.0 million at any one time outstanding, (i) the incurrence by the Company and its Restricted Subsidiaries of Indebtedness consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of preferred stock Capital Stock, and (including Disqualified Stock) if, in each case, (1j) the Company's incurrence by the Company and its Restricted Subsidiaries of Refinancing Indebtedness to Adjusted Operating Cash Flow Ratio as of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 to 1 or less, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredin exchange for, or the Disqualified Stock proceeds of which are used to repay, redeem, defease, extend, refinance, renew, replace or preferred stock had been issuedrefund, as the case may be, as of the date of such calculation and Indebtedness referred to in clauses (2b) no Default or Event of Default would occur as a consequence thereof. The Company shall notthrough (e) above, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredthis clause (j).

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incurINCUR") any Indebtedness (including Acquired Debt) and shall not), and the Issuer shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that (i) the Company or any Restricted Subsidiary Issuer may incur Indebtedness (including Acquired Debt) or issue shares Disqualified Stock, and any Restricted Subsidiary other than Holdings or any Restricted Subsidiary of preferred stock Holdings may incur Indebtedness (including Disqualified StockAcquired Debt) ifor issue preferred stock, in each case, (1) if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of the Issuer for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock or Disqualified Stock is issued issued, as the case may be, would have been 7.0 at least 2.0 to 1 1.0 and (ii) Holdings may incur Indebtedness (including Acquired Debt) or lessissue Disqualified Stock, and any Restricted Subsidiary of Holdings may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio of Holdings for its most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as of at the date beginning of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredfour-quarter period.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Corporation will not, and shall will 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, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and shall the Corporation will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock); stock, provided, however, that the Company Corporation or any of its Restricted Subsidiary Subsidiaries may incur Subordinated Indebtedness (including or Acquired Debt) Debt or issue shares of preferred stock (including Disqualified Stock) if, in each caseand the Guarantors may incur Subordinated Indebtedness or Acquired Debt or issue preferred stock, (1) if the CompanyConsolidated Total Debt to Consolidated EBITDA Ratio for the Corporation's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Subordinated Indebtedness or Acquired Debt is incurred or such Disqualified Stock or such preferred stock or Disqualified Stock is issued issued, as the case may be, would not have been 7.0 greater than 2.0 to 1 or less1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Subordinated Indebtedness or Acquired Debt had been incurred, incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, as at the beginning of such four-quarter period; provided further, that, notwithstanding the covenant described under "Description of the date Senior Secured Notes — Certain Covenants — Designation of Restricted and Unrestricted Subsidiaries", any Restricted Subsidiary that ceases to be a Wholly-Owned Subsidiary of the Corporation as a result of such calculation and (2) no Default or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Restricted Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated issuing Capital Stock pursuant to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness present covenant shall be deemed to be contractually subordinated to remain a Restricted Subsidiary for all purposes under the Indenture. The first paragraph of this covenant will not prohibit the incurrence of any other of the following items of Indebtedness solely by virtue or the issuance of being unsecured.any of the following Disqualified Stock (collectively, "Permitted Debt"):

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company and Holdings shall not, and shall not permit any of its their respective Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not), and shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted their respective Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that (i) the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock if the Fixed Charge Coverage Ratio of the Company for the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as of most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 1.75 to 1 1, if such incurrence or lessissuance is on or prior to December 15, 1999 or 2.0 to 1, if such incurrence or issuance is after December 15, 1999, in each case, 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, as at the beginning of such four-quarter period and (ii) Holdings may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio of Holdings for Holdings' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 to 1, if such incurrence or issuance is on or prior to December 15, 1999, or 2.0 to 1, if such incurrence or issuance is after December 15, 1999, in each case, determined on a pro forma basis (including a pro forma application of the date of such calculation and (2) no Default net proceeds therefrom), as if the additional Indebtedness had been incurred, or Event of Default would occur as a consequence thereof. The Company shall not, and shall not permit any Subsidiary Guarantor to, incur any Indebtedness that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary GuarantorDisqualified Stock had been issued, as the case may be, unless at the beginning of such Indebtedness is also contractually subordinated four-quarter period. The provisions for the first paragraph of this Section 4.09 will not apply to the Notes or incurrence of any of the Subsidiary Guarantee following (collectively, "Permitted Debt"), each of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness which shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.given independent effect:

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Disqualified Stock or Preferred Stock); provided, however, provided that the Company or any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Debt) or Indebtedness, the Company may issue shares Disqualified Stock and subject to the final paragraph of preferred stock (including Disqualified Stock) ifthis covenant below, in each case, (1) the Company's Indebtedness to Adjusted Operating Cash Flow Ratio as Restricted Subsidiaries of the date on which such Indebtedness is incurred or such preferred stock or Disqualified Company may incur Preferred Stock is issued if the Leverage Ratio of the Company and its Restricted Subsidiaries would have been 7.0 not greater than 5.5 to 1 or less, 1.0 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 Preferred Stock had been issued, as the case may be, as at the beginning of the date of such calculation and (2) most recently ended fiscal quarter. So long as no Default shall have occurred and be continuing or Event would be caused thereby, the first paragraph of Default would occur as a consequence thereof. The Company shall not, and this covenant shall not permit prohibit the incurrence of any Subsidiary Guarantor toof the following items of Indebtedness (collectively, incur any "Permitted Debt"): the incurrence by the Company and its Restricted Subsidiaries of Indebtedness under the Credit Facilities; provided that is contractually subordinated to any other the aggregate principal amount of all Indebtedness of the Company and its Restricted Subsidiaries outstanding under this clause (1) for all Credit Facilities of the Company and its Restricted Subsidiaries after giving effect to such incurrence does not exceed an amount equal to $9.75 billion less the aggregate amount of all Net Proceeds from Asset Sales applied by the Company or any of its Restricted Subsidiaries to repay Indebtedness under a Credit Facility pursuant to Section 4.11. the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness (other than under the Credit Facilities); the incurrence on the Issue Date by the Company and its Restricted Subsidiaries of Indebtedness represented by the Notes (other than any Additional Notes); the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement (including, without limitation, the cost of design, development, construction, acquisition, transportation, installation, improvement, and migration) of Productive Assets of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount not to exceed $75 million at any time outstanding pursuant to this clause (4); the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, in whole or in part, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under this clause (5), the first paragraph of this covenant or clauses (2) or (3) of this paragraph; the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that: if the Company is the obligor on such Subsidiary GuarantorIndebtedness, as the case may be, unless such Indebtedness is also contractually must be expressly subordinated to the Notes or prior payment in full in cash of all Obligations with respect to the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical termsNotes; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecured.and

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Authority will not, and shall will 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, with respect to (collectively, "“incur"”) any Indebtedness (including Acquired DebtIndebtedness) and shall not, and shall the Authority will not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall will not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary Authority may incur Indebtedness (including Acquired DebtIndebtedness) or issue shares of Disqualified Stock and the Authority’s Restricted Subsidiaries may incur Indebtedness or issue preferred stock if (including Disqualified Stock) if, in each case, (1i) the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for the date on Authority’s most recently ended four full fiscal quarters for which such Indebtedness is incurred or such preferred stock or Disqualified Stock is issued internal consolidated financial statements are available would have been 7.0 at least 2.0 to 1 or less, 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or preferred stock had been issued, as applicable, at the case may bebeginning of such four-quarter period, (ii) the Authority paid in Cash Interest only the last interest payment due in respect of the Notes, immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as applicable, and delivers to the Trustee an Officer’s Certificate stating that the Authority intends to pay Cash Interest only for each of the date interest payments due in respect of such calculation the Notes during the following twelve month period based on the Authority’s current business plan, and (2iii) no Default or Event of Default shall have occurred or be continuing or would occur as a consequence thereofresult from such incurrence of Indebtedness. The Company shall notNotwithstanding the foregoing, and shall the Authority will not permit issue any Subsidiary Guarantor to, incur Disqualified Stock or any Indebtedness type of Capital Stock that is contractually subordinated to any other Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated to the Notes or the Subsidiary Guarantee of such Subsidiary Guarantor, as the case may be, on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of being unsecuredwould violate IGRA.

Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and shall not, and that the Company shall not permit any Subsidiary Guarantor to, issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries that are not Subsidiary Guarantors to issue any shares of preferred stock (other than Qualified Subsidiary Stock)stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock (including Disqualified Stock) if, in each case, (1) Stock if the Company's Indebtedness to Adjusted Operating Cash Flow Fixed Charge Coverage Ratio as of for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock or Disqualified Stock is issued would have been 7.0 at least 2.00 to 1 or less1.00, 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, at the beginning of such four-quarter period. The provisions of the first paragraph of this Section 4.9 shall not apply to the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt") so long as no Default has occurred and is continuing or would be caused thereby: the incurrence by the Company of (A) revolving credit Indebtedness under any Credit Facility, letters of credit (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) and related Guarantees under any Credit Facility; provided that the aggregate principal amount of all revolving Indebtedness and letters of credit of the Company and its Restricted Subsidiaries (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) outstanding at any one time under all such Credit Facilities after giving effect to such incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (i), does not exceed $160.0 million less the aggregate amount of Asset Sale proceeds applied by the Company and its Restricted Subsidiaries to permanently reduce the availability of revolving credit Indebtedness under the Credit Facility pursuant to the provisions described in Section 4.10 hereof; and (B) up to $75.0 million of the term loan or a similar facility not to exceed $75.0 million (less the aggregate amount of all repayments (optional or mandatory) of the principal of any term loan pursuant to this clause (i) that has been made by the Company since the date of such calculation this Indenture); the incurrence by the Company and (2) no Default its Restricted Subsidiaries of Existing Indebtedness; the incurrence by the Company of Indebtedness represented by the Notes in an aggregate principal amount of up to $150.0 million outstanding on the date of this Indenture and the incurrence by the Guarantors of Indebtedness represented by the Subsidiary Guarantees thereof; the incurrence by the Company or Event any of Default would occur as a consequence thereof. The Company shall notits Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, and shall not permit mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any Subsidiary Guarantor topart of the purchase price or cost of construction or improvement of property, incur any Indebtedness that is contractually subordinated to any other Indebtedness plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred pursuant to this clause (iv), not to exceed $15.0 million at any time outstanding; the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in respect of Indebtedness that was permitted by this Indenture to be incurred by such entity other than pursuant to clause (i), (vi) and (vii) below; the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and this Indenture and (ii)(A) any subsequent event or issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an incurrence of such Subsidiary GuarantorIndebtedness by the Company or such Restricted Subsidiary, as the case may be, unless such that was not permitted by this clause (vi); the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the normal course of business and consistent with past business practices for the purpose of fixing or hedging currency, commodity or interest rate risk (including with respect to any floating rate Indebtedness that is also contractually subordinated permitted by the terms of this Indenture to be outstanding in connection with the Notes conduct of their respective businesses and not for speculative purposes); the Guarantee by the Company of Indebtedness of any of the Guarantors or the Guarantee by any of the Guarantors of Indebtedness of the Company, in each case that was permitted to be incurred by another provision of this Section 4.9; the incurrence by a Restricted Subsidiary Guarantee that is a Foreign Subsidiary of Non-Recourse Debt in an amount not to exceed the sum of (a) 75% of the net book value of the non-Affiliate accounts receivable of such Restricted Foreign Subsidiary Guarantordetermined in accordance with GAAP and (b) 50% of the total Eligible Inventory of such Restricted Subsidiary; the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, as the case may be, on substantially identical terms; provided, however, that no if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (x); the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Company or a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Restricted Subsidiary of the Company, other than the Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary for the purpose of financing such acquisition; provided that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Subsidiary of the Company (contingent -47- 55 obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be contractually subordinated deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness with respect to such disposition shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition; and the incurrence by the Company or any of its Restricted Subsidiaries that are Guarantors of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness solely incurred pursuant to this clause (xii), not to exceed $25.0 million, provided that up to $10.0 million of such $25.0 million may be incurred by virtue any of being unsecuredthe Company's Foreign Restricted Subsidiaries that are not Guarantors. For purposes of determining compliance with this covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xii) above as of the date of incurrence thereof or is entitled to be incurred pursuant to the first paragraph of this covenant as of the date of incurrence thereof, the Company shall, in its sole discretion, classify such item of Indebtedness as of the date of incurrence thereof in any manner that complies with this covenant and such item of Indebtedness shall be treated as having been incurred pursuant to only one of such clauses or pursuant to the first paragraph hereof. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this covenant.