Common use of Terms of Offering Clause in Contracts

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company, and the Company understands, that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchasers hereunder on the terms set forth in the Pricing Disclosure Package and the Final Offering Memorandum, as amended or supplemented, solely to persons (ithe “Subsequent Purchasers”) persons whom the Initial Purchasers reasonably believe to be "(a) “qualified institutional buyers" ” as defined in Rule 144A under the Securities Act ("QIBS"“QIBs”) (b) a limited number of institutional “accredited investors” as defined in Rule 501(a)(1), and (ii2), (3) persons or (7) under the Securities Act (“Accredited Investors”) that make certain representations or warranties to the Initial Purchasers as set forth in the Accredited Investor Letter attached as Annex A to the Offering Memorandum, or (c) non-“U.S. persons” permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Securities Act (each“Regulation S Persons”). As used herein, “U.S. persons” has the meaning given to such term in Regulation S under the Securities Act. Pursuant to the Indenture, each of the Company’s existing and future Domestic Subsidiaries (other than Immaterial Subsidiaries) shall fully and unconditionally guarantee to each holder of the Notes and the Trustee, on a "REGULATION S PURCHASER") senior secured basis, the payment and performance of the Company’s Obligations under the Indenture and the Notes (each such persons ---------------------- specified in clauses (i) and (ii) subsidiary being referred to herein as the "ELIGIBLE -------- PURCHASERS"a “Guarantor” and each such guarantee being referred to herein as a “Guarantee”). The Initial Purchasers Pursuant to the terms of the Indenture, the Collateral Documents and the Intercreditor Agreement, the Notes and the Guarantees will offer be secured by a second priority security interest in substantially all of the Series A Debentures to ---------- Eligible Purchasers initially at Company’s and the Guarantors’ existing and future current assets (principally cash, cash equivalents, accounts receivable and inventory) and certain related assets, and by a price equal to 52.175first priority security interest in substantially all of the Company’s and the Guarantors’ other existing and future tangible and intangible assets, including a pledge of 65% of the principal amount thereof. Such price may be changed at any time without noticecapital stock of first tier Foreign Subsidiaries, subject to Permitted Prior Liens and, in each case, excluding Excluded Assets. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement applicable to the Notes (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially a form reasonably acceptable to the form Initial Purchasers in conformity in all material respects with the description of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined registration rights contained in the ------------------------------ Registration Rights Agreement)Pricing Disclosure Package and the Final Offering Memorandum. Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, SEC (i) a registration ---------- statement under the Securities Act relating to the 105/8% Senior Secured Notes due 2014 (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- “Exchange Notes”), which shall be identical to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 Notes (except that the "SERIES B DEBENTURES"), Exchange Notes shall have been registered pursuant to such registration statement and will not be subject to restrictions on transfer or contain additional interest provisions) to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and “Exchange Offer”), and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in Notes. If required under the Registration Rights Agreement and Agreement, the Company will issue Exchange Notes to consummate the Exchange OfferInitial Purchasers. If the Company fails to satisfy its obligations under the Registration Rights Agreement, it will be required to pay additional interest to the holders of the Notes under certain circumstances in accordance with the terms of the Registration Rights Agreement. This Agreement, the Indenture, the Debentures and Collateral Documents, the Registration Rights Agreement, the Notes, the Exchange Notes, the Guarantees, the Exchange Guarantees (as defined below), the Credit Agreement and the Intercreditor Agreement are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTS“Transaction Documents." -------------------” The Offering, the entry into the Credit Agreement and the application of the proceeds therefrom as described in the Pricing Disclosure Package and the Offering Memorandum and the issuance and sale of the Notes in accordance with this Agreement are collectively referred to herein as the “Transactions”.

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) of -------------- the Series A Debentures Notes purchased by the Initial Purchasers hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "(a) ”qualified institutional buyers" ,” as defined in Rule 144A under the Act ("QIBS"“QIBs”), and (iib) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION “Regulation S PURCHASER"Purchaser”) or (such persons ---------------------- specified c) a limited number of institutional “accredited investors,” as defined in clauses Rule 501(a)(1), (i2), (3) or (7) under the Act that make certain representations and warranties to the Company as set forth in the Accredited Investor Letter (iithe “Accredited Investor Letter”) being referred attached as Annex A to herein as the "ELIGIBLE -------- PURCHASERS"Offering Circular (“Accredited Investors” and, together with QIBs and Regulation S Purchasers, “Eligible Purchasers”). The Initial Purchasers will offer Holders of the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION"“Commission”) under the circumstances set forth therein, therein (ia) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to, among other things, the 107/8% Senior Secured Notes due 2011, Series B, of the Company (the “Series B Notes”), identical in all material respects to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 Series A Notes, including with respect to the Guarantees thereof (except that the "SERIES Series B DEBENTURES"Notes shall have been registered pursuant to such registration statement and not subject to the transfer restrictions), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- “Registered Exchange Offer”), and (iib) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures Notes. On the Closing Date, the Company Entities will enter into certain security agreements, pledge agreements and other collateral documents (collectively, the “Security Documents”), that will provide for the grant of the Security Interests in the Collateral to use its best efforts the Trustee, as collateral agent for the Trustee and the holders of the Notes (in such capacity, the “Secured Party”). The Security Interests will secure the payment and performance when due of all of the respective obligations of the Company Entities under the Indenture, the Notes and the Guarantees. In addition, on the Closing Date, the Company expects to cause such Registration Statements enter into a new senior secured credit facility (the “New Credit Facility”). In connection with entering into the New Credit Facility, the Trustee and the lender under the New Credit Facility shall enter into an Intercreditor Agreement, to be declared and remain effective and usable for dated as of the periods specified Closing Date, in a form reasonably satisfactory to the Initial Purchasers, which form shall be attached as an exhibit to the Indenture (the “Intercreditor Agreement”). As described in the Registration Rights Agreement Offering Circular under “The Transactions,” proceeds from the issuance and sale of the Series A Notes, together with cash of the Company, will be used to consummate the Exchange Offeracquisition (the “Acquisition”) by the Company and the Subsidiaries (as defined below) of substantially all of the assets of The Wornick Company, a Nevada corporation (the “Predecessor”), and its subsidiaries, pursuant to an Assets Purchase and Sale Contract, dated as of December 3, 2003 and amended as of May 4, 2004 (as so amended, the “Purchase and Sale Contract”). The Purchase and Sale Contract provides for the purchase by the Company and the Subsidiaries, and the sale by the Predecessor and its subsidiaries, of their business as a going concern, including substantially all of their operating assets, and the assumption of certain of the liabilities of the Predecessor and its subsidiaries. This Agreement, the Indenture, the Debentures Registration Rights Agreement, the Notes, the Guarantees and the Registration Rights Agreement Security Documents collectively are hereinafter sometimes referred to collectively herein as the "OPERATIVE DOCUMENTS“Operative Documents." -------------------” The Purchase and Sale Contract, the New Credit Facility and the Intercreditor Amendment together with the Operative Documents collectively are referred to herein as the “Transaction Documents.” The transactions contemplated by the Transaction Documents, including, without limitation, the Offering and the application of the proceeds therefrom as described in the Offering Circular, the issuance and sale of the Notes in accordance with this Agreement, the creation, grant, recording and perfection of the Security Interests, and the initial borrowing (if any) under the New Credit Facility on the Closing Date, collectively are referred to herein as the “Transactions.”

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.17599.211% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8% Company's 9_% Series B Senior Discount Debentures Subordinated Notes due 2009 2008 (the "SERIES B DEBENTURESNOTES"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and the Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, the Guarantees and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company, and the Company understands, that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) of -------------- the Series A Debentures Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Time of Sale Document and the Final Offering Memorandum, as amended or supplemented, Memorandum solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "“qualified institutional buyers" ,” as defined in Rule 144A under the Securities Act ("QIBS"), and “QIBs”) or (iib) non-U.S. persons permitted to ---- purchase the purchasing Series A Debentures Notes in offshore transactions that occur outside the United States in reliance upon accordance with Regulation S under the Securities Act (each“Regulation S Purchasers” and, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"collectively with QIBs, “Eligible Purchasers”). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors, will agree agree, among other things, (a) to file with the Securities and Exchange Commission (the "COMMISSION"“Commission”) under the circumstances set forth therein, therein (i) a registration ---------- statement under the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to, among other things, the 12.5% Senior Secured Notes due 2014, Series B (the “Series B Notes”), identical in all material respects to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 Series A Notes, including with respect to the Guarantees thereof (except that the "SERIES Series B DEBENTURES"Notes shall have been registered pursuant to such registration statement and shall not contain provisions for Liquidated Damages), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- “Registered Exchange Offer”), and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" “Shelf Registration Statement” and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS"“Registration Statements”) relating to the resale by ----------------------- certain holders of the Series A Debentures Notes, and to use its best efforts (b) to cause such Registration Statements to be declared effective, as applicable. The Company and remain effective the Guarantors will enter into certain security and usable pledge agreements, mortgages, deeds of trust and certain other documents (collectively, the “Collateral Agreements”), on the Closing Date (or with respect to such mortgages and deeds of trust, within 60 days of the Closing Date) that will provide for the periods specified grant of the Security Interests in the Registration Rights Agreement Collateral to the Trustee, as collateral agent for the Trustee and the holders of the Notes (in such capacity, the “Collateral Agent”). The Security Interests will secure the payment and performance when due of all of the respective obligations of the Company and the Guarantors under the Indenture, the Notes and the Guarantees. On the Closing Date, the Company will either amend its existing working capital facility or enter into a new senior secured working capital facility (in either case, the “New Credit Facility”). In connection with entering into the New Credit Facility, the Trustee, the lender under the New Credit Facility, the Company and the Guarantors will enter into an Intercreditor Agreement, to consummate be dated as of the Exchange OfferClosing Date, in a form reasonably satisfactory to the Initial Purchaser, which form shall be attached as an exhibit to the Indenture (the “Intercreditor Agreement”). This Agreement, the Indenture, the Debentures Registration Rights Agreement, the Notes, the Guarantees, the Collateral Agreements, the New Credit Facility and the Registration Rights Agreement Intercreditor Agreement, collectively are hereinafter sometimes referred to collectively herein as the "OPERATIVE DOCUMENTS“Transaction Documents." -------------------” The transactions contemplated by the Transaction Documents, including, without limitation, the Offering and the application of the proceeds therefrom as described in the Time of Sale Document and the Final Offering Memorandum, the issuance and sale of the Notes in accordance with this Agreement, the creation, grant, recording and perfection of the Security Interests, and borrowings under the New Credit Facility (if any), collectively are referred to herein as the “Transactions.”

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Initial Securities purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), ) and (ii) persons permitted to ---- purchase the Series A Debentures Initial Securities in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Initial Securities to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof$940.38 per Unit. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "NOTES REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit EXHIBIT A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Notes Registration Rights Agreement). Pursuant to the Notes Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 12 7/8% Senior Discount Debentures due 2009 Subordinated Notes, Series B (the "SERIES B DEBENTURESNOTES"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and the Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTStatement" and, together with the Exchange Offer ---------------------------- Registration StatementStatement and any registration statement required to be filed by the Warrant Registration Rights Agreement (as defined below), the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its their best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Notes Registration Rights Agreement and to consummate the Exchange Offer. Holders (including subsequent transferees) of Warrants and Warrant Shares will have the registration rights with respect to the Warrants and Warrant Shares set forth in a registration rights agreement (the "WARRANT REGISTRATION RIGHTS AGREEMENT") between RailAmerica and the Initial Purchasers to be dated as of the Closing Date, in substantially the form of EXHIBIT B hereto. This Agreement, the Indenture, the Debentures Notes, the Guarantees, the Warrant Agreement, the Warrant Registration Rights Agreement and the Notes Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company, and the Company understands, that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchasers hereunder on the terms set forth in the Offering Memorandum, Time of Sale Document to persons (the “Subsequent Purchasers”) (the first time when sales of the Securities are made is referred to as amended or supplemented, solely to (ithe “Time of Sale”) persons whom the Initial Purchasers reasonably believe to be "(i) are “qualified institutional buyers" ” (“QIBs”) (as defined in Rule 144A under the Act ("QIBS"Securities Act), and or (ii) persons permitted to ---- purchase the Series A Debentures are not “U.S. persons” (as defined in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER"Securities Act) (and in compliance with the laws applicable to such persons ---------------------- specified in clauses jurisdictions outside of the United States. Pursuant to the Indenture, all Domestic Restricted Subsidiaries of the Company shall fully and unconditionally guarantee, on a senior unsecured basis, to each holder of the Notes and the Trustee, the payment and performance of the Company’s obligations under the Indenture and the Notes (i) and (ii) each such subsidiary being referred to herein as a “Guarantor” and each such guarantee being referred to herein as a “Guarantee” and, together with the "ELIGIBLE -------- PURCHASERS"Notes, the “Securities”). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% Holders of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transfereesSubsequent Purchasers) will be entitled to the benefits of the Series A Debentures will have the registration rights set forth in the a registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" Date (as defined in hereinafter defined), among the ------------------------------ Registration Rights Agreement)Company, the Guarantors and the Representative. Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree agree, among other things, to file with the Securities and Exchange Commission SEC (the "COMMISSION") under the circumstances set forth therein, (ia) a registration ---------- statement under the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), notes to be offered in exchange for the Series A ------------------- Debentures Notes (the “Exchange Notes”) which shall be identical to the Notes, except that the Exchange Notes shall have been registered pursuant to the Exchange Offer Registration Statement and will not be subject to restrictions on transfer or contain additional interest provisions, (such offer to exchange being referred to as the "EXCHANGE OFFER"“Exchange Offer”), and/or (b) -------------- and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in Notes. If required under the Registration Rights Agreement and Agreement, the Company will issue Exchange Notes to consummate the Initial Purchasers (the “Private Exchange OfferNotes”). This Agreement, the Indenture, the Debentures Registration Rights Agreement, the Notes, the Guarantees, the Exchange Notes and the Registration Rights Agreement Private Exchange Notes are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTS“Documents”, and the transactions contemplated hereby and thereby are collectively referred to herein as the “Transactions." -------------------”

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Senior Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act ("QIBSQIBs"), and (ii) a limited number of other institutional "accredited investors," as defined in Rule 501(a) (1), (2), (3) or (7) under the Securities Act, that make certain representations and agreements to the Company (each, an "ACCREDITED INSTITUTION") and (iii) to non-U.S. persons permitted to ---- purchase outside the Series A Debentures in offshore transactions United States in reliance upon Regulation S under the Securities Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i), (ii) and (iiiii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers Purchaser will offer the Series A Debentures Senior Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Senior Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Senior Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Subsidiary Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to (A) the Issuers' new series of 13 3/8Company's 11% Series B Senior Discount Debentures Notes due 2009 2007 (the "SERIES B DEBENTURESSENIOR NOTES"), ) to be offered in exchange for the Series A ------------------- Debentures Senior Notes (such offer to exchange being referred to as the "REGISTERED EXCHANGE OFFER") -------------- and and/or (ii) a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Senior Notes, and to use its their reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Registered Exchange Offer. This Agreement, the Indenture, the Debentures Senior Notes, the Subsidiary Guarantees and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) to persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers Purchaser will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.17553.092% of the principal amount at maturity thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of Company's 13 3/81/8% Series B Senior Discount Subordinated Debentures due 2009 (the "SERIES B DEBENTURES"), to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and Debentures, the Registration Rights Agreement, the Merger Agreement and the New Credit Facility are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company, and the Company understands, that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Final Offering MemorandumCircular, as amended or supplemented, solely to persons (the “Subsequent Purchasers”) (i) persons outside the United States in compliance with Regulation S of the Act, or (ii) whom the Initial Purchasers Purchaser (A) reasonably believe believes to be "“qualified institutional buyers" ” as defined in Rule 144A under the Act ("QIBS"“QIBs”), as such Rule may be amended from time to time, or (B) reasonably believes (based upon written representations made by such persons to the Initial Purchaser) to be institutional “accredited investors” (“Accredited Investors”) as defined in Rule 501(a)(l), (2), (3) or (7) under the Act. Pursuant to the Indenture, all Domestic Restricted Subsidiaries of the Company (other than Immaterial Subsidiaries) as of the Closing Date (as hereinafter defined) and all future Domestic Restricted Subsidiaries of the Company (other than future Immaterial Subsidiaries), jointly and severally, shall fully and unconditionally guarantee, on a senior secured basis, to each holder of the Notes and the Trustee, the payment and performance of the Company’s obligations under the Indenture and the Notes (each such guarantee being referred to herein as a “Guarantee”). Pursuant to the terms of the Indenture and the Collateral Agreements (as defined in the Indenture), all of the Company’s and each Guarantor’s obligations under the Indenture and the Notes will be secured by a lien and security interest on substantially all of the Company’s and its subsidiaries’ assets, subject to certain exceptions; provided, however, that pursuant to the terms of the Intercreditor Agreement, the security interest in those assets consisting of receivables, inventory, deposit accounts, securities accounts and certain other assets that secure the Notes and Guarantees (other than the Escrow Account (as defined below) and funds and investment property on deposit therein or credited thereto and certain other excluded assets) will be contractually subordinated to the lien of the Administrative Agent (as defined below) that secures the obligations (i) under the Company’s $25.0 million credit agreement, dated as of August 23, 2006 (the “Credit Agreement”), among the Company, the guarantors party thereto, as borrowers, the lenders party thereto and The CIT Group/Business Credit, Inc., as administrative agent (the “Administrative Agent”), and (ii) persons certain other permitted Indebtedness, in each case, to ---- purchase the Series A Debentures extent provided in offshore transactions in reliance upon Regulation S under the Act Intercreditor Agreement. Pursuant to that certain agreement and plan of merger, dated as of February 23, 2007 (eachthe “Merger Agreement”), among the Company, Eureka Acquisition Corporation, our wholly-owned Delaware subsidiary (“Eureka Acquisition”), Eureka Broadband Corporation, d/b/a InfoHighway Communications, a "REGULATION S PURCHASER"Delaware corporation (“InfoHighway”), certain significant shareholders of InfoHighway and the agent for the shareholders of InfoHighway, Eureka Acquisition will be merged with and into InfoHighway, with InfoHighway continuing as the surviving corporation and the Company’s wholly-owned subsidiary (the “Merger” and, together with the offer and sale of the Notes, the “Transactions”). Pursuant to the escrow agreement, to be dated as of the Closing Date (the “Escrow Agreement”), among the Company, the Trustee and The Bank of New York, as escrow agent (the “Escrow Agent”), the gross proceeds from the sale of the Notes, together with available cash, will be deposited into an escrow account (the “Escrow Account”) in an amount equal to the sum of (such persons ---------------------- specified in clauses (ix) $90.0 million multiplied by the issue price of the Notes and (iiy) being referred the amount of interest that would accrue on the Notes for the period from March 1, 2007 to herein as August 31, 2007 (the "ELIGIBLE -------- PURCHASERS"“Required Escrow Deposit”). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% Holders of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transfereesSubsequent Purchasers) of the Series A Debentures will have the registration rights set forth in the registration rights agreement applicable to the Notes (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" Date (as defined in the ------------------------------ Registration Rights Agreementhereinafter defined). Pursuant to the Registration Rights Agreement, the Issuers Initial Purchaser and the Company will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION"“SEC”) under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to 113/8% senior secured notes due 2012 (the “Exchange Notes”) which shall be identical to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 Notes (except that the "SERIES B DEBENTURES"), Exchange Notes shall have been registered pursuant to such registration statement and will not be subject to restrictions on transfer or contain additional interest provisions) to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and “Exchange Offer”), and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in Notes. If required under the Registration Rights Agreement Agreement, the Company will issue Exchange Notes and cause the Guarantors to consummate issue exchange guarantees to the Initial Purchaser (the “Private Exchange OfferNotes” and “Private Exchange Guarantees”, respectively). If the Company fails to satisfy its obligations under the Registration Rights Agreement, it will be required to pay additional interest to the holders of the Notes under certain circumstances in accordance with the terms of the Registration Rights Agreement. This Agreement, the Indenture, the Debentures and Collateral Agreements, the Registration Rights Agreement, the Notes, the Guarantees, the Exchange Notes, the Private Exchange Notes, if any, the Private Exchange Guarantees, if any, and the Escrow Agreement are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTS“Documents." -------------------”

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and ) or (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing DateDate (as defined below), in ----------------------------- substantially the form of Exhibit A B hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSION") ), under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 7 3/4 % Series B Senior Discount Debentures Subordinated Notes due 2009 (the "SERIES B DEBENTURESNOTES"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) to persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A H hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 9.25% Series B Senior Discount Debentures Notes due 2009 2006 (the "SERIES B DEBENTURESNOTES"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company, and the Company understands, that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALESExempt Resales") some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Final Offering MemorandumCircular, as amended or supplemented, solely to persons (the "Subsequent Purchasers") (i) persons outside the United States in compliance with Regulation S of the Act, or (ii) whom the Initial Purchasers Purchaser (A) reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and as such Rule may be amended from time to time, or (iiB) reasonably believes (based upon written representations made by such persons permitted to ---- purchase the Series A Debentures Initial Purchaser) to be institutional "accredited investors" ("Accredited Investors") as defined in offshore transactions in reliance upon Regulation S Rule 501(a)(1), (2), (3) or (7) under the Act Act. Pursuant to the Indenture, all Domestic Restricted Subsidiaries of Eschelon Telecom, Inc. (each, a the "REGULATION S PURCHASERParent") as of the Closing Date (such persons ---------------------- specified in clauses (ias hereinafter defined) and all future Domestic Restricted Subsidiaries of the Parent (ii) other than the Company), jointly and severally, shall fully and unconditionally guarantee, on a senior basis, to each holder of the Notes and the Trustee, the payment and performance of the Company's obligations under the Indenture and the Notes (each such guarantee being referred to herein as the a "ELIGIBLE -------- PURCHASERSGuarantee"). The Initial Purchasers will offer Pursuant to the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% terms of the principal amount thereof. Such price may Collateral Agreements (as defined in the Indenture), all of the Company's obligations under the Indenture and the Notes will be changed at any time without noticesecured by a second priority lien and security interest in substantially all of the assets of the Parent and its Domestic Restricted Subsidiaries (except for a prior ranking lien in favor of the lenders under a Credit Agreement and in favor of the holders of certain other Permitted Liens) in favor of the Trustee, as secured party for itself and for the benefit of the holders of the Notes, the Exchange Notes and the Private Exchange Notes (the "Secured Parties"). Holders of the Notes (including subsequent transfereesSubsequent Purchasers) of the Series A Debentures will have the registration rights set forth in the registration rights agreement applicable to the Notes (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" Date (as defined in the ------------------------------ Registration Rights Agreementhereinafter defined). Pursuant to the Registration Rights Agreement, Parent and the Issuers Company will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSIONSEC") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 senior second secured notes (the "SERIES B DEBENTURESExchange Notes"), ) which shall be identical to the Notes (except that the Exchange Notes shall have been registered pursuant to such registration statement and will not be subject to restrictions on transfer or contain additional interest provisions) to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and ), and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Shelf Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures and Notes. If required under the Registration Rights Agreement, the Company will issue Exchange Notes to use the Initial Purchaser (the "Private Exchange Notes"). If the Company fails to satisfy its best efforts obligations under the Registration Rights Agreement, it will be required to cause such Registration Statements pay additional interest to be declared and remain effective and usable for the periods specified holders of the Notes under certain circumstances, as set forth in the Registration Rights Agreement and to consummate the Exchange OfferAgreement. This Agreement, the Indenture, the Debentures and Collateral Agreements, the Registration Rights Agreement Agreement, the Notes, the Guarantees, the Exchange Notes, the Private Exchange Notes and the Escrow Agreement, to be dated November 29, 2004 (the "Escrow Agreement"), among the Company, the Guarantors and The Bank of New York Trust Company, N.A., as escrow agent (the "Escrow Agent"), pursuant to which the Company will deposit the gross proceeds from the Offering in an escrow account (the "Escrow Account"), are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTSDocuments." -------------------The Parent (as defined below) is proposing to acquire 100% of the issued and outstanding shares of Advanced TelCom, Inc. (the "ATI Acquisition"), subject to receipt of the consents, approvals, authorizations and orders listed in Exhibit 8.2(b) of the Acquisition Agreement (as defined below) (the "ATI Approvals"), and substantially all of the assets of GE Business Productivity Systems, subject to receipt of regulatory consents, approvals, authorizations and orders in connection therewith (the "GEBPS Approvals"), in each case, following completion of the Offering. The ATI Approvals, the GEBPS Approvals and regulatory approvals of the encumbrance of the assets of the Company and its subsidiaries in connection with this Offering are collectively referred to herein as the "Approvals", and all such Approvals are expected to be received after the Closing Date.

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company, and the Company understands, that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Final Offering MemorandumCircular, as amended or supplemented, solely to persons (the “Subsequent Purchasers”) (i) persons outside the United States in compliance with Regulation S of the Act, or (ii) whom the Initial Purchasers Purchaser (A) reasonably believe believes to be "“qualified institutional buyers" ” as defined in Rule 144A under the Act ("QIBS"“QIBs”), as such Rule may be amended from time to time, or (B) reasonably believes (based upon written representations made by such persons to the Initial Purchaser) to be institutional “accredited investors” (“Accredited Investors”) as defined in Rule 501(a)(l), (2), (3) or (7) under the Act. Pursuant to the Indenture, all Domestic Restricted Subsidiaries of the Company (other than Immaterial Subsidiaries) as of the Closing Date (as hereinafter defined) and all future Domestic Restricted Subsidiaries of the Company (other than future Immaterial Subsidiaries), jointly and severally, shall fully and unconditionally guarantee, on a senior secured basis, to each holder of the Notes and the Trustee, the payment and performance of the Company’s obligations under the Indenture and the Notes (each such guarantee being referred to herein as a “Guarantee”). Pursuant to the terms of the Indenture and the Collateral Agreements (as defined in the Indenture), all of the Company’s and each Guarantor’s obligations under the Indenture and the Notes will be secured by a lien and security interest on substantially all of the Company’s and its subsidiaries’ assets, subject to certain exceptions; provided, however, that pursuant to the terms of the Intercreditor Agreement, the security interest in those assets consisting of receivables, inventory, deposit accounts, securities accounts and certain other assets that secure the Notes and Guarantees (other than the Escrow Account (as defined below) and funds and investment property on deposit therein or credited thereto and certain other excluded assets) will be contractually subordinated to the lien of the Administrative Agent (as defined below) that secures the obligations (i) under the Company’s new $25.0 credit agreement, to be dated as of the Closing Date (the “New Credit Agreement”), among the Company, the guarantors party thereto, as borrowers, the lenders party thereto and The CIT Group/Business Credit, Inc., as administrative agent (the “Administrative Agent”), and (ii) persons certain other permitted Indebtedness, in each case, to ---- purchase the Series A Debentures extent provided in offshore transactions in reliance upon Regulation S under the Act (eachIntercreditor Agreement. Concurrently with the sale of the Notes on the Closing Date, the Company intends to use a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses portion of the proceeds to, among other things, (i) repay all of the indebtedness outstanding under that certain amended and restated senior secured revolving credit facility, dated as of January 14, 2005 (the “Existing Credit Agreement”), among the Company, other persons designated as “Credit Parties” on the signature pages thereof, each Lender signatory thereto, and NTFC Capital Corporation, as Administrative Agent, and Wachovia Bank, National Association as Syndication Agent (the “Credit Agreement Repayment”) and pay fees, expenses and commissions related thereto and (ii) being referred to herein repay certain indebtedness outstanding under those certain senior unsecured subordinated notes due 2009 issued pursuant to that certain note purchase agreement (the “Note Purchase Agreement”), dated as of January 14, 2005 among the "ELIGIBLE -------- PURCHASERS"Company, the purchasers party thereto and MCG Capital Corporation, as Administrative Agent and as amended on June 29, 2005 and July 20, 2006 (the “Note Repayment” and, together with the Credit Agreement Repayment, the “Repayments”). The Initial Purchasers will Company also intends, on the Closing Date, to convert the remainder of its senior unsecured subordinated notes due 2009 and 2007 into shares of the Company’s preferred stock that is not Disqualified Capital Stock (as defined in the Offering Circular) (the “Conversion” and, together with the Acquisition (defined below), the Repayments and the offer and sale of the Series A Debentures Notes, the “Transactions”). The Company has also agreed pursuant to ---------- Eligible Purchasers initially at that certain stock purchase agreement, dated as of June 26, 2006 (the “Acquisition Agreement”), among the Company, ATX Communications, Inc., a price equal Delaware corporation (“ATX”), the shareholders of ATX Communications, Inc. and, for the limited purposes set forth therein, Leucadia National Corporation, to 52.175acquire (the “Acquisition”) 100% of the issued and outstanding capital stock of ATX. Pursuant to the escrow agreement, to be dated as of the Closing Date (the “Escrow Agreement’’), among the Company, the Trustee and The Bank of New York, as escrow agent (the “Escrow Agent”), the Company will deposit into an escrow account (the “Escrow Account”) a portion of the proceeds from the offering in an amount equal to the sum of (x) $95.0 million and (y) the amount of interest that would accrue on the Notes in an aggregate principal amount thereofof $95.0 million for the period from the Closing Date to December 20, 2006 (the amount of such sum, the “Initial Escrowed Funds Amount”). Such price may Pursuant to the terms of the Escrow Agreement, the funds held in the Escrow Account will be changed released to the Company upon delivery to the Trustee of an Officers’ Certificate certifying, among other things, that certain conditions, as more fully described therein, have been satisfied. Otherwise, if such certificate is not delivered by December 20, 2006 or the Company notifies the Trustee that the Acquisition is being terminated, the funds will be released to the Trustee to effectuate a redemption of the Notes in an aggregate principal amount of $95.0 million at any time without noticepar plus accrued and unpaid interest thereon to the redemption date. Holders of the Notes (including subsequent transfereesSubsequent Purchasers) of the Series A Debentures will have the registration rights set forth in the registration rights agreement applicable to the Notes (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" Date (as defined in the ------------------------------ Registration Rights Agreementhereinafter defined). Pursuant to the Registration Rights Agreement, Company and the Issuers Company will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION"“SEC”) under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to 11 3/8% senior secured notes due 2012 (the “Exchange Notes”) which shall be identical to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 Notes (except that the "SERIES B DEBENTURES"), Exchange Notes shall have been registered pursuant to such registration statement and will not be subject to restrictions on transfer or contain additional interest provisions) to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and “Exchange Offer”), and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in Notes. If required under the Registration Rights Agreement Agreement, the Company will issue Exchange Notes and cause the Guarantors to consummate issue exchange guarantees to the Initial Purchaser (the “Private Exchange OfferNotes” and “Private Exchange Guarantees”, respectively). If the Company fails to satisfy its obligations under the Registration Rights Agreement, it will be required to pay additional interest to the holders of the Notes under certain circumstances in accordance with the terms of the Registration Rights Agreement. This Agreement, the Indenture, the Debentures and Collateral Agreements, the Registration Rights Agreement, the Notes, the Guarantees, the Exchange Notes, the Private Exchange Notes, if any, the Private Exchange Guarantees, if any and the Escrow Agreement are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTS“Documents." -------------------”

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers, and the Issuers understand, that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Offered Securities purchased by the Initial Purchasers hereunder on the terms set forth in the Offering Memorandum, Time of Sale Document to persons (the “Subsequent Purchasers”) (the first time when sales of the Securities are made is referred to as amended or supplemented, solely to (ithe “Time of Sale”) persons whom the Initial Purchasers reasonably believe to be "(i) are “qualified institutional buyers" ” (“QIBs”) (as defined in Rule 144A under the Act ("QIBS"Securities Act), and or (ii) persons permitted to ---- purchase the Series A Debentures are not “U.S. persons” (as defined in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER"Securities Act) (and in compliance with the laws applicable to such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% jurisdictions outside of the principal amount thereof. Such price may be changed at any time without noticeUnited States. Holders of the Securities (including subsequent transfereesSubsequent Purchasers) will be entitled to the benefits of the Series A Debentures will have the registration rights set forth in the a registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" Date (as defined in the ------------------------------ Registration Rights Agreementhereinafter defined). Pursuant to the Registration Rights Agreement, the Issuers will agree agree, among other things, to file with the Securities and Exchange Commission SEC (the "COMMISSION") under the circumstances set forth therein, (ia) a registration ---------- statement under the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), notes to be offered in exchange for the Series A ------------------- Debentures Securities (the “Exchange Securities”) which shall be identical to the Securities, except that the Exchange Securities shall have been registered pursuant to the Exchange Offer Registration Statement and will not be subject to restrictions on transfer or contain additional interest provisions, (such offer to exchange being referred to as the "EXCHANGE OFFER"“Exchange Offer”), and/or (b) -------------- and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures and Securities. If required under the Registration Rights Agreement, the Issuers will issue Exchange Securities to use its best efforts the Initial Purchasers (the “Private Exchange Securities”). If the Issuers fail to cause such satisfy their obligations under the Registration Statements Rights Agreement, the Issuers will be required to pay additional interest to the holders of the Securities under certain circumstances to be declared and remain effective and usable for the periods specified set forth in the Registration Rights Agreement and to consummate the Exchange OfferAgreement. This Agreement, the Indenture, the Debentures and Collateral Documents, the Registration Rights Agreement Agreement, the Notes, the Guarantees, the Engagement Letter dated April 18, 2013 (the “Engagement Letter”) between the Issuers and Xxxxxxxxx LLC, the Exchange Securities and the Private Exchange Securities are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTS“Documents”, and the transactions contemplated hereby and thereby are collectively referred to herein as the “Transactions." -------------------” Nothing in this Agreement shall be read to limit or otherwise modify the terms and provisions of the Engagement Letter, provided that, in the event any terms of the Engagement Letter are inconsistent with or contradict any terms of this Agreement, this Agreement shall govern.

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers, and the Issuers understand, that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Stage I Notes purchased by the Initial Purchasers hereunder on the terms set forth in the Final Offering Memorandum, as amended or supplemented, solely Memorandum to persons (ithe “Subsequent Purchasers”) persons whom the Initial Purchasers reasonably believe to be "(i) are “qualified institutional buyers" ” (“QIBs”) (as defined in Rule 144A under the Act ("QIBS"Securities Act), and or (ii) persons permitted to ---- purchase are not “U.S. persons” (as defined in Regulation S under the Series A Debentures in offshore transactions Securities Act) in reliance upon Regulation S under the Securities Act and in compliance with the laws applicable to such persons in jurisdictions outside of the United States. Pursuant to the terms of the Escrow Agreement, until the consummation of the Acquisition and until the Company is required by the Stage I Indenture to pledge its assets (eachas described in the “Description of the Stage I Notes” section of the Final Offering Memorandum), all of the obligations under the Stage I Notes and the Stage I Indenture will be secured by a "REGULATION S PURCHASER"pledge of the Escrow Account and all cash proceeds deposited therein (including cash proceeds of the Offering) (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as collectively, the "ELIGIBLE -------- PURCHASERS"“Stage I Collateral”). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% Upon consummation of the principal amount thereofAcquisition (and the concurrent merger of the Stage I Issuer with and into the Company), pursuant to the terms of the Parity Lien Security Documents, all of the obligations under the Stage I Notes will be secured by a lien and security interest in substantially all of the assets of the Company (subject to a prior ranking lien by the lenders under the Amended and Restated Credit Agreement by and among the Company, PNC Bank, National Association, as agent, and the lenders party thereto (the “ABL Secured Lenders”) on ABL Priority Collateral and other Permitted Prior Liens). Such price may Upon consummation of the Stage II Notes Exchange Redemption, pursuant to the terms of the Parity Lien Security Documents, all of the obligations under the Stage II Notes and the Existing Indenture will be changed at any time without noticesecured by a lien and security interest in substantially all of the assets of the Company and the Subsidiaries (including, the applicable Multiband Entities, but subject to a prior ranking lien by the ABL Secured Lenders on ABL Priority Collateral and other Permitted Prior Liens). Holders of the Stage II Notes (including subsequent transfereesSubsequent Purchasers) of the Series A Debentures will have the registration rights set forth in the registration rights agreement applicable to the Stage II Notes (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), which will be in a form to be agreed upon, but to be substantially consistent (other than with respect to certain time periods) with the registration rights agreement entered into in connection with the issuance of the Existing Xxxxxxx Notes with such conforming changes as are necessary to reflect the Registration Rights Agreement’s applicability to the Stage II Notes, to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" Date (as defined in the ------------------------------ Registration Rights Agreementhereinafter defined). Pursuant to the Registration Rights Agreement, the Issuers Company and, following their execution and delivery of the joinder agreement thereto, the Multiband Entities will agree agree, among other things, to file with the Securities and Exchange Commission SEC (the "COMMISSION") under the circumstances set forth therein, (ia) a registration ---------- statement under the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), notes to be offered in exchange for the Series A ------------------- Debentures Stage II Notes (the “Exchange Notes”), and guarantees to be offered in exchange for the Guarantees (the “Exchange Guarantees”) which shall be identical to the Stage II Securities, except that the Exchange Notes and Exchange Guarantees shall have been registered pursuant to the Exchange Offer Registration Statement and will not be subject to restrictions on transfer or contain additional interest provisions, (such offer to exchange being referred to as the "EXCHANGE OFFER"“Exchange Offer”), and/or (b) -------------- and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures and Stage II Notes. If required under the Registration Rights Agreement, the Company will issue Exchange Notes to use the Initial Purchasers (the “Private Exchange Notes”). If the Company fails to satisfy its best efforts obligations under the Registration Rights Agreement, it will be required to cause such Registration Statements pay additional interest to the holders of the Stage II Notes under certain circumstances to be declared and remain effective and usable for the periods specified set forth in the Registration Rights Agreement and to consummate the Exchange OfferAgreement. This Agreement, the IndentureIndentures, the Debentures and Parity Lien Security Documents, the Registration Rights Agreement Agreement, the Notes, the Guarantees, the Escrow Agreement, the Engagement Letter dated April 18, 2013 (the “Engagement Letter”) between the Company and the Initial Purchasers, the Exchange Notes, Exchange Guarantees and the Private Exchange Notes are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTS“Documents”, and the transactions contemplated hereby and thereby are collectively referred to herein as the “Transactions." -------------------” Nothing in this Agreement should be read to limit or otherwise modify the terms and provisions of the Engagement Letter, provided that, in the event any terms of the Engagement Letter are inconsistent with or contradict any terms of this Agreement, this Agreement shall govern.

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the Subsidiary Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/88 1/2% Series B Senior Discount Debentures Subordinated Notes due 2009 2011 (the "SERIES Series B DEBENTURESNotes"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and the Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------be

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), ) and (ii) persons permitted to ---- purchase the Series A Debentures not more than five (5) other institutional "accredited investors," as defined in offshore transactions in reliance upon Regulation S Rule 501(a) (1),(2),(3) or (7) under the Act Act, that make certain representations and agreements to the Company (each, a an "REGULATION S PURCHASERACCREDITED INSTITUTION") ), (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Securities will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Securities constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Securities and to use its reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------be

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Co-Issuers, and the Co-Issuers understand, that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Final Offering MemorandumCircular, as amended or supplemented, solely to persons (the “Subsequent Purchasers”) whom the Initial Purchaser (i) persons whom the Initial Purchasers reasonably believe believes to be "“qualified institutional buyers" ” (“QIBs”) as defined in Rule 144A under the Act ("QIBS")Securities Act, and as such may be amended from time to time, (ii) reasonably believes (based upon written representations made by such persons permitted to ---- purchase the Series A Debentures Initial Purchaser) to be institutional “accredited investors” as defined in offshore transactions Rule 501(a)(1), (2), (3) or (7) under the Securities Act (“Accredited Investors”) or (iii) reasonably believes to be non-”U.S. persons” or non-”U.S. purchasers” (as defined in Regulation S under the Securities Act) in reliance upon Regulation S under the Act Securities Act. Pursuant to the Indenture, all existing and future Domestic Subsidiaries of the Company (eachother than Capital) shall fully and unconditionally guarantee, on a "REGULATION S PURCHASER") joint and several senior secured basis, to each holder of the Notes and the Trustee, the payment and performance of the Co-Issuers’ obligations under the Indenture and the Notes (each such persons ---------------------- specified in clauses (i) and (ii) guarantee being referred to herein as the "ELIGIBLE -------- PURCHASERS"a “Guarantee”). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% Holders of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transfereesSubsequent Purchasers) of the Series A Debentures will have the registration rights set forth in the registration rights agreement applicable to the Notes (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement)date hereof. Pursuant to the Registration Rights Agreement, the Co-Issuers and the Guarantors will agree agree, among other things, to (i) file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (ia) a registration ---------- statement under the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Registration Statement”) relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 Notes (the "SERIES B DEBENTURES"“Exchange Notes”), the Guarantees (the “Exchange Guarantees”) and the Collateral Agreements (the “Exchange Collateral Agreements”), each of which shall be identical to the Notes (except that the Exchange Notes shall have been registered pursuant to such registration statement and will not be offered in exchange for subject to restrictions on transfer or liquidated damages), the Series A ------------------- Debentures Guarantees and the Collateral Agreements, respectively (such offer to exchange being referred to as the "EXCHANGE OFFER"“Exchange Offer”), and/or (b) -------------- and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" and“Shelf Registration Statement”) covering the resale of the Notes, together with (ii) use all commercially reasonable efforts to cause the Registration Statement or the Shelf Registration Statement, as the case may be, to be declared effective under the Securities Act and (iii) use all commercially reasonable efforts to consummate the Exchange Offer ---------------------------- or maintain the effectiveness of the Shelf Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable in each case, within or for the time periods specified in the Registration Rights Agreement Agreement, and subject to consummate the provisions contained therein. If required under the Registration Rights Agreement, the Co-Issuers will issue Exchange Notes to the Initial Purchaser (the “Private Exchange Notes,” and collectively with the Notes and the Exchange OfferNotes, the “Securities”). If the Co-Issuers and the Guarantors fail to satisfy their obligations under the Registration Rights Agreement, they will be required to pay additional interest to the holders of the Notes under certain circumstances. This Agreement, the Indenture, the Debentures and Collateral Agreements, the Registration Rights Agreement Agreement, the Guarantees, and the Securities are hereinafter sometimes collectively referred to herein as the “Transaction Documents,” and the transactions contemplated hereby and thereby are referred to herein collectively as the "OPERATIVE DOCUMENTS“Transactions." -------------------”

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Terex that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- some or all of the Series A Debentures Units purchased by the Purchasers hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to ---- purchase the Series A Debentures a limited number of institutional "accredited investors," as defined in offshore transactions in reliance upon Regulation S Rule 501(a)(1), (2), (3) or (7) under the Act (each, a "REGULATION S PURCHASERAccredited Investors") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTDebt Registration Rights Agreement"), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Debt Registration Rights Agreement, Terex and the Issuers Guarantors will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTDebt Exchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/813.25% Senior Discount Debentures Notes due 2009 2002, Series B of Terex, each with the related Guaranty endorsed thereon (the "SERIES Debt Series B DEBENTURESNotes" and, together with the Series A Notes, the "Notes"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERDebt Registered Exchange Offer") -------------- and and/or (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Debt Shelf Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes. Holders of the Series A Rights will have the registration rights set forth in the common stock appreciation rights registration rights agreement (the "SAR Registration Rights Agreement" and to use its best efforts to cause such together with the Debt Registration Statements Rights Agreement, the "Registration Rights Agreements"), to be declared executed on and remain effective dated as of the Closing Date. Pursuant to the SAR Registration Rights Agreement, Terex will agree, among other things, to file with the Securities and usable Exchange Commission (i) a registration statement under the Act (the "SAR Exchange Offer Registration Statement" and together with the Debt Exchange Offer Registration Statement, the "Exchange Offer Registration Statements") relating to the 1,000,000 Common Stock Appreciation Rights, Series B of Terex (the "Series B Rights" and together with the Series A Rights, the "Rights", and the Series B Rights together with the Series B Notes, the "Exchange Securities"), to be offered in exchange for the periods specified Series A Rights (the "SAR Registered Exchange Offer" and together with the Debt Registered Exchange Offer, the "Registered Exchange Offers") and/or (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SAR Shelf Registration Statement" and together with the Debt Shelf Registration Statement, the "Shelf Registration Statements") relating to the resale of the Series A Rights. On the Closing Date, the Grantors will enter into security agreements, mortgages, deeds of trust and certain other collateral assignment agreements (collectively, the "Collateral Agreements") that will provide for the grant of the Security Interests in the Registration Rights Agreement Collateral to the Trustee, as collateral agent (in such capacity, the "Collateral Agent"), for the benefit of the holders of the Notes. The Security Interests will secure the payment and to consummate performance when due of all of the Exchange Offer. This Agreementobligations of the Company, the Guarantors and the Grantors, under the Indenture, the Debentures Notes, and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSCollateral Agreements." -------------------

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) this clause being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.17550.797% of the principal amount at maturity thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 14% Series B Senior Discount Debentures Notes due 2009 (the "SERIES B DEBENTURESNOTES"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSStatements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have advised the Company ----------------- Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of the -------------- the Series A Debentures purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being also referred to herein ---- as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures to ---------- ------------------- Eligible Purchasers initially at a price equal to 52.17558.866% of the principal amount at maturity thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Securities will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in substantially ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Securities constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights ------------------------------ Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") ---------- under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to ---------------------- the resale by ----------------------- certain holders of the Series A Debentures Securities and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange OfferAgreement. This Agreement, the Indenture, the Debentures Debentures, and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS.Operative Documents" -------------------

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) if the Initial Purchasers so notify ---- the Company, institutional "accredited investors," as defined in Rule 501(a)(1), (2), (3) or (7) under the Act, that make certain representations to and agreement with the Company (each an "ACCREDITED INSTITUTION"), and (iii) to ---------------------- persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") ---------------------- (such persons ---------------------- specified in clauses (i), (ii) and (iiiii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures ------------------- Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100.0 % of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the Registration ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a ---------- registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION --------------------------- STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 11 1/2 % Series B Senior Discount Debentures Subordinated --------- Notes due 2009 (the "SERIES B DEBENTURESNOTES"), to be offered in exchange for the Series -------------- A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") and -------------- the Guarantees by the Guarantors thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, ---------------------------- together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION ------------ STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and ---------- to use its their best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and Notes, the Guarantees, the Registration Rights Agreement, the Acquisition Agreement and the New Credit Agreements are hereinafter sometimes referred to collectively as the "OPERATIVE --------- DOCUMENTS." ----------------------------

Terms of Offering. The Initial Purchasers have advised Purchaser has advised, and represents and warrants to, the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers and sales (the "EXEMPT RESALES") of -------------- the Series A Debentures Restricted Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" (as defined in Rule 144A promulgated under the Act Act) ("QIBS"), and (ii) to persons permitted to ---- purchase the Series A Debentures Restricted Notes in offshore transactions in reliance upon Regulation S under the Act (each, each a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) QIBs and (ii) Regulation S Purchasers being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers Purchaser will offer the Series A Debentures Restricted Notes to ---------- Eligible Purchasers initially at a price equal to 52.175% the percentage of the principal amount thereof. Such price may be changed at any time without noticethereof set forth on the cover page of the Offering Memorandum. Holders (including subsequent transferees) of the Series A Debentures Restricted Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Restricted Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file (i) with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, therein (iA) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' two new series of 13 3/8% the Company's Senior Discount Debentures due 2009 Notes of like amounts having identical terms (the "SERIES B DEBENTURESEXCHANGE NOTES"), ) to be offered in exchange for the Series A ------------------- Debentures Restricted Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and and/or (iiB) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Restricted Notes and (ii) to use its reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Restricted Notes, and the Registration Rights Agreement are hereinafter sometimes referred to collectively herein as the "OPERATIVE DOCUMENTSDocuments." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) persons permitted to ---- purchase the Series A Debentures not more than ten other institutional "accredited investors," as defined in offshore transactions in reliance upon Regulation S Rule 501(a) (1), (2), (3) or (7) under the Act Act, who execute a letter containing certain representations and agreements in the form set forth as Annex A to the Offering Circular (each, a an "REGULATION S PURCHASERAccredited Institution") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.17598.770% of the principal amount thereof. Such price may be changed at any time without notice. Holders (as defined in the Indenture, including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 10% Senior Discount Debentures First Mortgage Notes due 2009 (the "SERIES B DEBENTURES"), 2004 to be offered in exchange for the Series A ------------------- Debentures Notes (the "Series B Notes") (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and the Subsidiary Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. The Notes are or will be secured obligations and the Company and the Guarantors (to the extent they are a party thereto) will enter into a security agreement, a deed of trust, stock pledge and security agreements, and certain other agreements (collectively, the "Security Documents") dated as of the Closing Date in favor of the Trustee that will provide for the grant of Security Interests in the collateral to the Trustee for the benefit of the holders of the Notes. The Security Interests will secure the payment and performance when due of all the respective obligations of the Company and the Guarantors under the Indenture, the Notes and the Security Documents. This Agreement, the Indenture, the Debentures and Notes, the Subsidiary Guarantees, the Registration Rights Agreement and the Security Documents are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 10 1/8% Series B Senior Discount Debentures Notes due 2009 (the "SERIES Series B DEBENTURESNotes"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and the Subsidiary Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its their best efforts to cause such Registration Statements to be declared and remain effective within 150 days after the Closing Date and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, the Subsidiary Guarantees and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------Concurrently with the Offering of the Notes, the Company will restructure its operations as described in the Offering Memorandum under the heading "Reorganization of the Company" (the "Reorganization") and enter into the New Credit Facility (as defined in the Offering Memorandum).

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Issuer that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES") some or all of -------------- the Series A Debentures Offered Securities purchased by the Purchasers hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to ---- purchase the Series A Debentures a limited number of institutional "accredited investors," as defined in offshore transactions in reliance upon Regulation S Rule 501(a)(1), (2), (3) or (7) under the Act (each, a "REGULATION S PURCHASERACCREDITED INVESTORS") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% Holders of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "NOTES REGISTRATION RIGHTS AGREEMENT") to be executed on and dated as of the Closing Date (defined below). Holders of the Senior Preferred Stock (including subsequent transferees) will have the registration rights set forth in the registration rights agreement (the "PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT" and, together with the Notes Registration Rights Agreement, the "REGISTRATION RIGHTS AGREEMENTS"), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights AgreementAgreements, the Issuers Issuer will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to to, among other things, the Issuers' new series 10-3/4% Series D Senior Notes due 2006 of 13 3/8% Senior Discount Debentures due 2009 the Issuer (the "SERIES B DEBENTURESEXCHANGE SENIOR NOTES"), and the 13% Series B Senior Exchangeable Preferred Stock Due 2007 of the Issuer (the "EXCHANGE SENIOR PREFERRED STOCK" and, together with the Exchange Senior Notes, the "EXCHANGE SECURITIES") identical in all material respects to the Notes and the Senior Preferred Stock (except that the Exchange Securities shall have been registered pursuant to such registration statement) to be offered in exchange for the Series A ------------------- Debentures Notes and the Senior Preferred Stock (such offer to exchange being referred to as the "REGISTERED EXCHANGE OFFEROffer") -------------- and and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared the Senior Preferred Stock. Collectively, the Offered Securities and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. Securities shall be referred to as the "SECURITIES." This Agreement, the Indenture, the Debentures and Certificate of Designation, the Registration Rights Agreements, the Notes, the Senior Preferred Stock, the Asset Purchase Agreement and all other documents or instruments executed by the Issuer or any of its Subsidiaries in connection with the transactions contemplated hereby and thereby are hereinafter sometimes referred to collectively herein as the "OPERATIVE DOCUMENTS." -------------------The transactions contemplated by the Documents, including, without limitation, (a) the Offering and the use of the proceeds therefrom as described in the Offering Circular and (b) the Acquisition, are collectively referred to herein as the "TRANSACTIONS."

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175102% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the Subsidiary Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/88 1/2% Series B Senior Discount Debentures Subordinated Notes due 2009 2011 (the "SERIES Series B DEBENTURESNotes"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and the Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, the Guarantees and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. The Initial Purchasers have advised the Company ----------------- Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of the Notes -------------- the Series A Debentures purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being also referred to herein as the ---- "ELIGIBLE -------- PURCHASERSEligible Purchasers"), or to non-U.S. persons ("Regulation S Buyers") in ------------------- accordance with Rule 903 under the Act. The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers and Regulation S Buyers initially at a price equal to 52.17583.978% of the principal amount at maturity thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Securities will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in substantially ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Securities constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights ------------------------------ Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") ---------- under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to ---------------------- the resale by ----------------------- certain holders of the Series A Debentures Securities and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange OfferAgreement. This Agreement, the Indenture, the Debentures Notes, and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." Operative Documents". -------------------

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) a limited number of other institutional "accredited investors," as defined in Rule 501(a) (1), (2), (3) or (7) under the Act, that make certain representations and agreements to the Company as set forth as Annex A to the Offering Circular (each, an "Accredited Institution") and (iii) persons permitted to ---- purchase outside the Series A Debentures United States in offshore transactions in reliance upon on Regulation S under the Act (eachAct, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i), (ii) and (iiiii) above being referred to herein as as, the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers Purchaser will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.17598.5% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), ) to be dated the Closing DateDate (as defined below), in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 11% Series B Senior Discount Debentures Secured Notes due 2009 2010 (the "SERIES Series B DEBENTURESNotes"), ) to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- Notes and (ii) under certain circumstances a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes, and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures The Notes and the Registration Rights Agreement are hereinafter sometimes referred to Subsidiary Guarantees will be senior secured obligations and the Company and the Guarantors will enter into the collateral documents listed on Schedule B attached hereto (collectively as the "OPERATIVE DOCUMENTS." -------------------Collateral

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), ) and (ii) persons permitted to institutional "accredited investors," as ---- purchase the Series A Debentures defined in offshore transactions in reliance upon Regulation S Rule 501(a) (1), (2), (3) or (7) under the Act Act, that make certain representations and agreements to the Company (each, a an "REGULATION S PURCHASERACCREDITED ---------- INSTITUTION") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures ------------------- Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Securities will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially ------------------------------ the form of Exhibit A hereto, for so long as such Series A Debentures Securities constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights ------------------------------- Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSION") ---------- under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to ---------------------- the resale by ----------------------- certain holders of the Series A Debentures Securities and to use its reasonable best efforts to cause such Registration Statements Statement to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange OfferAgreement. This Agreement, the Indenture, the Debentures Notes, and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers and sales (the "EXEMPT RESALESExempt Re sales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers Purchaser will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") ), under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 9 3/4% Series B Senior Discount Debentures Notes due 2009 2006 (the "SERIES Series B DEBENTURESNotes"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to herein as the "EXCHANGE OFFERExchange Offer") -------------- and the Subsidiary Guarantees thereof, and/or (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its their best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, the Subsidiary Guarantees and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), ) and (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175103/8% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the Subsidiary Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8103/8% Series B Senior Discount Debentures due Subordinated Notes Due 2009 (the "SERIES B DEBENTURESNOTES"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and the Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, the Guarantees and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Senior Preferred Stock purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) to persons permitted to ---- purchase the Series A Debentures Senior Preferred Stock in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers Purchaser will offer the Series A Debentures Senior Preferred Stock to ---------- Eligible Purchasers initially at a the offering price equal to 52.175% of set forth in the principal amount thereofOffering Memorandum. Such price may be changed at any time without notice. Holders (including subsequent transferees) transferees of the Series A Debentures Senior Preferred Stock) will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined described in the ------------------------------ Registration Rights Agreement)Offering Memorandum and containing other customary and reasonable provisions. Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") ), under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's Series A 14 3/4% Senior Discount Debentures due 2009 Redeemable Exchangeable Cumulative Preferred Stock, par value $0.01 per share, with a liquidation preference of $25 per share (the "SERIES B DEBENTURESExchange Senior Preferred Stock"), to be offered in exchange for the Series A ------------------- Debentures Senior Preferred Stock (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and and/or (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Senior Preferred Stock and to use its reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the IndentureCertificate of Designations, the Debentures Senior Preferred Stock, the Exchange Indenture and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------Registration

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers and sales (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Senior Subordinated Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), (ii) not more than five (5) institutional "accredited investors," as defined in Rule 501(a) (1), (2), (3) or (7) under the Act, that make certain representations and agreements to the Company (each, an "Accredited Institution"), and (iiiii) to persons permitted to ---- purchase the Series A Debentures Senior Subordinated Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i), (ii) and (iiiii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers Purchaser will offer the Series A Debentures Senior Subordinated Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Senior Subordinated Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Senior Subordinated Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 8-3/4% Senior Discount Debentures Subordinated Notes due 2009 2008 (the "SERIES B DEBENTURESExchange Notes"), to be offered in exchange for the Series A ------------------- Debentures Senior Subordinated Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and the Subsidiary Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Senior Subordinated Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Senior Credit Agreement, the Indenture, the Debentures Notes, the Subsidiary Guarantees and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------Substantially all of the net proceeds of the Offering will be used to finance a portion of the cash consideration for the Company's acquisition (the "Acquisition") of McNeilus Companies, Inc., a Minnesota corporation ("McNeilus"). The Acquisition will be made pursuant to that certain Stock Purchase Agreement between the Company, McNeilus, and the shareholders of McNeilus named therein dated as of December 8, 1997 (the "Acquisition Agreement"). Immediately upon consummation of the Acquisition, McNeilus shall, and shall cause each of its domestic subsidiaries, other than MFSI, Oshkosh/McNeilus Financial Services, Inc. and Nations Casualty Insurance, Inc., (collectively, the "McNeilus Subsidiary Guarantors") to, execute and deliver a counterpart of this Agreement, the Registration Rights Agreement, the Indenture and its respective Subsidiary Guarantee.

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) to a limited number of other institutional "accredited investors," as defined in Rule 501(a) (1), (2), (3) or (7) under the Act, that make certain representations and agreements to the Company (each, an "ACCREDITED INSTITUTION"), and (iii) to persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i), (ii) and (iiiii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 7-3/4% Series B Senior Discount Debentures Subordinated Notes due 2009 2008 (the "SERIES B DEBENTURESNOTES"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) to persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers Purchaser will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be executed on and dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' Company's new series of 13 3/810 1/2% Senior Discount Debentures Notes due 2009 2008 (the "SERIES Series B DEBENTURESNotes"), identical in all material respects to the Series A Notes (except that the Series B Notes shall have been registered pursuant to such Exchange Offer Registration Statement), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes, and to use its their reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Series A Notes and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the Company ----------------- Issuers that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALESExempt Resales") of the Senior -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to not more than ten other ---- purchase the Series A Debentures institutional "accredited investors," as defined in offshore transactions in reliance upon Regulation S Rule 501(a)(1), (2), (3) or (7) under the Act Act, that make certain representations and agreements to the Company (each, a an "REGULATION S PURCHASERAccredited Institution") (such persons ---------------------- specified in clauses ---------------------- (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers ------------------- Purchaser will offer the Series A Debentures Senior Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Senior Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in substantially ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Senior Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 11 1/4% Senior Discount Debentures due 2009 Notes (the "SERIES B DEBENTURESExchange Notes"), to be offered in -------------- exchange for the Series A ------------------- Debentures Senior Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") and the Subsidiary Guarantees thereof and, in certain -------------- and circumstances, (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange ---------------------------- Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the ----------------------- resale by ----------------------- certain holders of the Series A Debentures Senior Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, the Consent and Amendment No. 4 to Credit Agreement, to be dated as of July 31, 1997, among the Company, the Guarantors and the lenders signatory thereto, the Subsidiary Guarantees and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Units purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), ) and (ii) persons permitted to ---- purchase the Series A Debentures Units in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Units to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof$507.39 per Unit. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Units will have the registration rights set forth in the registration rights agreement (the "NOTES REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, and the registration rights agreement (the "WARRANT REGISTRATION RIGHTS AGREEMENT") to be dated as of the Closing Date, substantially in the form of Exhibit B hereto, for so long as such Series A Debentures Initial Notes, Warrants or Warrant Shares constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Notes Registration Rights Agreement and the Warrant Registration Rights Agreement, as applicable). Pursuant to the Notes Registration Rights Agreement and the Warrant Registration Rights Agreement, (i) the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (ix) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 14% Senior Discount Debentures Notes due 2009 2010 (the "SERIES B DEBENTURESEXCHANGE NOTES"), to be offered in exchange for the Series A ------------------- Debentures Initial Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and the Guarantees thereof and (iiy) a shelf registration statement pursuant to Rule 415 under the Act (the "NOTES SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "NOTES REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Initial Notes and to use its their respective best efforts to cause such Notes Registration Statements to be declared and remain effective and usable for the periods specified in the Notes Registration Rights Agreement and to consummate the Exchange OfferOffer and (ii) the Company will agree to file with the Commission under the circumstances set forth therein a registration statement pursuant to Rule 415 under the Act (the "WARRANT SHELF REGISTRATION STATEMENT") relating to the resale of the Warrants, the issuance of shares of Common Stock upon exercise of the Warrants and the resale of the Warrant Shares and to use its best efforts to cause such Warrant Shelf Registration Statement to be declared and remain effective and usable for the periods specified in the Warrant Registration Rights Agreement. This Agreement, the Indenture, the Debentures Notes, the Guarantees, the Warrants, the Warrant Agreement, the Notes Registration Rights Agreement and the Warrant Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSDocuments." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be (a) "qualified institutional buyers," as defined in Rule 144A under the Act ("QIBS"), and or (iib) persons permitted to ---- purchase the Series A Debentures institutional "accredited investors," as defined in offshore transactions in reliance upon Rule 501(a)(1), (2), (3) or (7) of Regulation S D under the Act Act, that make certain representations and warranties to the Issuers (each"ACCREDITED INVESTORS" and, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the together with QIBs, "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer Holders of the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the Guarantors will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION") ), under the circumstances set forth therein, (ia) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/811.653% Senior Discount Debentures Secured Notes due 2009 2007, Series B, of the Issuers (the "SERIES B DEBENTURESNOTES"), identical in all material respects to the Series A Notes, including with respect to the Guarantees thereof (except that the Series B Notes shall have been registered pursuant to such registration statement), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "REGISTERED EXCHANGE OFFER") -------------- ), and (iib) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes. On the Closing Date, the Grantors will enter into certain security and pledge agreements, mortgages and certain other documents, that will provide for the grant of the Security Interests in the Collateral to use its best efforts the Trustee, as secured party (in such capacity, the "SECURED PARTY"), or will prohibit transfer or mortgage of certain leasehold interests, in each case, for the benefit of the holders of the Notes (such documents, collectively (including the Agreement Regarding Ground Lease (as defined below)), the "SECURITY DOCUMENTS"). The Security Interests will secure the payment and performance when due of all of the obligations of the Majestic Entities under the Indenture, the Notes and the Security Documents. Also on the Closing Date, the Company, Parent, Majestic Star and Barden Development, Inc., an Indiana corporation, will enter into the Xxxxxx Agreement (as defined in the Indenture). In addition, on the Closing Date, the Issuers expect to cause such Registration Statements enter into a new senior secured credit facility (the "NEW CREDIT FACILITY"). In connection with entering into the New Credit Facility, the Trustee and the lender under the New Credit Facility shall enter into an Intercreditor Agreement, to be declared dated as of the Closing Date, in a form reasonably satisfactory to the Initial Purchaser, which form shall be attached as an exhibit to the Indenture (the "INTERCREDITOR AGREEMENT"). The Series A Notes are being sold in connection with a financing related to the acquisition by the Company and remain effective the Subsidiaries (as defined below) of substantially all of the assets of Fitzgeralds Las Vegas, Inc. ("FLV"), 101 Main Street Limited Liability Company ("FBH") and usable for Fitzgeralds Missxxxxxxx, Xxx. ("FM" and, collectively with FLV and FBH, the periods specified in "FITZGERALDS COMPANIES"; such assets, collectively, the Registration Rights Agreement "FITZGERALDS PROPERTIES"; and such acquisition, the "FITZGERALDS ACQUISITION"), pursuant to consummate a Purchase and Sale Agreement, dated as of November 22, 2000, as amended as of December 4, 2000, and as further amended November 1, 2001 (the Exchange Offer"PURCHASE AND SALE AGREEMENT"), by and among the Company (as assignee of Majestic Investor, LLC (the "PARENT")), the Fitzgeralds Companies and Fitzgeralds Gaming Corporation. This Agreement, the Indenture, the Debentures and Member Agreement, the Registration Rights Agreement Agreement, the Notes, the Guarantees and the Security Documents collectively are hereinafter sometimes referred to collectively herein as the "OPERATIVE DOCUMENTS." -------------------The Purchase and Sale Agreement, together with the Operative Documents, and all other documents or instruments executed by either of the Issuers or any of the Subsidiaries in connection with the transactions contemplated thereby collectively are referred to herein as the "TRANSACTION DOCUMENTS." The New Credit Facility and the Intercreditor Agreement, together with all other documents or instruments executed by the Majestic Entities in connection with the transactions contemplated thereby, collectively are referred to herein as the "BANK DOCUMENTS" and, together with the Transaction Documents, the "DOCUMENTS." The transactions contemplated by the Operative Documents, including, without limitation, the Offering and the application of the proceeds therefrom as described in the Offering Circular, the issuance and sale of the Notes in accordance with this Agreement and the creation, grant, recording and perfection of the Security Interests, collectively are referred to herein as the "OPERATIVE TRANSACTIONS" and, collectively with the transactions contemplated by the other Documents, including without limitation the Fitzgeralds Acquisition and the borrowing (if any) under the New Credit Facility, the "TRANSACTIONS." Each reference in this Agreement (including, without limitation, in any representation or warranty) to the "COMPANY," to "CAPITAL," to the "ISSUERS," to "SUBSIDIARIES" of the Company, Capital or the Issuers, to "SUBSIDIARIES," to "Guarantors," to "GRANTORS" or to "MAJESTIC ENTITIES," or to the businesses, properties or assets of any of the foregoing, whether in the singular or plural, shall be deemed to be a reference to such entity or entities both before and immediately after giving effect to the Fitzgeralds Acquisition.

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company, and the Company understands, that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES") some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely Circular to persons (ithe "SUBSEQUENT Purchasers") persons whom the Initial Purchasers Purchaser reasonably believe believes to be (a) "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and as such Rule may be amended from time to time, (iib) a limited number of institutional "accredited investors" as defined in Rule 501(a)(1), (2), (3) or (7) under the Act ("ACCREDITED INVESTORS"), as such Rules may be amended from time to time, that make certain representations or warranties to the Initial Purchaser as set forth in the Accredited Investor Letter (the "ACCREDITED INVESTOR LETTER") attached as Annex A to the Offering Circular or (c) non-U.S. persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION REG S PURCHASERPERSON" and, together with QIBs and Accredited Investors, "ELIGIBLE PURCHASERS"). Pursuant to the Indenture, Perkins & Marie Callender's Holding Xxx. (the "XXXXXX XXXXXX") and all Domestic Restricted Subsidiaries of the Company shall fully and unconditionally guarantee, to the extent provided in the Indenture, on a senior secured basis, to each holder of the Notes and the Trustee, the full performance of the Company's obligations under the Indenture and the Notes (the Direct Parent and each such persons ---------------------- specified in clauses (i) and (ii) Domestic Restricted Subsidiary being referred to herein as the a "ELIGIBLE -------- PURCHASERSGUARANTOR" and each such guarantee being referred to herein as a "GUARANTEE"). The Initial Purchasers will offer In connection with entering into the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of Credit Agreement, the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of Company, the Series A Debentures will have Guarantors, the registration rights set forth in Trustee and the registration rights agreement (lender under the "REGISTRATION RIGHTS AGREEMENT")Credit Agreement shall enter into an Intercreditor Agreement, to be dated as of the Closing Date, in ----------------------------- substantially a form reasonably satisfactory to the Initial Purchaser, which form of Exhibit A hereto, for so long shall be attached as such Series A Debentures constitute an exhibit to the Indenture (the "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights AgreementINTERCREDITOR AGREEMENT"). Pursuant to On the Registration Rights Closing Date, the Company and the Guarantors will enter into certain collateral agreements (together with the Intercreditor Agreement, the Issuers "COLLATERAL AGREEMENTS"), which will agree provide for the grant of second priority security interests (subject to file with a prior ranking lien by the Securities lender under the Credit Agreement and Exchange Commission certain other Permitted Liens (as defined, and provided for, in the Indenture)) (the "COMMISSIONSECURITY INTERESTS") under in substantially all of the circumstances set forth thereinassets of the Company (other than Excluded Assets). On or before the Closing Date, the Company's indirect parent, P&MC's Holding Corp. (i"PARENT") will deliver a registration ---------- statement under the Act promissory note (the "EXCHANGE OFFER REGISTRATION STATEMENTPARENT LOAN") relating ------------------------------------- to Jefferies High Yield Trading LLC and/or one or more of its designees reasonably acceptable to Parent, which will provide for a senior secured loan to Parent in the Issuers' new series amount of 13 3/8% Senior Discount Debentures due 2009 $8.947 million and guaranteed (the "SERIES B DEBENTURESPARENT LOAN GUARANTEE") by Castle Harlan Partners IV, L.P. (thx "XXXXXX XXXN GUARANTOR"). On or before the Closing Date, Parent will make an indirect equity contribution to the Company of $8.5 million, all of which will be offered in exchange for funded with the Series A ------------------- Debentures (such offer to exchange being referred to as proceeds from the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act Parent Loan (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the EQUITY CONTRIBUTION"REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer). This Agreement, the Indenture, the Debentures Collateral Agreements, the Notes, the Credit Agreement and the Registration Rights Agreement Guarantees are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE TRANSACTION DOCUMENTS." -------------------The Offering, the Credit Agreement, the Equity Contribution and application of the net proceeds therefrom are collectively referred to herein as the "TRANSACTIONS."

Terms of Offering. The Initial Purchasers have advised advised, and represent ----------------- and warrant to, the ----------------- Issuers Company that the Initial Purchasers will make offers and sales (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Restricted Notes purchased hereunder on the -------------- terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) to persons permitted to ---- purchase the Series A Debentures ---- Restricted Notes in offshore transactions in reliance upon Regulation S under the Act (each, each a "REGULATION Regulation S PURCHASERPurchaser") (such persons QIB's and Regulation S Purchasers ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers ------------------- will offer the Series A Debentures Restricted Notes to ---------- Eligible Purchasers initially at a price equal to 52.175% the percentage of the principal amount thereof. Such price may be changed at any time without noticethereof set forth on the cover page of the Offering Memorandum. Holders (including subsequent transferees) of the Series A Debentures Restricted Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Restricted Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the Registration ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, therein (i) a ---------- registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration --------------------------- Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 11 1/2% Senior Discount Debentures Notes due 2009 2005 (the "SERIES B DEBENTURESExchange Notes"), to be offered in exchange for the Series A ------------------- Debentures Restricted Notes (such --------------- offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") and the Guarantees -------------- and thereof and/or (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange ---------------------------- Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the ----------------------- resale by ----------------------- certain holders of the Series A Debentures Restricted Notes and to use its reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, the Guarantees and the Registration Rights Agreement are hereinafter sometimes herein referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering MemorandumMemoran dum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and ) or (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing DateDate (as defined below), in ----------------------------- substantially the form of Exhibit A B hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSION") ), under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 83/8 % Series B Senior Discount Debentures Subordinated Notes due 2009 2008 (the "SERIES B DEBENTURESNOTES"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Issuer that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES") some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchasers hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons Persons (as defined below) whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) persons permitted to ---- purchase the Series A Debentures a limited number of institutional "accredited investors," as defined in offshore transactions in reliance upon Regulation S Rule 501(a)(1), (2), (3) or (7) under the Act (each"ACCREDITED INVESTORS" and, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the together with QIBs, "ELIGIBLE -------- INITIAL PURCHASERS"). The Initial Purchasers will offer "PERSON" means any individual, corporation, partnership, joint venture, association, joint stock company, unincorporated organization, government or any agency or political subdivision thereof, or any other entity. Holders of the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" Date (as defined in the ------------------------------ Registration Rights Agreementbelow). Pursuant to the Registration Rights Agreement, the Issuers Issuer and the Guarantors will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to to, among other things, the Issuers' new series 11?% Senior Secured Notes due 2006, Series B, of 13 3/8% Senior Discount Debentures due 2009 the Issuer (the "SERIES B DEBENTURESNOTES" and, together with the Series A Notes, each with the Guaranty endorsed thereon, the "NOTES"), identical in all material respects to the Series A Notes (except that the Series B Notes shall have been registered pursuant to such registration statement) to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "REGISTERED EXCHANGE OFFER") -------------- and and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes. On the Closing Date, the Grantors will enter into certain security and to use its best efforts to cause such Registration Statements to be declared pledge agreements, mortgages and remain effective certain other documents, including (without limitation) a cash collateral and usable disbursement agreement (collectively, the "SECURITY DOCUMENTS"), that will provide for the periods specified grant of the Security Interests in the Registration Rights Agreement Collateral to the Trustee, as collateral agent (in such capacity, the "COLLATERAL AGENT"), for the benefit of the holders of the Notes. The Security Interests will secure the payment and to consummate performance when due of all of the Exchange Offer. This Agreementobligations of the Issuer, the Guarantors and the Grantors under the Indenture, the Debentures Notes, and the Registration Rights Agreement are hereinafter sometimes referred to collectively as Security Documents. In connection with the offering of the Series A Notes contemplated hereby, the Issuer is amending and restating (the "OPERATIVE DOCUMENTSAMENDMENT") the Third Amended and Restated Loan Agreement, dated as of February 1, 1999, among the Issuer, The Spectrum Club Company, Inc., Pontxxx Xxxlty, Inc., Sports Club, Inc. of California, Irvine Sports Club, Inc., The SportsMed Company, Inc., L.A./Irvine Sports Clubs, Ltd., Talla New York, Inc., SCC Sports Club, Inc., Spectrum Club/Anaheim Hills, Inc., Green Valley Spectrum Club, Inc. and Comerica Bank-California (the "LOAN AGREEMENT")." -------------------

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Senior Discount Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) to persons permitted to ---- purchase the Series A Debentures Senior Discount Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers Purchaser will offer the Series A Debentures Senior Discount Notes to ---------- Eligible Purchasers initially at a price equal to 52.17551.944% of the principal amount at maturity thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Senior Discount Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Senior Discount Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of Company's 13 3/81/2% Senior Discount Debentures due 2009 Notes Due 2008 (the tHE "SERIES B DEBENTURESNEW SENIOR DISCOUNT NOTES"), to be offered in exchange for the Series A ------------------- Debentures Senior Discount 5 Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Senior Discount Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Each Initial Purchasers have Purchaser has advised the ----------------- Issuers Company, and the Company understands, that the such Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Notes purchased by such Initial Purchaser hereunder on the terms that will be set forth in the Final Offering MemorandumCircular, as amended or supplemented, solely to persons (the “Subsequent Purchasers”) whom such Initial Purchaser (i) persons whom the Initial Purchasers reasonably believe believes to be "“qualified institutional buyers" ” as defined in Rule 144A under the Act Securities Act, as such may be amended from time to time ("QIBS"“QIBs”), and (ii) reasonably believes (based upon written representations made by such persons permitted to ---- purchase such Initial Purchaser) to be institutional “accredited investors” as defined in Rule 501(a)(1), (2), (3) or (7) under the Series A Debentures in offshore transactions Securities Act (“Accredited Investors”) or (iii) reasonably believes to be non-U.S. persons in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS")Securities Act. The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% Holders of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transfereesSubsequent Purchasers) of the Series A Debentures will have the registration rights set forth in the registration rights agreement applicable to the Notes (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION"“SEC”) under the circumstances set forth therein, (ia) a registration ---------- statement under the Securities Act relating to the Notes (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- “Exchange Notes”), which shall be identical in all material respects to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 Notes (except that the "SERIES B DEBENTURES"), Exchange Notes shall have been registered pursuant to such registration statement and will not be subject to restrictions on transfer or contain additional interest provisions) to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER"“Exchange Offer”), and/or (b) -------------- and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in Notes. If required under the Registration Rights Agreement and Agreement, the Company will issue Exchange Notes to consummate the Initial Purchasers (the “Private Exchange OfferNotes”). If the Company fails to satisfy its obligations under the Registration Rights Agreement, it will be required to pay additional interest to the holders of the Notes under certain circumstances. This Agreement, the Indenture, the Debentures Registration Rights Agreement, the Notes, the Exchange Notes and the Registration Rights Agreement Private Exchange Notes are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTS“Documents." -------------------”

Terms of Offering. The Initial Purchasers have advised Purchaser has advised, and represents and warrants to, the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers and sales (the "EXEMPT RESALES") of -------------- the Series A Debentures Securities purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" (as defined in Rule 144A promulgated under the Act Act) ("QIBS"), and (ii) persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASERQIBs") (such persons ---------------------- specified in clauses (i) and (ii) QIBs being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers Purchaser will offer the Series A Debentures Securities to ---------- Eligible Purchasers initially at a price equal to 52.175% set forth on the cover page of the principal amount thereof. Such price may be changed at any time without noticeOffering Memorandum. Holders (including subsequent transferees) of the Series A Debentures Restricted Preferred Stock and Warrants will have the registration rights set forth in either the Preferred Stock registration rights agreement (the "PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT") or the Warrant registration rights agreement (the "WARRANT REGISTRATION RIGHTS AGREEMENT"), each to be dated the Closing Date, in ----------------------------- substantially the form forms of Exhibit A and Exhibit B hereto, for so long as such Series A Restricted Preferred Stock, Exchange Debentures and/or Warrants constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Preferred Stock Registration Rights Agreement or the Warrant Registration Rights Agreement, as applicable). Pursuant to the Preferred Stock Registration Rights Agreement, the Issuers Company will agree to file (i) with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, therein (iA) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' a new series of 13 3/8% Senior Discount Debentures due 2009 the Company's Preferred Stock of like amounts having identical terms (the "SERIES B DEBENTURESNEW PREFERRED STOCK"), ) to be offered in exchange for the Series A ------------------- Debentures Restricted Preferred Stock, or if the Preferred Stock has been exchanged for Exchange Debentures, subordinated debentures having identical terms (the "NEW EXCHANGE DEBENTURES") (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and and/or (iiB) a shelf registration statement pursuant to Rule 415 under the Act (the "PREFERRED STOCK SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Restricted Preferred Stock or Exchange Debentures, as applicable, and (ii) to use its reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Preferred Stock Registration Rights Agreement and to consummate the Exchange Offer. Pursuant to the Warrant Registration Rights Agreement, the Company will agree to file (i) with the Commission under the circumstances set forth therein a shelf registration statement pursuant to Rule 415 under the Act (the "WARRANT SHELF REGISTRATION STATEMENT") relating to the resale by certain holders of the Warrants or the Warrant Shares and (ii) to use its reasonable best efforts to cause such Warrant Shelf Registration Statement to be declared and remain effective and usable for the periods specified in the Warrant Registration Rights Agreement. This Agreement, the IndentureCertificate of Designation forming part of the Company's Certificate of Incorporation, the Debentures Indenture relating to the Exchange Debentures, the Warrant Agreement, the Units, the Unit Agreement, the Restricted Preferred Stock, Exchange Debentures, the Warrants, the Preferred Stock Registration Rights Agreement and the Warrant Registration Rights Agreement are hereinafter sometimes referred to collectively herein as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Issuer that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES") some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchasers hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) persons permitted to ---- purchase the Series A Debentures a limited number of institutional "accredited investors," as defined in offshore transactions in reliance upon Regulation S Rule 501(a)(1), (2), (3) or (7) under the Act (each"ACCREDITED INVESTORS"), a and (iii) certain persons outside the United States in reliance on Regulation S ("REGULATION S PURCHASERS") under the Act (such persons ---------------------- specified in clauses (i) "REG S INVESTORS," and, together with QIBs and (ii) being referred to herein as the Accredited Investors, "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer Holders of the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" Date (as defined in the ------------------------------ Registration Rights Agreementbelow). Pursuant to the Registration Rights Agreement, the Issuers Issuer and the Guarantors will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to to, among other things, the Issuers' new series of 13 3/812 1/4% Senior Discount Debentures Secured Notes due 2009 2004, Series B, of the Issuer (the "SERIES B DEBENTURESNOTES" and, together with the Series A Notes, each with the Guaranty endorsed thereon, the "NOTES"), identical in all material respects to the Series A Notes (except that the Series B Notes shall have been registered pursuant to such registration statement) to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "REGISTERED EXCHANGE OFFER") -------------- and and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes. On the Closing Date, the Grantors will enter into certain security and to use its best efforts to cause such Registration Statements to be declared pledge agreements, mortgages and remain effective and usable certain other documents (collectively, the "SECURITY DOCUMENTS") that will provide for the periods specified grant of the Security Interests in the Registration Rights Agreement Collateral to the Trustee, as collateral agent (in such capacity, the "COLLATERAL AGENT"), for the benefit of the holders of the Notes. The Security Interests will secure the payment and performance when due of all of the obligations of the Issuer, the Guarantors and the Grantors under the Indenture, the Notes, and the Security Documents. In connection with the offering of the Series A Notes contemplated hereby, the Issuer is seeking the consent (the "CONSENT SOLICITATION") to consummate certain amendments to and/or waivers under (the Exchange Offer"AMENDMENTS") the (i) Note Purchase Agreement, dated as of December 30, 1996, among the Issuer, as issuer, Fitzgeralds South, Inc. ("FSI"), Fitzgeralds Reno, Inc. ("FRI"), Fitzgeralds Incorporated ("FI"), Fitzgeralds Las Vegas, Inc. ("FLVI"), Fitzgeralds Fremont Experience Corporation ("FFEC"), Fitzgeralds Mississippi, Inc. ("FMI"), and Fitzgeralds Black Hawk, Inc. ("FBHI"), as subsidiary guarantors, and the purchasers listed on the signature pages thereto (the "NOTE PURCHASE AGREEMENT"); (ii) Indenture, dated as of December 19, 1995, among the Issuer, as issuer, FSI, FRI, FI, FLVI, FFEC, FMI, and FBHI, as subsidiary guarantors, and The Bank of New York (as successor to Wellx Xxxgo Bank, N.A.), as trustee (the "1995 INDENTURE"); (iii) Indenture, dated as of August 13, 1997, among 101 Xxxx Xxxxxx Xxxited Liability Company ("101 MAIN"), as issuer, Fitzgeralds Black Hawk II, Inc. ("FBH-II"), as guarantor, and The Bank of New York, as trustee (the "1997 INDENTURE," and, together with the 1995 Indenture, the "OLD INDENTURES"); and (iv) Warrant Agreement, dated as of December 19, 1995, between the Issuer and The Bank of New York, as warrant agent (the "WARRANT AGREEMENT"); each, as more fully described in the documents and instruments related thereto (the "CONSENT SOLICITATION DOCUMENTS"). This Agreement, the Indenture, the Debentures and Guaranty, the Registration Rights Agreement Agreement, the Security Documents, the Notes, the Consent Solicitation Documents and all other documents or instruments executed by the Issuer or any of the Subsidiaries (as defined below) in connection with the transactions contemplated hereby and thereby are hereinafter sometimes referred to collectively herein as the "OPERATIVE DOCUMENTS." -------------------The Issuer, the Guarantors and the Grantors are collectively referred to herein as the "FITZGERALDS ENTITIES." The transactions contemplated by the Documents, including without limitation, the Consent Solicitation, the Amendments, the Offering and the use of the proceeds therefrom as described in the Offering Circular, are collectively referred to herein as the "TRANSACTIONS."

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers offer and sell (the "EXEMPT RESALES"“Exempt Resales”) of -------------- the Series A Debentures Securities purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "“qualified institutional buyers" ” as defined in Rule 144A under of the Act ("QIBS"), and (ii“QIBs”) or to persons permitted to ---- purchase outside the Series A Debentures in offshore transactions in reliance upon United States under Regulation S under of the Act (eachsuch persons, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"together with QIBs, “Eligible Purchasers”). The Initial Purchasers will offer the Series A Debentures Securities to ---------- Eligible Purchasers initially at a price equal to 52.175100.000% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Securities will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A Schedule D hereto, for so long as such Series A Debentures Securities constitute "TRANSFER RESTRICTED SECURITIES" “Transfer Restricted Securities” (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION"“Commission”) under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to the Issuers' a new series of 13 3/8the Company’s 7 1/8% Senior Discount Debentures Notes due 2009 2013 guaranteed by the Guarantors (the "SERIES B DEBENTURES"“Series K Notes” and, together with the Securities, the “Notes”), to be offered in exchange for the Series A ------------------- Debentures Securities (such offer to exchange being referred to as the "EXCHANGE OFFER"“Exchange Offer”) -------------- and the Guarantees by the Guarantors thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" “Shelf Registration Statement” and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS"“Registration Statements”) relating to the resale by ----------------------- certain holders of the Series A Debentures Securities and to use its their best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.17598.277% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 12% Series B Senior Discount Debentures due 2009 Subordinated Notes (the "SERIES Series B DEBENTURESNotes"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers, and the Issuers understand, that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Stage I Notes purchased by the Initial Purchasers hereunder on the terms set forth in the Final Offering Memorandum, as amended or supplemented, solely Memorandum to persons (ithe “Subsequent Purchasers”) persons whom the Initial Purchasers reasonably believe to be "(i) are “qualified institutional buyers" ” (“QIBs”) (as defined in Rule 144A under the Act ("QIBS"Securities Act), and or (ii) persons permitted to ---- purchase the Series A Debentures are not “U.S. persons” (as defined in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER"Securities Act) (and in compliance with the laws applicable to such persons ---------------------- specified in clauses jurisdictions outside of the United States. Pursuant to the terms of the Stage I Collateral Agreements as defined under the caption “Description of the Stage I Notes” in the Final Offering Memorandum (i) the “Stage I Collateral Agreements”), until the consummation of the Acquisition and until Xxxxxx is required by the Stage I Indenture to pledge its assets (ii) being referred as described in the “Description of the Stage I Notes” section of the Final Offering Memorandum), all of the obligations under the Stage I Securities and the Stage I Indenture will be secured by a pledge of the shares of Acquisition Co., the remaining cash proceeds deposited in the Escrow Account, if any, received in the Offering and Acquisition Co.’s rights under the Merger Agreement. Upon consummation of the Stage II Notes Exchange Redemption, all of the obligations under the Stage II Securities and the Existing Kratos Indenture will be secured by a lien and security interest in substantially all of the assets of Kratos and the Stage II Guarantors pursuant to herein the terms of the Stage II Collateral Agreements as defined under the "ELIGIBLE -------- PURCHASERS"caption “Description of the Stage II Notes” in the Final Offering Memorandum (the “Stage II Collateral Agreements” and, together with the Stage I Collateral Agreements, the “Collateral Agreements”). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% Holders of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transfereesSubsequent Purchasers) of the Series A Debentures will have the registration rights set forth in the registration rights agreement applicable to the Stage I Notes and, if the Stage II Notes Exchange Redemption has been consummated, the Stage II Notes (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), which will be in a form to be agreed upon but to be substantially consistent with the registration rights agreement entered into in connection with the issuance of the Existing Kratos Notes with such conforming changes as are necessary to reflect the Registration Rights Agreement’s applicability to the Stage I Notes and the Stage II Notes, to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" Date (as defined in the ------------------------------ Registration Rights Agreementhereinafter defined). Pursuant to the Registration Rights Agreement, the Issuers Issuers, Acquisition Co., the Stage II Guarantors (and following the execution and delivery of the joinder agreement thereto, Xxxxxx), will agree agree, among other things, to file with the Securities and Exchange Commission SEC (the "COMMISSION") under the circumstances set forth therein, (ia) a registration ---------- statement under the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), notes to be offered in exchange for the Series A ------------------- Debentures Stage I Notes or, if the Stage II Notes Exchange Redemption has been consummated, the Stage II Notes, as applicable (the “Exchange Notes”), and guarantees to be offered in exchange for the Stage I Guarantees or, if the Stage II Notes Exchange Redemption has been consummated, the Stage II Guarantees, as applicable (the “Exchange Guarantees”), which shall be identical to the Stage I Securities or the Stage II Securities, as the case may be, except that the Exchange Notes and Exchange Guarantees shall have been registered pursuant to the Exchange Offer Registration Statement and will not be subject to restrictions on transfer or contain additional interest provisions, (such offer to exchange being referred to as the "EXCHANGE OFFER"“Exchange Offer”), and/or (b) -------------- and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures and Stage I Notes or, if the Stage II Notes Exchange Redemption has been consummated, the Stage II Notes, as applicable. If required under the Registration Rights Agreement, the Stage I Issuer or, if the Stage II Notes Exchange Redemption has been consummated, the Stage II Issuer, will issue Exchange Notes to use the Initial Purchasers (the “Private Exchange Notes”). If the Stage I Issuer or the Stage II Issuer, as applicable, fails to satisfy its best efforts obligations under the Registration Rights Agreement, the Stage I Issuer or the Stage II Issuer, as applicable, will be required to cause such Registration Statements pay additional interest to the holders of the Stage I Notes or, if the Stage II Notes Exchange Redemption has been consummated, the Stage II Notes, under certain circumstances to be declared and remain effective and usable for the periods specified set forth in the Registration Rights Agreement and to consummate the Exchange OfferAgreement. This Agreement, the IndentureIndentures, the Debentures and Collateral Agreements, the Registration Rights Agreement Agreement, the Notes, the Guarantees, the Escrow Agreement, the Engagement Letter dated February 7, 2011 (the “Engagement Letter”) between Xxxxxx, Jefferies, Key and Xxxxxxxxxxx, the Exchange Notes, the Exchange Guarantees and the Private Exchange Notes are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTS“Documents”, and the transactions contemplated hereby and thereby are collectively referred to herein as the “Transactions." -------------------” Nothing in this Agreement should be read to limit or otherwise modify the terms and provisions of the Engagement Letter, provided that, in the event any terms of the Engagement Letter are inconsistent with or contradict any terms of this Agreement, this Agreement shall govern.

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Holdings that the Initial Purchasers will may make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Securities purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplementedhereunder, solely to (i) to persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) to persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") and (iii) to a limited number of institutional "accredited investors" as defined in Rule 501(a)(1), (2), (3) or (7) ("Accredited Investors") (such persons ---------------------- specified in clauses (i), (ii) and (iiiii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A D hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Holdings will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the IssuersHoldings' new series of 13 3/815% Series B Senior Discount Debentures due 2009 Notes Due 2007 (the "SERIES Series B DEBENTURESNotes"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its commercially reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. The Securities are being offered and sold by Holdings in part to finance the transactions contemplated by that certain Asset Purchase Agreement, dated as of March 24, 1999 (the "Asset Purchase Agreement"), by and among Crown Paper Co., Crown Vantage New Hampshire Electric, Inc. and Berlin Xxxxx Railway, Inc., as sellers (collectively, "Crown"), Pulp & Paper of America LLC ("PPA") and the Company, pursuant to which PPA and/or its designees will, upon the terms and subject to the conditions set forth therein, acquire certain assets of Crown, including, without limitation, the Xxxxxxx Pulp Mill in Berlin, New Hampshire and the Cascade Paper Mill in Gorham, New Hampshire (together, the "Xxxxxx-Xxxxxx Xxxxx"). In connection with these transactions, the Company entered into a Purchase Agreement ("Company Notes Purchase Agreement") dated as of July 1, 1999 among the Company, the other Designated Subsidiaries and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation ("Company Notes Purchaser") and will enter into on the date hereof (a) an indenture (the "Company Notes Indenture") pursuant to which the Series A Company Notes will be issued, (b) a registration rights agreement (the "Company Notes Registration Rights Agreement") providing certain registration rights to the holders of Series A Company Notes, (c) the Collateral Documents (as defined in the Company Notes Indenture) pursuant to which the Company and the other Designated Subsidiaries have agreed, among other things, to grant (i) a first priority security interest in their respective property, plant and equipment as set forth in the Collateral Documents and (ii) a second priority security interest in their respective property, accounts receivable and inventory as set forth in the Collateral Documents, in the case of each of clauses (i) and (ii) subject to certain exceptions and otherwise in accordance with the terms of the Company Notes Indenture and the Collateral Documents, and (d) a Revolving Credit Facility (as defined in the Company Indenture). The Initial Purchasers and their direct and indirect transferees of the Securities will also be entitled to the benefits of the Securities Pledge Agreement dated as of the Closing Date made by Holdings in favor of the Initial Purchasers (the "Securities Pledge Agreement") pursuant to which Holdings has agreed to grant to the Trustee a first priority security interest in all the Company's capital stock to secure Holdings' obligations under the Indenture and certain obligations under the Stockholders Agreement. This Agreement, the Indenture, the Debentures and Notes, the Warrants, the Warrant Shares, the Warrant Agreement, the Registration Rights Agreement Agreement, the Securities Pledge Agreement, the Stockholders Agreement, the Company Notes Purchase Agreement, the Company Notes Indenture, the Company Notes, the Company Notes Registration Rights Agreement, the Subsidiary Guarantees (as defined in the Company Notes Purchase Agreement) and the Collateral Documents are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. (a) The Initial Purchasers have Purchaser has advised the ----------------- Issuers that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) of -------------- the Series A Debentures Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (ia) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "“qualified institutional buyers" ,” as defined in Rule 144A under the Act ("QIBS"“QIBs”), and (iib) non-U.S. persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon Regulation S under the Act (each“Regulation S Purchasers”), a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (iic) being referred a limited number of institutional “accredited investors,” as defined in Rule 501(a)(1), (2), (3) or (7) under the Act that make certain representations and warranties to herein the Initial Purchaser and the Issuers (“Accredited Investors” and, collectively with QIBs and Regulation S Purchasers, “Eligible Purchasers), which representations and warranties are set forth in the form of Accredited Investor Letter attached as Annex A to the "ELIGIBLE -------- PURCHASERS"Offering Circular (the “Accredited Investor Letter”). The Initial Purchasers will offer Holders of the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the Guarantors will agree agree, among other things, (a) to file with the Securities and Exchange Commission (the "COMMISSION"“Commission”) under the circumstances set forth therein, therein (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to, among other things, the 9.000% Senior Secured Notes due 2012, Series B, of the Issuers (the “Series B Senior Secured Notes” and, together with the Series A Senior Secured Note, the “Senior Secured Notes”) and the 12.750% Senior Subordinated Notes due 2013, Series B, of the Issuers (the “Series B Senior Subordinated Notes” and, together with the Series A Senior Subordinated Notes, the “Senior Subordinated Notes”; the Series B Senior Subordinated Notes, together with the Series B Senior Secured Notes, the “Series B Notes”), each identical in all material respects to the Issuers' new series of 13 3/8% Series A Senior Discount Debentures due 2009 Secured Notes and the Series A Senior Subordinated Notes, respectively, including with respect to the Guarantees thereof (except that the "SERIES Series B DEBENTURES"Notes shall have been registered pursuant to such registration statement), to be offered in exchange for the Series A ------------------- Debentures Senior Secured Notes and the Series A Senior Subordinated Notes, respectively (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- “Registered Exchange Offer”), and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" “Shelf Registration Statement” and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS"“Registration Statements”) relating to the resale by ----------------------- certain holders of the Series A Debentures Notes, and to use its best efforts (b) to cause such Registration Statements to be declared and remain effective and usable for the periods specified effective, as applicable, as provided in the Registration Rights Agreement and to consummate Agreement. On the Exchange Offer. This AgreementClosing Date, the Parent Pledgors (solely with respect to the Parent Pledges), the Issuers and the Guarantors shall enter into certain security and pledge agreements, deeds of trust and certain other collateral documents (collectively, the “Collateral Agreements” and, the pledge agreements governing the Parent Pledges, the “Parent Pledge Agreements”), that will provide for the grant of the Security Interests in the Collateral to the Trustee, as collateral agent for the Trustee and the holders of the Senior Secured Notes (in such capacity, the “Secured Party”). The Security Interests will secure the payment and performance when due of all of the respective obligations of the Issuers and the Guarantors under the Senior Secured Indenture, the Debentures Senior Secured Notes and the Registration Rights Agreement are hereinafter sometimes referred to collectively as Guarantees of the "OPERATIVE DOCUMENTSSenior Secured Notes." -------------------

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Units purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), ) and (ii) to persons permitted to ---- purchase the Series A Debentures Units in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures Units to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof$986.21 per Unit. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Senior Subordinated Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially form and substance reasonably satisfactory to the form of Exhibit A heretoInitial Purchasers and the Company, for so long as such Series A Debentures Senior Subordinated Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the Note Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' 12 3/4% new series of 13 3/8% Senior Discount Debentures Subordinated Notes due 2009 (the "SERIES B DEBENTURESNEW SENIOR SUBORDINATED NOTES"), to be offered in exchange for the Series A ------------------- Debentures Senior Subordinated Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and the Note Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Senior Subordinated Notes and to use its their reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. Holders (including subsequent transferees) of the Unit Common Stock will have the registration rights set forth in a stockholders agreement (the "STOCKHOLDERS AGREEMENT"), dated as of the Closing Date, in form and substance reasonably satisfactory to the Initial Purchasers and the Company, among each of the Issuers, EAC III Inc. and certain of its affiliates (the "WRC STOCKHOLDERS"), and the Initial Purchasers. Holders of the Unit Common Stock shall also have certain "tag-along" rights and will be subject to certain "drag-along" rights with respect to sales of Common Stock by EAC III Inc. and its affiliates to third parties. Pursuant to the Stockholders Agreement, the Company will agree to file a registration statement upon exercise of a demand registration right of the holders of the Unit Common Stock (the "EQUITY REGISTRATION STATEMENT") covering the resale of the Unit Common Stock by the holder thereof and to use all commercially reasonable best efforts to cause such Equity Registration Statement to be declared effective and to remain effective for the period specified in the Stockholders Agreement. This Agreement, the Securities, the Unit Agreement, the Stockholders Agreement, the Indenture, the Debentures Notes, the Note Guarantees, the Senior Credit Facilities (as described in the Offering Memorandum) and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Senior Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) to persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" (as defined in Rule 144A under the Act Securities Act) ("QIBS"), and ) in reliance upon Rule 144A under the Securities Act or (ii) in offshore transactions to certain eligible persons to which the Initial Purchaser is permitted to ---- purchase offer and sell the Series A Debentures in offshore transactions Senior Notes in reliance upon Regulation S under the Securities Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers Purchaser will offer the Series A Debentures Senior Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Senior Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Senior Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and Senior Notes, the Registration Rights Agreement, the Investment Agreement dated February 23, 1998 (the "INVESTMENT AGREEMENT") between the Company and TPG Oxford LLC ("TPG") and the Term Loan Agreement to be dated May 13, 1998 (the "TERM LOAN AGREEMENT") among the Company and the Initial Purchaser, as arranger, DLJ Capital Funding, Inc., as syndication agent, and IBJ Schrxxxx Xxxk & Trust Company, as facility manager, and the lenders named therein are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the Subsidiary Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/88 1/2% Series B Senior Discount Debentures Subordinated Notes due 2009 2010 (the "SERIES Series B DEBENTURESNotes"), and the guarantees thereof by each of the Subsidiary Guarantors (the "Series B Guarantees") to be offered in exchange for the Series A ------------------- Debentures Notes and the Series A Guarantees thereof (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, the Guarantees and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company, and the Company understands, that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchasers hereunder on the terms set forth in the Time of Sale Document and the Final Offering Memorandum, as amended or supplemented, solely Memorandum to persons (ithe “Subsequent Purchasers”) persons whom the Initial Purchasers reasonably believe to be "(i) are “qualified institutional buyers" ” (as defined in Rule 144A under the Act Securities Act) ("QIBS"“QIBs”), and or (ii) persons permitted to ---- purchase the Series A Debentures are not “U.S. persons” (as defined in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER"Securities Act) (and in compliance with the laws applicable to such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% jurisdictions outside of the principal amount thereof. Such price may be changed at any time without noticeUnited States. Holders of the Notes (including subsequent transfereesSubsequent Purchasers) of the Series A Debentures will have the registration rights set forth in the registration rights agreement applicable to the Notes (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, “Registration Rights Agreement”) in ----------------------------- substantially the form of attached as Exhibit A hereto, for so long to be executed on and dated as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" of the Closing Date (as defined in the ------------------------------ Registration Rights Agreementbelow). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree agree, among other things, to file with the Securities and Exchange Commission SEC (the "COMMISSION") under the circumstances set forth therein, (ia) a registration ---------- statement under the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), notes and guarantees to be offered in exchange for the Series A ------------------- Debentures Notes (the “Exchange Notes”) and the Guarantees (the “Exchange Guarantees”) which shall be identical to the Notes and the Guarantees, except that the Exchange Notes and the Exchange Guarantees shall have been registered pursuant to the Exchange Offer Registration Statement and will not be subject to restrictions on transfer or contain additional interest provisions, (such offer to exchange being referred to as the "EXCHANGE OFFER"“Exchange Offer”), and/or (b) -------------- and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and the Guarantees. If required under the Registration Rights Agreement, the Company will issue Exchange Notes (the “Private Exchange Notes”) and the Guarantors will issue the Exchange Guarantees (“Private Exchange Guarantees”) to use its best efforts the Initial Purchasers. If the Company and the Guarantors fail to cause such satisfy their obligations under the Registration Statements Rights Agreement, the Company will be required to pay additional interest to the holders of the Notes under certain circumstances to be declared and remain effective and usable for the periods specified set forth in the Registration Rights Agreement and to consummate the Exchange OfferAgreement. This Agreement, the Indenture, the Debentures Registration Rights Agreement, the Notes, the Guarantees, the Exchange Notes, the Exchange Guarantees, the Private Exchange Notes and the Registration Rights Agreement Private Exchange Guarantees are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTS“Documents”, and the transactions contemplated hereby and thereby are collectively referred to herein as the “Transactions”." -------------------

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers, and the Issuers understand, that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES") some or all of -------------- the Series A Debentures Units purchased by the Initial Purchaser hereunder on the terms set forth in the Final Offering MemorandumCircular, as amended or supplemented, solely to persons (the "SUBSEQUENT PURCHASERS") whom the Initial Purchaser (i) persons whom the Initial Purchasers reasonably believe believes to be "qualified institutional buyers" ("QIBS") as defined in Rule 144A under the Act ("QIBS")Act, and as such may be amended from time to time, (ii) reasonably believes (based upon written representations made by such persons permitted to ---- purchase the Series A Debentures Initial Purchaser) to be institutional "accredited investors" ("ACCREDITED INVESTORS") as defined in offshore transactions Rule 501(a)(1), (2), (3) or (7) under the Act, (iii) reasonably believes to be non-U.S. persons in reliance upon Regulation S under the Act or (eachiv) reasonably believes to be a purchaser referred to in the Final Canadian Offering Memorandum under the caption "Representation and Agreement by Purchasers." Pursuant to the Indenture, the Company shall fully and unconditionally guarantee, on a senior secured basis, to each holder of Subsidiary Notes and the Trustee, the payment and performance of Sport Maska's obligations under the Indenture and Subsidiary Notes (the "REGULATION S PURCHASERPARENT GUARANTEE") and Sport Maska shall fully and unconditionally guarantee, on a senior secured basis, to each holder of Parent Notes and the Trustee, the payment and performance of the Company's obligations under the Indenture and the Parent Notes (the "SPORT MASKA Guarantee"). All Restricted Subsidiaries (as defined in the Indenture) of the Company, excluding the Company's Finnish subsidiaries, jointly and severally, shall fully and unconditionally guarantee, on a senior secured basis, to each holder of the Notes and the Trustee, the payment and performance of the Company's obligations under the Indenture and the Notes (each such persons ---------------------- specified in clauses (i) and (ii) subsidiary being referred to herein as a "SUBSIDIARY GUARANTOR" and each such guarantee being referred to herein as a "GUARANTEE;" PROVIDED, HOWEVER, that the "ELIGIBLE -------- PURCHASERS"security interest in the assets of Jofa AB, the Company's Swedish subsidiary, will be limited to $15,000,000). The Initial Purchasers will offer Pursuant to the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" Collateral Agreements (as defined in the ------------------------------ Registration Rights Agreement). Pursuant Indenture) to be entered into by the Registration Rights AgreementIssuers, the Issuers Subsidiary Guarantors and the Trustee on the Closing Date, the Notes and Guarantees will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to be secured by substantially all of the Issuers' new series tangible and intangible assets and the tangible and intangible assets of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES")Issuers' Restricted Subsidiaries, excluding the Company's Finnish subsidiaries, subject to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as prior ranking claims on accounts receivable, inventories and other assets by the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 lenders under the Act (Issuers' and the "SHELF REGISTRATION STATEMENT" andCompany's Restricted Subsidiaries' seasonal working capital facilities, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale and by ----------------------- certain holders a pledge of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for stock of the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSCompany's first-tier Finnish subsidiary." -------------------

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company, and the Company understands, that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) some or all of -------------- the Series A Debentures Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Pricing Disclosure Package and the Final Offering MemorandumCircular, as amended or supplemented, solely to persons (ithe “Subsequent Purchasers”) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "(a) “qualified institutional buyers" ” as defined in Rule 144A under the Securities Act ("QIBS"“QIBs”), and as such Rule may be amended from time to time, (iib) a limited number of institutional “accredited investors” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act (“Accredited Investors”), as such Rule may be amended from time to time, that make certain representations or warranties to the Initial Purchaser as set forth in the Accredited Investor Letter attached as Annex A to the Offering Circular, or (c) non-U.S. persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Securities Act (each“Regulation S Persons”), as such Rule may be amended from time to time. Pursuant to the Indenture, each Domestic Restricted Subsidiary (as hereinafter defined) of the Company shall fully and unconditionally guarantee to each holder of the Notes and the Trustee, on a "REGULATION S PURCHASER") senior secured basis, the payment and performance of the Company’s Obligations under the Indenture and the Notes (each such persons ---------------------- specified in clauses (i) and (ii) subsidiary being referred to herein as the "ELIGIBLE -------- PURCHASERS"a “Guarantor” and each such guarantee being referred to herein as a “Guarantee”). The Initial Purchasers will offer Pursuant to the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% terms of the principal amount thereof. Such price may Indenture and the Collateral Agreements, all of the Company’s and each Guarantor’s obligations under the Indenture, the Notes and the Guarantees will be changed at any time without noticesecured by a Lien on substantially all the assets of the Company and the Guarantors; provided, however, that pursuant to the terms of the Intercreditor Agreement, such Lien will be contractually subordinated to a Lien on the Collateral that secures all Obligations under the Amended and Restated Credit Agreement and certain other permitted indebtedness. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement applicable to the Notes (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be executed on and dated as of the Closing Date, in ----------------------------- substantially a form reasonably acceptable to the form Initial Purchaser in conformity in all material respects with the description of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined registration rights contained in the ------------------------------ Registration Rights Agreement)Pricing Disclosure Package and the Final Offering Circular. Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, SEC (i) a registration ---------- statement under the Securities Act relating to the 14% Senior Secured Notes due 2011 (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- “Exchange Notes”), which shall be identical to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 Notes (except that the "SERIES B DEBENTURES"), Exchange Notes shall have been registered pursuant to such registration statement and will not be subject to restrictions on transfer or contain additional interest provisions) to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and “Exchange Notes Offer”), and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- “Shelf Registration Statement, the "REGISTRATION STATEMENTS"”) relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in Notes. If required under the Registration Rights Agreement Agreement, the Company will issue Exchange Notes and cause the Guarantors to consummate issue exchange guarantees to the Initial Purchaser (the “Private Exchange OfferNotes” and “Private Exchange Guarantees,” respectively). If the Company fails to satisfy its obligations under the Registration Rights Agreement, it will be required to pay additional interest to the holders of the Notes under certain circumstances in accordance with the terms of the Registration Rights Agreement. This Agreement, the Indenture, the Debentures and Collateral Agreements, the Registration Rights Agreement, the Notes, the Exchange Notes, the Private Exchange Notes, the Guarantees and the Private Exchange Guarantees are collectively referred to herein as the “Transaction Documents.” The Offering, the entry into the Amended and Restated Credit Agreement and the application of the proceeds therefrom as described in the Pricing Disclosure Package and the Offering Circular and the issuance and sale of the Notes in accordance with this Agreement are hereinafter sometimes collectively referred to collectively herein as the "OPERATIVE DOCUMENTS“Transactions”." -------------------

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers that the Initial Purchasers Purchaser will make offers to sell (the "EXEMPT RESALES"“Exempt Resales”) of -------------- the Series A Debentures Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (ia) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "“qualified institutional buyers" ,” as defined in Rule 144A under the Act ("QIBS"“QIBs”), and (iib) persons permitted to ---- purchase the Series A Debentures a limited number of institutional “accredited investors,” as defined in offshore transactions in reliance upon Regulation S Rule 501(a)(1), (2), (3) or (7) under the Act that make certain representations and warranties to the Initial Purchaser and the Issuers (each“Accredited Investors” and, together with QIBs, “Eligible Purchasers), which representations and warranties are set forth in the form of Accredited Investor Letter attached as Annex A to the Offering Circular (the “Accredited Investor Letter”). On the Closing Date, the Issuers and Parent will enter into certain security and pledge agreements, mortgages and certain other collateral documents (collectively, and together with the Cash Collateral Agreement (as defined below), the “Security Documents”), that will provide for the grant of the Security Interests in the Collateral to U.S. Bank National Association, as collateral agent for the Trustee and the holders of the Notes (in such capacity, the “Secured Party”). The Security Interests will secure the payment and performance when due of all of the respective obligations of the Issuers under the Indenture and the Notes. On the Closing Date, the Issuers, the Trustee and the disbursement agent shall enter into a "REGULATION S PURCHASER"cash collateral and disbursement agreement (the “Cash Collateral Agreement”), that will provide for the deposit of approximately $3.3 million of the net proceeds from the Offering into an interest reserve account (the “Interest Reserve Account”) to be used to fund the payment of the first nine months of interest on the Notes and the deposit of the remaining net proceeds from the Offering into a construction disbursement account (such persons ---------------------- specified the “Construction Disbursement Account”) to be used in clauses connection with the design, construction, development, equipping and opening costs of the Facility. The Notes are being sold in connection with a financing related to the design, development, construction, equipping and operation by the Company of the Xxxxxxx Xx Worth Casino in Worth County, Iowa (the “Facility”). In connection therewith, the Issuers have entered into, or will enter into at or before Closing, the following documents (the “Facility Documents”): (i) Standard Form of Agreement Between Owner and Contractor, dated as of June 6, 2005 (the “Construction Contract”), by and between the Company and Xxxxxx Construction Company, (ii) being the Standard Form of Agreement between Owner and Architect, dated March 1, 2005, by and between the Company and Xxxxxxxx Xxxxxxx and Associates, AIA, Ltd., and (iii) the Management Services Agreement (the “Management Services Agreement”), to be entered into by and among the Company and Peninsula Gaming Partners, LLC (“PGP”). The following documents are referred to herein as the "ELIGIBLE -------- PURCHASERS"“Note Documents”: (i) this Agreement, (ii) the Indenture, (iii) the Notes (including the Guarantees (if any)), and (iv) the Security Documents. The Initial Purchasers will offer Note Documents, collectively with the Series A Debentures Facility Documents, are referred to ---------- Eligible Purchasers initially at a price equal to 52.175% herein as the “Operative Documents.” The transactions contemplated by the Operative Documents (including, without limitation, (i) the Offering and the application of the principal amount thereof. Such price may be changed at any time without notice. Holders net proceeds therefrom as described in the Offering Circular, as amended or supplemented, (including subsequent transfereesii) the issuance and sale of the Notes in accordance with this Agreement, (iii) the creation, grant, recording and perfection of the Security Interests, (iv) the contribution by Peninsula Gaming, LLC (“PGL”) of all of the Series A Debentures will have the registration rights set forth outstanding membership interests in the registration rights agreement Company to Parent, such that immediately following such contribution each of the Issuers is a direct wholly owned subsidiary of Parent and Parent is a direct wholly owned subsidiary of PGL (the "REGISTRATION RIGHTS AGREEMENT"“Contribution”), and (v) the design, development, construction, equipping, management and operation of the Facility, collectively are referred to be dated herein as the “Transactions.” In addition, following the Closing Date, the Company anticipates entering into a new senior secured credit facility (the “New Credit Facility”) and, in ----------------------------- connection with the New Credit Facility, the Trustee, as Secured Party, and the lenders thereunder or their agent shall enter into (and the Issuers and Parent shall acknowledge) an Intercreditor Agreement substantially in the form of Exhibit A hereto, for so long attached as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant an exhibit to the Registration Rights Agreement, the Issuers will agree to file with the Securities and Exchange Commission Indenture (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8% Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"“Intercreditor Agreement”), to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------

Terms of Offering. The Initial Purchasers have advised the Company ----------------- Issuers that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of the -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) to persons permitted to purchase ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S Regulations under the Act (each, a "REGULATION S PURCHASERRegulations Purchaser") (such persons ---------------------- specified in clauses ---------------------- (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The ------------------- Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a the offering price equal to 52.175% set forth on the cover of the principal amount thereofOffering Memorandum. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined ------------------------------ described in the ------------------------------ Registration Rights Agreement)Offering Memorandum and containing other customary and reasonable provisions. Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") ), under the circumstances set forth therein, (i) a registration ---------- ----------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 10% Series B Senior Discount Debentures due 2009 Subordinated Notes (the "SERIES Series B DEBENTURESNotes"), -------------- to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") and/or -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------4

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers offer and sell (the "EXEMPT RESALES"“Exempt Resales”) of -------------- the Series A Debentures Securities purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "“qualified institutional buyers" ” as defined in Rule 144A under of the Act ("QIBS"), “QIBs”) and (ii) persons permitted to ---- purchase who the Series A Debentures Initial Purchasers reasonably believe are regularly engaged in offshore transactions the business of lending money or purchasing debt securities from issuers in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") primary offerings (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"“Eligible Purchasers”), and the parties hereto acknowledge and agree that a purchaser is an “Eligible Purchaser” if it is a bank, savings and loan association, insurance company, pension trust, fund (including partnerships, trusts, mutual funds, hedge funds, separate accounts, and portfolio managers) or any other entity that regularly lends money or purchases debt securities from issuers in primary offerings. The Initial Purchasers will offer the Series A Debentures Securities to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Securities will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"“Registration Rights Agreement”), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A Schedule D hereto, for so long as such Series A Debentures Securities constitute "TRANSFER RESTRICTED SECURITIES" “Transfer Restricted Securities” (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION"“Commission”) under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT"“Exchange Offer Registration Statement”) relating ------------------------------------- to the Issuers' a new series of 13 the Company’s 6 3/8% Senior Discount Debentures Notes due 2009 2015 guaranteed by the Guarantors (the "SERIES B DEBENTURES"“Series O Notes” and, together with the Securities, the “Notes”), to be offered in exchange for the Series A ------------------- Debentures Securities (such offer to exchange being referred to as the "EXCHANGE OFFER"“Exchange Offer”) -------------- and the Guarantees by the Guarantors thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" “Shelf Registration Statement” and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS"“Registration Statements”) relating to the resale by ----------------------- certain holders of the Series A Debentures Securities and to use its their best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Senior Discount Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to persons (ieach, a "144A Purchaser") persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) or persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon otherwise exempt under Regulation S under of the Securities Act (eachtogether with QIBs, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers Purchaser will offer the Series A Debentures Senior Discount Notes to ---------- Eligible Purchasers initially at a price equal to 52.17554.788% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Senior Discount Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing DateDate (as defined below), in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Senior Discount Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers NEHC will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 (A) Company's 12 3/8% new Senior Discount Debentures Notes due 2009 2007 (the "SERIES B DEBENTURESNew Senior Discount Notes"), ) to be offered in exchange for the Series A ------------------- Debentures Senior Discount Notes, (such offer to exchange being referred to as the "EXCHANGE OFFERRegistered Exchange Offer") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Senior Discount Notes, and to use its their best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Registered Exchange Offer. This Agreement, the Indenture, the Debentures Notes, and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES") of -------------- the Series A Debentures Notes purchased by the Initial Purchasers hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be a) "qualified institutional buyers," as defined in Rule 144A under the Act ("QIBSQIBs"), and or b) institutional "accredited investors," as defined in Rule 501(a)(1), (ii2), (3) persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon or (7) of Regulation S D under the Act Act, that make certain representations and warranties to the Issuers (each"ACCREDITED INVESTORS" and, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the together with QIBs, "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer Holders of the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the Guarantors will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION") ), under the circumstances set forth therein, (ia) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/89 1/2% Senior Discount Debentures Secured Notes due 2009 2010, Series B, of the Issuers (the "SERIES B DEBENTURESNOTES"), identical in all material respects to the Series A Notes, including with respect to the Guarantees thereof (except that the Series B Notes shall have been registered pursuant to such registration statement), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "REGISTERED EXCHANGE OFFER") -------------- ), and (iib) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes. On the Closing Date, the Grantors will enter into certain security and pledge agreements, mortgages and certain other documents, that will provide for the grant of the Security Interests in the Collateral to use its best efforts the Trustee, as secured party (in such capacity, the "SECURED PARTY"), or will prohibit transfer or mortgage of certain leasehold interests, in each case, for the benefit of the holders of the Notes (such documents, collectively, the "SECURITY DOCUMENTS"). The Security Interests will secure the payment and performance when due of all of the obligations of the Majestic Entities under the Indenture, the Notes and the Security Documents. In addition, on the Closing Date, the Issuers expect to cause such Registration Statements enter into a new senior secured credit facility (the "NEW CREDIT FACILITY"). In connection with entering into the New Credit Facility, the Trustee and the lender under the New Credit Facility shall enter into an Intercreditor Agreement, to be declared dated as of the Closing Date, in a form reasonably satisfactory to the Initial Purchasers, which form shall be attached as an exhibit to the Indenture (the "INTERCREDITOR AGREEMENT"). In connection with the Offering contemplated hereby, the Issuers are offering to purchase (the "STAR TENDER OFFER") any and remain effective all of their outstanding 10 7/8% Senior Secured Notes due 2006 (the "OLD STAR NOTES") and usable for soliciting consents to the periods specified adoption of certain amendments to the indenture governing the Old Star Notes (the "OLD STAR NOTES INDENTURE") and the release of the liens on collateral securing the Old Star Notes, each as more fully described in the Registration Rights Agreement documents and instruments related thereto (the "STAR TENDER OFFER DOCUMENTS"). In the event that any of the Old Star Notes are not repurchased in the Star Tender Offer, the Company shall redeem such Old Star Notes pursuant to consummate the Exchange terms of the Old Star Notes Indenture (the "STAR REDEMPTION"). Also in connection with the Offering, Majestic Investor Holdings, LLC and Majestic Investor Capital Corp. (together the "INVESTOR NOTES ISSUERS") are offering to purchase (the "INVESTOR TENDER OFFER," and together with the Star Tender Offer, the "TENDER OFFERS") any and all of their outstanding 11.653% Senior Secured Notes due 2007 (the "OLD INVESTOR NOTES," and together with the Old Star Notes, the "OLD NOTES") and soliciting consents to the adoption of certain amendments to the indenture governing the Old Investor Notes, the termination of the guarantees by the guarantors of the Old Investor Notes and the release of liens on collateral securing the Old Investor Notes, each as more fully described in the documents and instruments related thereto (the "INVESTOR TENDER OFFER DOCUMENTS," and collectively with the Star Tender Offer Documents, the "TENDER OFFER DOCUMENTS"). This Agreement, the Indenture, the Debentures Registration Rights Agreement, the Notes, the Guarantees, the Security Documents and the Registration Rights Agreement Tender Offer Documents, collectively are hereinafter sometimes referred to collectively herein as the "OPERATIVE DOCUMENTS." -------------------The New Credit Facility and the Intercreditor Agreement, together with all other documents or instruments executed by the Majestic Entities in connection with the transactions contemplated thereby, collectively are referred to herein as the "BANK DOCUMENTS" and, together with the Operative Documents, the "DOCUMENTS." The transactions contemplated by the Operative Documents, including, without limitation, the Offering and the application of the proceeds therefrom as described in the Offering Circular, the issuance and sale of the Notes in accordance with this Agreement, the creation, grant, recording and perfection of the Security Interests, the Tender Offers, and the Star Redemption collectively are referred to herein as the "OPERATIVE TRANSACTIONS" and, collectively with the transactions contemplated by the other Documents, including without limitation the borrowing (if any) under the New Credit Facility, the "TRANSACTIONS."

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Senior Notes purchased by the Initial Purchasers hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons (each, a "144A Purchaser") whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to ---- purchase the Series A Debentures a limited number of other institutional "accredited investors," as defined in offshore transactions in reliance upon Regulation S Rule 501(a) (1), (2), (3) and (7) under the Act Act, that make certain representations and agreements to the Company (each, a an "REGULATION S PURCHASERAccredited Institution") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures Senior Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Senior Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing DateDate (as defined below), in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Senior Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to (A) the Issuers' new series of 13 3/8% New Senior Discount Debentures due 2009 (the "SERIES B DEBENTURES"), Notes to be offered in exchange for the Series A ------------------- Debentures Senior Notes, (such offer to exchange being referred to as the "EXCHANGE OFFERRegistered Exchange Offer") -------------- and and/or (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, and together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Senior Notes, and to use its their best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offereffective. This Agreement, the Indenture, the Debentures Indenture and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder under this Agreement on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) a limited number of other institutional "accredited investors," as defined in Rule 501(a) (1), (2), (3) or (7) under the Act, that make certain representations and agreements to the Issuers as set forth in Annex A to the Offering Circular (each, an "Accredited Institution") and (iii) persons permitted to ---- purchase outside the Series A Debentures United States in offshore transactions in reliance upon on Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i), (ii) and (iiiii) above being referred to herein as as, the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers Purchaser will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100.0% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), ) to be dated the Closing DateDate (as defined below), in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Service's 103/4% Series B Senior Discount Debentures Secured Notes due 2009 2011 (the "SERIES Series B DEBENTURESNotes"), ) to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and the Guarantors' guarantee of the Series B Notes and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes. The Issuers and to use its best efforts to cause the Guarantors will enter into, among others, the collateral documents listed on Schedule A attached hereto (all such Registration Statements to be declared and remain effective and usable collateral documents, collectively, the "Collateral Documents") dated as of the Closing Date in favor of the Collateral Agent for the periods specified benefit of the Secured Parties. The Security Interests will secure the payment and performance when due of all the Secured Obligations (used herein as defined in the Collateral Documents). The following documents are hereinafter collectively referred to as "Operative Documents": (i) this Agreement, (ii) the Indenture, (iii) the Notes, (iv) the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, (v) the IndentureGuarantees, (vi) the Debentures Collateral Documents, (vii) the Merger Agreement, (viii) the Stock Purchase Agreement, (ix) the Credit Facility and (x) the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSSecurities Purchase Agreement." -------------------

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased -------------- hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred a limited number of other institutional "accredited ---- investors," as defined in Rule 501(a) (1), (2), (3) or (7) under the Act, that make certain representations and agreements to herein as the Issuers (each, an "Accredited ---------- Institution" and, together with the QIBs, the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The ----------- ------------------- Initial Purchasers Purchaser will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), ) to be dated the Closing DateDate (as defined ----------------------------- below), in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/813% Senior Discount Debentures Series B First Mortgage Notes due 2009 2004 With Contingent Interest (the "SERIES Series B DEBENTURESNotes"), ) to be offered in exchange for the Series A ------------------- Debentures (such offer to exchange being referred to as the "EXCHANGE OFFER") Notes -------------- and and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with ---------------------------- the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") ----------------------- relating to the resale by ----------------------- certain holders of the Series A Debentures Notes, and to use its their best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This AgreementThe Notes will be secured obligations and the Issuers will enter into a deed of trust, a security agreement, a collateral assignment, a cash collateral and disbursement agreement, all certificates to be delivered in connection therewith, a pledge and assignment, issuer pledge agreement, UCC-1 financing statements, fixture filings, environmental indemnity, assignment of patents, assignment of trademarks, assignment of copyrights, consent to assignment of licensing agreement, consent to assignment of management agreement, consent to assignment of construction contract, manager subordination agreement, loss payee and additional insured endorsements, endorsements of any performance or payment bonds, waivers of liens, consents to assignments and certain other collateral agreements (collectively the "Collateral Documents") dated on or prior to the Closing Date in favor of the -------------------- Trustee that will provide for the grant of Security Interests in the Collateral to the Trustee for the benefit of the holders of the Notes. The Security Interests will secure the payment and performance when due of all the respective obligations of the Issuers under the Notes, the Indenture, the Debentures Indenture and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSCollateral Documents." -------------------

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 12% Series B Senior Discount Debentures Notes due 2009 (the "SERIES Series B DEBENTURESNotes"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALES") of -------------- the Series A Debentures Units purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), and (ii) persons permitted to ---- purchase the Series A Debentures in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION S PURCHASER") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers Purchaser will offer the Series A Debentures Units to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof$972.54 per Unit. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 12% Senior Discount Debentures Subordinated Notes due 2009 (the "SERIES B DEBENTURESNOTES"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFER") -------------- and or (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its their respective reasonable best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. Holders (including subsequent transferees) of the Warrants and the Warrant Shares will have the rights set forth in the warrant registration rights agreement (the "WARRANT REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in substantially the form attached as Exhibit B hereto. Pursuant to the Warrant Registration Rights Agreement, the Company will agree to file a shelf registration statement (the "WARRANT REGISTRATION STATEMENT") covering resales of the Warrants, the issuance of Warrant Shares upon exercise of Warrants sold pursuant to such Warrant Registration Statement and resales of Warrant Shares, and to use its reasonable best efforts to have such Warrant Registration Statement declared and remain effective and usable for the periods specified in the Registration Rights Agreement. This Agreement, the Indenture, the Debentures and Notes, the Subsidiary Note Guarantees, the Registration Rights Agreement, the Warrant Agreement, the Warrants, the Warrant Assumption Agreement, the Warrant Registration Rights Agreement, the Merger Agreement, the Voting Agreement and Irrevocable Proxy, the Credit Agreement, the LLC Assignment/Assumption Agreement and the LLC Services Agreement (as defined below) are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Issuer that the Initial Purchasers will make offers to sell (the "EXEMPT RESALES") some or all of -------------- the Series A Debentures Notes purchased by the Purchasers hereunder on the terms set forth in the Offering MemorandumCircular, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBS"), ) and (ii) persons permitted to ---- purchase the Series A Debentures a limited number of institutional "accredited investors" as defined in offshore transactions in reliance upon Regulation S Rule 501(a)(1), (2), (3) or (7) under the Act (each, a "REGULATION S PURCHASERACCREDITED INVESTORS") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERS"). The Initial Purchasers will offer Holders of the Series A Debentures to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof. Such price may be changed at any time without notice. Holders Notes (including subsequent transferees) of the Series A Debentures will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be executed on and dated as of the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Issuer will agree agree, among other things, to file with the Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating ------------------------------------- to to, among other things, the Issuers' new series of 13 3/810-1/4% Senior Discount Debentures Secured Notes due 2009 2004, Series B, of the Issuer (the "SERIES B DEBENTURESNOTES" and, together with the Series A Notes, the "NOTES"), identical in all material respects to the Series A Notes (except that the Series B Notes shall have been registered pursuant to such registration statement) to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "REGISTERED EXCHANGE OFFER") -------------- and and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by ----------------------- certain holders of the Series A Debentures and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable Notes. On the Closing Date, the Issuer will enter into the Security Agreements that will provide for the periods specified grant of the Security Interests in the Registration Rights Agreement Collateral to the Trustee, as collateral agent, for the benefit of the holders of the Notes. The Security Interests will secure the payment and to consummate performance when due of all of the Exchange Offerobligations of the Issuer, under the Indenture, the Notes, and the Security Agreements. This Agreement, the Indenture, the Debentures and the Registration Rights Agreement Agreement, the Security Agreements, the Notes and all other documents or instruments executed by the Issuer or any of the Subsidiaries in connection with the transactions contemplated hereby and thereby are hereinafter sometimes referred to collectively herein as the "OPERATIVE DOCUMENTS." -------------------The transactions contemplated by the Documents, including without limitation, the Offering and the use of the proceeds therefrom as described in the Offering Circular, are collectively referred to herein as the "TRANSACTIONS."

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Units purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) persons permitted to purchase Units in ---- purchase the Series A Debentures in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being ---------------------- referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will ------------------- offer the Series A Debentures Units to ---------- Eligible Purchasers initially at a price equal to 52.175% of the principal amount thereof$507.77 per Unit. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Units will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTNotes ----- Registration Rights Agreement"), to be dated the Closing Date, in substantially ----------------------------- substantially the form of Exhibit A hereto, and the registration rights agreement (the --------- "Warrant Registration Rights Agreement") to be dated as of the Closing Date, ------------------------------------- substantially in the form of Exhibit B hereto, for so long as such Series A Debentures Initial --------- Notes, Warrants or Warrant Shares constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" ------------------------------ (as defined in the ------------------------------ Notes Registration Rights Agreement and the Warrant Registration Rights Agreement, as applicable). Pursuant to the Notes Registration Rights Agreement and the Warrant Registration Rights Agreement, (i) the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth ---------- therein, (ix) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer -------------- Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 14% Senior Discount Debentures Notes due 2009 ---------------------- 2010 (the "SERIES B DEBENTURESExchange Notes"), to be offered in exchange for the Series A ------------------- Debentures Initial Notes -------------- (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") and the -------------- Guarantees thereof and (iiy) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTNotes Shelf Registration Statement" and, together with the ---------------------------------- Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSNotes Registration Statements") ----------------------------- relating to the resale by ----------------------- certain holders of the Series A Debentures Initial Notes and to use its their respective reasonable best efforts to cause such Notes Registration Statements to be declared and remain effective and usable for the periods specified in the Notes Registration Rights Agreement and to consummate the Exchange Offer. This AgreementOffer and (ii) the Company will agree to file with the Commission under the circumstances set forth therein a registration statement pursuant to Rule 415 under the Act (the "Warrant Shelf Registration Statement") relating to the resale of the ------------------------------------ Warrants, the Indenture, issuance of shares of Common Stock upon exercise of the Debentures Warrants and the resale of the Warrant Shares and to use its reasonable best efforts to cause such Warrant Shelf Registration Rights Agreement are hereinafter sometimes referred Statement to collectively as be declared and remain effective and usable for the "OPERATIVE DOCUMENTS." -------------------periods specified in

Terms of Offering. The Initial Purchasers have Purchaser has advised the ----------------- Issuers Company that the Initial Purchasers Purchaser will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers Purchaser reasonably believe believes to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), ) and (ii) to persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers Purchaser will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 83/4% Series B Senior Discount Debentures Notes due 2009 2011 (the "SERIES Series B DEBENTURESNotes"), to be offered in exchange for the Series A ------------------- Debentures Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and the Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its their best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes, the Guarantees and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"

Terms of Offering. The Initial Purchasers have advised the ----------------- Issuers Company that the Initial Purchasers will make offers (the "EXEMPT RESALESExempt Resales") of -------------- the Series A Debentures Notes purchased hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom the Initial Purchasers reasonably believe to be "qualified institutional buyers" as defined in Rule 144A under the Act ("QIBSQIBs"), and (ii) persons permitted to ---- purchase the Series A Debentures Notes in offshore transactions in reliance upon Regulation S under the Act (each, a "REGULATION Regulation S PURCHASERPurchaser") (such persons ---------------------- specified in clauses (i) and (ii) being referred to herein as the "ELIGIBLE -------- PURCHASERSEligible Purchasers"). The Initial Purchasers will offer the Series A Debentures Notes to ---------- Eligible Purchasers initially at a price equal to 52.175100% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Series A Debentures Notes will have the registration rights set forth in the registration rights agreement (the "REGISTRATION RIGHTS AGREEMENTRegistration Rights Agreement"), to be dated the Closing Date, in ----------------------------- substantially the form of Exhibit A hereto, for so long as such Series A Debentures Notes constitute "TRANSFER RESTRICTED SECURITIESTransfer Restricted Securities" (as defined in the ------------------------------ Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers Company will agree to file with the Securities and Exchange Commission (the "COMMISSIONCommission") under the circumstances set forth therein, (i) a registration ---------- statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENTExchange Offer Registration Statement") relating ------------------------------------- to the Issuers' new series of 13 3/8Company's 10% SeriesyB Senior Discount Debentures due 2009 Subordinated Notes Due 2006 (the "SERIES Series B DEBENTURESNotes"), to be offered in exchange for the Series A ------------------- Debentures SeriesyA Notes (such offer to exchange being referred to as the "EXCHANGE OFFERExchange Offer") -------------- and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENTShelf Registration Statement" and, together with the Exchange Offer ---------------------------- Registration Statement, the "REGISTRATION STATEMENTSRegistration Statements") relating to the resale by ----------------------- certain holders of the Series A Debentures Notes and to use its best efforts to cause such Registration Statements to be declared and remain effective and usable for the periods specified in the Registration Rights Agreement and to consummate the Exchange Offer. This Agreement, the Indenture, the Debentures Notes and the Registration Rights Agreement are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTSOperative Documents." -------------------"