Common use of The Securities Clause in Contracts

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the Initial Purchaser $200,000,000 aggregate original principal amount of $30,000,000its 9.00% Senior Subordinated Notes due 2012 (the "Notes"). The Senior Subordinated Secured Convertible obligations of the Company under the Indenture (as hereinafter defined) and the Notes shall will be in unconditionally guaranteed (the form set forth "Guarantees"), on a joint and several basis, by each Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), to be dated as Exhibit 2.1 attached hereto of February 18, 2004, among the Company, the Guarantors and The Bank of New York, as trustee (the "Trustee"). The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Notes"Securities." The Securities will be offered and sold to the Initial Purchaser without such offers and sales being registered under the Securities Act of 1933, which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall as amended (a) be payable on September 30, 2009 together with the rules and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment regulations of the Convertible Notes in full. The Convertible Notes shall be convertible at any timeSecurities and Exchange Commission (the "Commission") promulgated thereunder, the "Securities Act"), in whole or in part, in reliance on exemptions therefrom. In connection with the sole discretion sale of the Noteholder thereofSecurities, upon such Noteholder's delivery the Company has prepared a preliminary offering memorandum dated January 26, 2004 (the "Preliminary Memorandum") and a final offering memorandum dated February 6, 2004 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), each setting forth or including a description of notice the terms of the Securities, the terms of the offering of the Securities, a description of the Company and its subsidiaries and any material developments relating to the Company and its subsidiaries occurring after the date of its intent the most recent historical financial statements included therein. The Company and the Guarantors understand that the Initial Purchaser proposes to convertmake an offering of the Notes only on the terms and in the manner set forth in the Memorandum and Section 9 hereof as soon as the Initial Purchaser deems advisable after this Agreement has been executed and delivered, into (i) Senior Subordinated Secured Notes due September 30, 2009 to persons in the aggregate principal amount of $29,995,000 United States whom the Initial Purchaser reasonably believes to be qualified institutional buyers (or "QIBs") as defined in Rule 144A under the Securities Act, as such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversionrule may be amended from time to time ("Rule 144A"), in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), transactions under Rule 144A and (ii) Common Stock Purchase Warrants outside the United States to certain persons in reliance on Regulation S under the Securities Act ("Regulation S"). The Initial Purchaser and its direct and indirect transferees of the Company for Securities will be entitled to the purchase benefits of the Registration Rights Agreement to be dated as of February 18, 2004 among the parties hereto (subject the "Registration Rights Agreement") pursuant to adjustment which the Issuers have agreed, among other things, to file (i) a registration statement (the "Registration Statement") with the Commission registering the Securities or the Exchange Notes (as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis defined in the event Registration Rights Agreement) under the Securities Act or (ii) a shelf registration statement pursuant to Rule 415 under the Securities Act relating to the resale of the Securities by holders thereof or, if applicable, relating to the resale of Private Exchange Notes (as defined in the Registration Rights Agreement) by the Initial Purchaser pursuant to an exchange of the Notes for Private Exchange Notes. In connection with the Issuers' issuance and sale of the Securities, on January 20, 2004, the Company's parent, Affinity Group Holding, Inc. ("XXXX") (i) commenced a cash tender offer (the "Tender Offer") for any in part conversionand all of its outstanding 11% Senior Notes due 2007 (the "XXXX Notes") and (ii) concurrently therewith initiated a consent solicitation relating to the adoption of certain proposed amendments to the indenture, dated as of April 2, 1997, under which the XXXX Notes were issued. The Securities, the Exchange Notes, the Private Exchange Notes, the Indenture, the Registration Rights Agreement and this Agreement are herein collectively referred to as the "Basic Documents". The Issuers propose to issue the Securities simultaneously with the amendment of the Company's Common Stock senior credit facility (the "Warrant SharesAmendment") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants"allowing for, which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30among other things, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesSecurities and permitting (i) the distribution of the proceeds thereof to XXXX to fund the Tender Offer and the repurchase or redemption of any XXXX Notes that remain outstanding after the completion of the Tender Offer and (ii) the distribution by the Company of a dividend to its principal stockholder in the amount of $60.0 million (the "Transactions") (the Amendment and each other agreement entered into in connection therewith or in connection with the Transactions are hereinafter referred to as the "Transaction Documents"). Following the Transactions, the Company shall merge with XXXX and the Company shall remain as the surviving entity of that merger.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $450,000,000 aggregate principal amount of $29,995,000 its 9% Senior Notes due 2010 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be unconditionally guaranteed (Ythe "Guarantees" and, together with the Notes, the "Securities") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based by the Guarantors on a 360-day year of twelve 30-day monthssenior basis. The Securities are to be issued under an indenture (the "Indenture") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of January 25, 2002 by and between the Conversion Date Company and U.S. Bank, N.A., as trustee (the "Trustee"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated January 7, 2002 (the "Preliminary Memorandum") and a final offering memorandum dated January 17, 2002 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company and the Guarantors and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement to be dated January 25, 2002, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company and the Guarantors will agree, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Securities or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on Act. In connection with the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesSecurities, the Company is concurrently entering into a new $355,000,000 aggregate principal amount senior credit facility among the Company, the guarantors named therein, Bankers Trust Company, as administrative agent, and the other lenders party thereto (as amended, supplemented, modified, extended or restated from time to time, the "Senior Credit Agreement").

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions contained in this agreement (this "Agreement"), the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $75,000,000 aggregate principal amount of $29,995,000 its 101/4% Senior Notes due 2012 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Ycollectively, the "Guarantees") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year senior subordinated basis by each of twelve 30-day monthsthe Guarantors. The Notes and the Guarantees are collectively referred to herein as the "Securities"). The Notes are to be issued as "additional notes" pursuant to an indenture (the "Indenture") dated as of February 22, 2002 among the Issuers and The Bank of New York, as trustee (the "Trustee"), pursuant to which $260,000,000 aggregate principal amount of the 101/4 Senior Notes due 2012 (the "Original Securities") were issued on February 22, 2002 (the Notes will form a single series with the Original Securities under the Indenture). The Securities will be offered and sold to the Initial Purchasers without being registered under the United States Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. The Company will loan the proceeds from the Offering (as defined) to Bluewater Holding pursuant to an amended and restated intercompany loan (the "Intercompany Loan"). Bluewater Holding will use these loan proceeds to temporarily repay, in part, borrowings under the replacement credit agreement (the "Credit Agreement"), dated January 15, 2002, among Bluewater Holding and certain others named therein, certain banks and financial institutions named therein and Barclays Capital, Fortis Bank (Netherlands) N.V. and ING Bank N.V., as arrangers and to pay fees and expenses relating to the offering. The Intercompany Loan is subordinated on the same basis as the Guarantees. In connection with the sale of the Securities, the Issuers have prepared a final offering memorandum dated April 23, 2003 (the "Memorandum") setting forth or including a description of the terms of the Offering, the terms of the Securities, a description of the Issuers and material developments relating to the Issuers occurring after the date of the most recent historical financial statements included therein, if any. The Issuers understand that the Initial Purchasers propose to offer the Securities (the "Offering") on the unpaid principal amount thereof plus any interest owed terms and in arrears the manner set forth in the Memorandum and Section 8 hereof as soon as the Initial Purchasers deem advisable (after this Agreement has been executed and delivered) to persons in the United States whom the Initial Purchasers reasonably believe to be qualified institutional buyers ("Qualified Institutional Buyers" or "QIBs") as defined in Rule 144A under the Act, as such rule may be amended from time to time ("Rule 144A"), in transactions under Rule 144A, and outside the United States to certain persons in reliance on Regulation S under the Convertible Note as Act ("Regulation S"). The Initial Purchasers and their direct and indirect transferees of the Conversion Date Securities will be entitled to the benefits of a Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Issuers shall agree, among other things, to file with the Securities and Exchange Commission (the "Commission") (i) a registration statement (the "Registration Statement") relating to the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at to be offered in exchange for the rate of 12% per annumNotes and/or (ii) if and to the extent required by the Registration Rights Agreement, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on a shelf registration statement pursuant to Rule 415 under the Conversion Date, and at maturity or prior prepayment Act relating to the resale of the Notes in full. The Company has authorized the issuance Securities by certain holders thereof or, if applicable, relating to the Noteholders resale of Private Exchange Notes (as defined in the Registration Rights Agreement) of the Convertible Notes, and upon conversion thereof, Issuers substantially identical to the Exchange Notes and by the Warrants, and upon exercise Initial Purchasers pursuant to an exchange of the Warrants the issuance and sale of the Warrant SharesSecurities for Private Exchange Notes.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein -------------- contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $100,000,000 aggregate principal amount of $29,995,000 its 10 3/8% Senior Subordinated Notes Due 2007, Series A (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Ythe ----- "Guarantees") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) senior subordinated basis by the Guarantors named on the unpaid principal amount thereof plus any interest owed in arrears on ---------- signature pages hereto (the Convertible Note "Guarantors"). The Notes are to be issued under an ---------- indenture (the "Indenture") to be dated as of October 15, 1997 by and among the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof--------- Company, the Notes Guarantors and IBJ Xxxxxxxx Bank & Trust Company, as Trustee (the Warrants, and upon exercise of the Warrants "Trustee"). -------- Prior to the issuance and sale of the Warrant SharesNotes, the Company entered into a senior secured revolving credit facility (together with all documents executed in connection therewith, the "Credit Agreement") among the Company, the ---------------- Guarantors and First Union National Bank. The Notes will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in --- reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated October 8, 1997 (the "Preliminary ----------- Memorandum"), and a final offering memorandum dated October 24, 1997 (the "Final ---------- ----- Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein ---------- being referred to as a "Memorandum") setting forth or including a de- ---------- scription of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchaser and its direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights --------- ------------------- Agreement"), pursuant to which the Company has agreed, among other things, to --------- file a registration statement (the "Registration Statement") with the Securities ---------------------- and Exchange Commission (the "Commission") registering the Notes or the Exchange ---------- Notes (as defined in the Registration Rights Agreement) under the Act.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein -------------- contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $95,000,000 aggregate principal amount of $29,995,000 their 10% Senior Subordinated Notes due 2004 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Y) payable on September 30, 2009the "Guarantees", and (Z----- ---------- together with the Notes, the "Securities") bear interest compounded quarterly (based by the Guarantors on a 360-day year of twelve 30-day monthssenior ---------- subordinated basis. The Securities are to be issued under an indenture (the "Indenture") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of September 18, 1997 by and among the Conversion Date Company, the ---------- Guarantors and Norwest Bank Minnesota National Association, as trustee (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, "Trustee"). -------- The Securities will be offered and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance sold to the Noteholders Initial Purchasers without being registered under the Securities Act of 1933, as amended (the Convertible Notes"Securities Act"), and upon conversion thereof, in reliance on exemptions therefrom. --------------- In connection with the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesSecurities, the Company has prepared a preliminary offering memorandum dated August 25, 1997 (the "Preliminary Memorandum"), and the Company will prepare a final offering ----------------------- memorandum dated September 12, 1997 (the "Final Memorandum"; the Preliminary ---------------- Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the ----------- Securities, the terms of the offering of the Securities, a description of the Company and the Company's subsidiaries listed in Schedule 2 attached hereto (the ---------- "Subsidiaries") and any material developments relating to the Company and the ------------ Subsidiaries occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the --------- "Registration Rights Agreement"), pursuant to which the Company and the ------------------------------ Guarantors have agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the ---------------------- "Commission") in order to register the Securities or the Exchange Securities (as ---------- defined in the Registration Rights Agreement) under the Securities Act. Each of the Company and the Guarantors shall have joint and several liability in respect of all obligations hereunder. Each of the Company and the Guarantors hereby acknowledges that this Agreement is the independent and several obligation of each of the Company and the Guarantors and may be enforced against any of the Company or the Guarantors separately, whether or not enforcement of any right or remedy hereunder has been sought against the Company or any other Guarantor. Each of the Company and the Guarantors hereby expressly waives, with respect to any of the amounts owing hereunder by the Company or other Guarantor in respect of the obligations (collectively, the "Other Issuer ------------ Obligations"), diligence, presentment, demand of payment, protest and all ----------- notices whatsoever, and any requirement that the Initial Purchasers exhaust any right, power or remedy or proceed against the Company and/or such other Guarantor under this Agreement, or any other agreement or instrument referred to herein or therein, or against any other person under any other guarantee of, or security for, any of such Other Issuer Obligations.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $115,000,000 aggregate principal amount of $29,995,000 its 10 3/4% Senior Secured Notes due 2006 (or such lower amount determined on a pro-rata basis in collectively, with the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversionGuarantees defined below, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Ythe "Guarantees") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based by the Guarantors on a 360-day year of twelve 30-day monthssenior basis. The notes are to be issued under an indenture (the "Indenture") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of October 23, 1996 by and among the Conversion Date Company and the Guarantors and The Chase Manhattan Bank, as trustee (the "Trustee"). The Notes will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated September 27, 1996 (the "Preliminary Memorandum") and will prepare a final offering memorandum dated October 21, 1996 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and the Guarantors and any material developments relating to the Company and the Guarantors occurring after the date of the most recent historical financial statements included therein. The Initial Purchaser of the Notes and its direct and indirect transferees will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company and the Guarant- ors have agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. (a) The Company has authorized has, by a Subscription Agreement, dated May 9, 1997 (the issuance of its Senior Subordinated Secured Convertible Notes due September 30"Subscription Agreement"), 2009 in among the Company, the Guarantor and the managers named therein (the "Managers"), agreed to issue and sell to the Managers U.S. $70,000,000 aggregate original principal amount of $30,000,000. The Senior its 4-3/4% Convertible Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein Debentures Due 2004 (hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible NotesSecurities", which terms shall also include any notes delivered in exchange or replacement therefor). The Convertible Notes amount of Securities that may be issued hereunder may be increased by agreement among Lehman Brothers International (Europe) (the "Lead Manager"), txx Xxxpany, the Guarantor and the Fiscal Agent, and such additional securities shall be "Securities" hereunder. The due and punctual payment of principal, premium, if any, and interest and Additional Amounts (aas defined in Section 2 of the Securities) be payable on September 30the Securities when and as the same shall become due and payable, 2009 and (b) bear interest compounded quarterly (based whether at maturity, upon redemption or otherwise, are unconditionally guaranteed on a 360-subordinated basis by the Guarantor. Interest on the Securities shall be calculated on the basis of a 360 day year comprised of twelve 30-day months. (b) Pursuant to the Subscription Agreement, the Managers (or their affiliates) may sell the Securities to (i) persons who are not "U.S. Persons" (as such term is defined in Regulation S promulgated by the United States Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the "Securities Act")) in transactions that meet the requirements of Regulation S, (ii) "qualified institutional buyers" (as such term is defined in Rule 144A promulgated by the SEC pursuant to the Securities Act and hereinafter referred to as "QIBs") in reliance on Rule 144A (the Securities that are resold by the Managers pursuant to Rule 144A being hereinafter referred to as the "Rule 144A Securities") and (iii) a limited number of "institutional accredited investors" (within the meaning of Rule 501(a)(1), (2), (3) or (7) promulgated by the SEC pursuant to the Securities Act) ("Institutional Accredited Investors") that, prior to their purchase of any Securities, deliver to the Managers a letter containing certain representations and agreements (the Securities that are resold by the Managers to institutional accredited investors being referred to as the "Accredited Investor Securities"). (c) A portion of the Securities will initially be issued in the form of a temporary global debenture in bearer form PAGE without coupons or conversion rights having endorsed thereon the guarantee of the Guarantor (the "Guarantee"), which will be deposited with a depository in London for Cedel and Euroclear for the accounts of the subscribers of such Securities on the unpaid Closing Date (as defined herein). Upon deposit of the temporary global debenture, Cedel or Euroclear, as the case may be, will credit each subscriber with a principal amount of Securities equal to the principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 for which it has subscribed and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 paid in the aggregate principal amount of $29,995,000 (or such lower the entire issue of Securities less the aggregate principal amount determined on a pro-rata basis of the Rule 144A Securities and Accredited Investor Securities concurrently issued, substantially in the event form of any Exhibit B hereto (the "Regulation S Global Security"). As hereinafter provided, the Regulation S Global Security may subsequently be exchanged for Securities (i) in part conversionprinted definitive form with the Guarantees endorsed thereon either as (a) plus any bearer Securities ("Bearer Securities") in denominations of U.S. $1,000 and U.S. $10,000 and with interest owed coupons attached thereto, representing the semi-annual interest payable thereon, or (b) fully registered Securities ("Registered Regulation S Securities") in arrears denominations of U.S. $1,000 and integral multiples thereof, without coupons, or (ii) if permitted by Cedel or Euroclear, as the case may be, a beneficial interest in the Rule 144A Global Security (as defined below), in accordance with the provisions of Section 3(c). Bearer Securities shall be substantially in the form of Exhibit A hereto, including the coupons set forth therein. Registered Regulation S Securities also shall be substantially in the form of Exhibit A hereto. The Securities which are not Bearer Securities or the Regulation S Global Security are hereinafter collectively referred to as the "Registered Securities." (d) The Rule 144A Securities will initially be issued in the form of a global Security in the aggregate principal amount of the Rule 144A Securities, which Security shall be in substantially the form of Exhibit A hereto, having endorsed thereon a Guarantee, and is hereinafter referred to as the "Rule 144A Global Security." Such Rule 144A Global Security shall be duly executed by the Company and authenticated by the Fiscal Agent (as defined below) as hereinafter provided and will be deposited on the Convertible Notes Closing Date with, or on behalf of, The Depositary Trust Company ("DTC") and registered in the name of Cede & Co., as nominee of DTC. The aggregate principal amount of the Rule 144A Global Security may from time to time be increased or reduced by adjustments made in the Security Register. Transfers of interests in the Rule 144A Global Security will be subject to certain restrictions set forth therein and described in Section 3 hereof. (e) The Accredited Investor Securities will initially be issued in fully registered form in minimum denominations of U.S. $50,000 and integral multiples of U.S. $1,000 in excess thereof, which Securities shall be in substantially the form of Exhibit A hereto, having endorsed thereon a Guarantee, and are hereinafter collectively referred to as "Registered Accredited Investor Securities." Such Registered Accredited Investor Securities shall be in definitive, fully registered certificated PAGE form only and registered in the names of such Institutional Accredited Investors or their nominees. Such Institutional Accredited Investors may not elect to hold Registered Accredited Investor Securities through DTC, Euroclear or Cedel. As provided herein, such Registered Accredited Investor Securities may subsequently be exchanged for Registered Accredited Investor Securities in denominations of $1,000 and integral multiples thereof. The aggregate principal amount of the Registered Accredited Investor Securities may be increased or reduced by adjustments made in the Security Register. Transfers of Registered Accredited Investor Securities will be subject to certain restrictions set forth therein and described in Section 3 hereof. (f) During the period beginning on the Closing Date and ending on the date which is two years (or the then applicable holding period under Rule 144(k) under the Securities Act (or successor provision)) after the later of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" date of original issuance thereof and collectively as the "Notes", last date on which terms shall also include the Company or any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants affiliate of the Company was the owner thereof (or any predecessor), all Rule 144A Securities, all Accredited Investor Securities, all other Registered Securities and all Securities issued upon registration of transfer of or in exchange for such Securities, shall be "Restricted Securities" and shall be subject to the restrictions on transfer in Section 3 hereof; provided, however, that the term "Restricted Securities" shall not include Registered Securities as to which such restrictions on transfer have been terminated in accordance with Section 3(g) hereof. All Restricted Securities shall bear the legend required by Section 3(f) hereof. (g) The Securities will be convertible as provided in Section 4 of the Registered Securities and the Bearer Securities and Section 7 hereof. The Securities may be redeemed by the Company as provided in Section 3 of the Registered Securities and the Bearer Securities and Section 6 hereof. The Securities will be subordinated as provided in Section 7 of the Registered Securities and the Bearer Securities. The Registered Securities, the Bearer Securities and the Regulation S Global Security shall contain such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Agreement and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistent herewith, be determined by the officer of the Company executing such Securities, as evidenced by his execution of such Securities. (h) The Company in issuing the Securities shall use CUSIP numbers, and the Fiscal Agent may use such CUSIP numbers in any notice of redemption with respect to the Securities. The Company shall obtain one CUSIP number for the purchase Rule 144A Securities, one for the Accredited Investor Securities and one for the Registered Regulation S Securities. In addition, the Company shall obtain an ISIN number and a Common Code for the Regulation S Global Security, the Bearer Securities and the Registered Regulation S Securities. PAGE (subject i) Pursuant to adjustment the Subscription Agreement, the Managers (or their affiliates) may sell the Securities to persons who are not persons within the United States or its possessions or "United States persons" as defined in the Internal Revenue Code except as provided for thereinin U.S. Treasury Regulation Section 1.163-5 (c) (2) (i) (D). In compliance with United States tax laws and regulations, Bearer Securities may not be offered or sold during the 40-day period beginning on the Closing Date, or at any time if part of an aggregate a Manager's unsold allotment, to a person who is within the United States or its possessions or to a United States person other than (a) foreign branches of 210.016 United States financial institutions if such institutions agree in writing to comply with the requirements of Section 165(j)(3)(A), (B), or such lower amount determined on a pro-rata basis in the event of any in part conversion(C) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share Internal Revenue Code of $.01 (subject to adjustment)1986, in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009amended, and the regulations thereunder, (Zb) bear interest compounded quarterly United States offices of exempt distributors, or (based on a 360-day year c) United States offices of twelve 30-day monthsinternational organizations or foreign central banks. United States tax laws and regulations also require that Bearer Securities not be delivered within the United States or its possessions. (j) The Company will use its reasonable best efforts to have the Securities approved for listing on the unpaid principal amount thereof plus any interest owed in arrears on Luxembourg Stock Exchange or such other exchange as shall be agreed upon by the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes Managers and the WarrantsCompany, and upon exercise of as soon as practicable after the Warrants the issuance and sale of the Warrant Sharesdate hereof.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $125,000,000 aggregate principal amount of $29,995,000 its 5.25% Senior Notes due 2022 (or such lower amount determined on a pro-rata basis the “New Notes”). The New Notes are to be issued under that certain indenture (the “Indenture”) dated as of February 27, 2014 by and among the Company, the Guarantors and Xxxxx Fargo Bank, National Association, as Trustee (the “Trustee”). The New Notes will have the benefit of the guarantees (the “Guarantees” and, together with the New Notes, the “Securities”) provided for in the event Indenture. The Securities will be offered and sold to the Initial Purchaser without being registered under the Securities Act of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion1933, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock amended (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment“Act”), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable reliance on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in fullexemptions therefrom. The Company has authorized previously issued $600,000,000 in aggregate principal amount of their 5.25% Senior Notes due 2022 under the Indenture (the “Existing Notes”). The New Notes offered by the Company pursuant to this Purchase Agreement constitute an issuance of “Additional Notes” under the Indenture. Except as otherwise described in the Pricing Disclosure Package (as defined below), the New Notes offered by the Company pursuant to the Noteholders of the Convertible Notesthis Purchase Agreement will rate equally with, and upon conversion thereofwill have identical terms to, the Existing Notes and will be treated as a single class of notes for all purposes under the Warrants, and upon exercise of Indenture. In connection with the Warrants the issuance and sale of the Warrant Shares.Securities, the Company has prepared a preliminary offering memorandum dated May 13, 2016 (including the information incorporated by reference therein, the “Preliminary Memorandum”) setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. As used herein, “Pricing Disclosure Pack-

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as Initial Purchaser (the "Convertible NotesOffering", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the $200,000,000 aggregate principal amount of $29,995,000 its 10% Senior Subordinated Notes due 2010 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject . The Notes are to adjustment as provided for therein) of be issued under an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock indenture (the "Warrant SharesIndenture") exercisable at to be dated as of November 27, 2002 by and between the Company and The Bank of New York, as Trustee (the "Trustee"). In connection with the consummation of the Transactions (as defined below), as discussed in the Final Memorandum (as defined herein), BWAY Corporation, a price per share of $.01 Delaware corporation (subject "BWAY"), pursuant to adjustmentan Assumption Agreement by and among BWAY, the Company and BWAY Manufacturing, Inc. (as defined below) (the "Assumption Agreement"), in the form set forth attached to the Escrow Agreement (as Exhibit 2.1(iidefined below), and pursuant to a Supplemental Indenture, in the form attached to the Escrow Agreement, by and among the Trustee, BWAY, the Company and BWAY Manufacturing, Inc. (the "Supplemental Indenture"), will assume the obligations of the Company under the Notes, the Indenture, this Agreement, the Registration Rights Agreement and the Escrow Agreement (as each term is defined herein). Pursuant to the Supplemental Indenture, BWAY Manufacturing, Inc., a Delaware corporation ("BWAY Manufacturing" and together with the Company and BWAY, the "Issuers") attached hereto will also unconditionally guarantee (the "Guarantee") the Notes on a senior subordinated basis in accordance with the applicable terms of the Indenture and, pursuant to the Assumption Agreement, BWAY Manufacturing, will guarantee BWAY's obligations under this Agreement, the Registration Rights Agreement and the Escrow Agreement. The Notes will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated November 8, 2002 (the "Preliminary Memorandum") and a final offering memorandum dated November 21, 2002 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to herein individually as a "Warrant" Memorandum") setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and collectively of BWAY and any material developments relating to the Company or to BWAY occurring after the date of the most recent historical financial statements included therein. The Notes are being sold in connection with (i) the consummation of a merger (the "Merger") of BCO Acquisition, Inc., a Delaware corporation ("BCO Acquisition"), a company which, as of the date hereof, is wholly-owned by affiliates of Xxxxx & Company, L.P. ("Xxxxx"), with and into BWAY, pursuant to an Agreement and Plan of Merger dated as of September 30, 2002 (as the same may be amended, the "Merger Agreement") and (ii) BWAY's tender offer for, and consent solicitation with respect to, up to $100,000,000 aggregate principal amount of its outstanding 10 1/4% Senior Subordinated Notes (the "10 1/4% Senior Subordinated Notes") due 2007 (the "Tender Offer"), pursuant to an offer to purchase by BWAY. The date of consummation of the Merger and execution of the Assumption Agreement and the Supplemental Indenture is referred to as the "WarrantsTransactions Closing Date." On the Transactions Closing Date, BWAY expects to enter into an amended and restated credit agreement (the "Credit Agreement") with Deutsche Bank Trust Company Americas, which terms shall also include any warrants delivered as agent, and certain lenders thereto whereby BWAY will be provided with a $90 million revolving credit facility, subject to borrowing base and other limitations in exchange or replacement therefor)the Credit Agreement. The Notes shall (Y) payable on September 30Offering, 2009the Tender Offer, the Merger and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on related borrowings under the Convertible Note Credit Agreement are collectively referred to as the "Transactions." The Initial Purchaser and its direct and indirect transferees of the Conversion Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company has agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in the Registration Rights Agreement) under the Act. On the Closing Date (as defined in Section 2.23 below), the Company will deposit with The Bank of New York, as escrow agent (the "Escrow Agent") until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on proceeds (the Conversion Date, and at maturity or prior prepayment "Escrowed Funds") of the Notes in full. The Company has authorized the issuance Offering, together with certain other funds made available to the Noteholders Company (the "Escrowed Funds"). Upon the satisfaction of certain conditions as set forth in an escrow agreement to be dated as of the Convertible NotesClosing Date among the Company, the Trustee and upon conversion thereofthe Escrow Agent (the "Escrow Agreement"), including the assumption by BWAY of the Company's obligations under the Notes and the WarrantsIndenture pursuant to the Supplemental Indenture (the "BWAY Assumption"), and upon exercise the portion of the Warrants Escrowed Funds equal to the issuance and sale net proceeds of the Warrant SharesOffering, after giving effect to the payment by the Company of all fees and expenses hereunder, including without limitation under Sections 3(b) and 6 hereof, will be released to BWAY and the balance of the Escrowed Funds will be released to the Company.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the Purchasers an aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall of: (a) be payable on September 30Two Million Eight Hundred Twelve Thousand Five Hundred (2,812,500) shares of its Common Stock (the "Common Stock"), 2009 and (b) bear interest compounded quarterly One Million Four Hundred Six Thousand Two Hundred Fifty (based on a 360-day year of twelve 30-day months1,406,250) on the unpaid principal amount thereof until due at the rate of 12% per annumwarrants, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, substantially in the form set forth as Exhibit 2.1(i) attached hereto at Exhibit A (referred to herein individually as a "Note" and collectively as the "NotesWarrants", which terms shall also include any notes delivered in exchange or replacement therefor), and to acquire up to One Million Four Hundred Six Thousand Two Hundred Fifty (ii) Common Stock Purchase Warrants 1,406,250)shares of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable ). The number of shares of Common Stock and Warrant Shares that any Purchaser may acquire at a price per share of $.01 (any time are subject to adjustmentlimitation so that the aggregate number of shares of Common Stock of which such Purchaser and all persons affiliated with such Purchaser have beneficial ownership (calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended) does not at any time exceed 9.99% of the Company's then outstanding Common Stock. The Common Stock and the Warrants are sometimes herein collectively referred to as the "Securities." This Agreement, Registration Rights Agreement and the Warrant Agreements are sometimes herein collectively referred to as the "Transaction Documents." The Securities will be offered and sold to the Purchasers without such offers and sales being registered under the Securities Act of 1933, as amended (together with the rules and regulations of the Securities and Exchange Commission (the "SEC") promulgated thereunder, the "Securities Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has made available (including electronically via the SEC’s XXXXX system) to Purchasers its periodic and current reports, forms, schedules, proxy statements and other documents (including exhibits and all other information incorporated by reference) filed with the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act") together with a draft registration statement (excluding financial statements) on form set forth SB-2 dated February 6, 2004 (the “Draft SB-2”), as Exhibit 2.1(ii) attached hereto (at Exhibit B. These reports, forms, schedules, statements, documents, filings and amendments, and the Draft SB-2 are collectively referred to herein individually as a "Warrant" and collectively as the "WarrantsDisclosure Documents." All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Disclosure Documents (or other references of like import) shall be deemed to mean and include all such financial statements and schedules, documents, exhibits and other information which terms shall also include any warrants delivered is incorporated by reference in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesDisclosure Documents.

The Securities. Subject to the terms and conditions herein contained, the Issuers propose to issue and sell to each Initial Purchaser, severally and not jointly, the aggregate principal amount of Notes (as defined below) set forth in Schedule A opposite the name of such Initial Purchaser. The Company has authorized 10 ¼% Senior Secured Notes due 2012 (the “Notes”) are to be issued under an indenture (the “Indenture”) to be dated as of May 5, 2004 by and between the Issuers, the guarantors listed on Schedule 1 (the “Guarantors”) and The Bank of New York, as Trustee (the “Trustee”), and will be guaranteed on a senior secured basis by each of the Guarantors (the “Guarantees”). The Notes and the Guarantees are collectively referred to herein as the “Securities.” The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Issuers have prepared a preliminary offering memorandum dated April 21, 2004 (the “Preliminary Memorandum”) and a final offering memorandum dated April 30, 2004 (the “Final Memorandum”; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a “Memorandum”) setting forth or including, among other things, a description of the terms of the Securities and the collateral securing the Securities, the terms of the offering of the Securities, a description of the and any material developments relating to the occurring after the date of the most recent historical financial statements included therein. Concurrently with the issuance of its Senior Subordinated Secured Convertible Notes due the Securities, Wise Alloys LLC and Wise Recycling LLC will enter into an amendment and restatement of the credit agreement dated as of September 3010, 2009 in 2002 among Wise Alloys LLC and Wise Recycling LLC, as borrowers, the aggregate original principal guarantors party thereto from time to time, Congress Financial Corporation, as agent (the “Administrative Agent”) and the lenders (the “Lenders”) party thereto from time to time (the “Credit Agreement”) and will repay a portion of the loans outstanding thereunder. In connection with the foregoing, Wise Alloys LLC and Wise Recycling LLC will also enter into documentation with the Administration Agent providing for the release of certain liens (the “Collateral Release Documents”). Concurrently with the issuance of the Securities, the Company will repay the entire amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 1215% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 3010, 2009 (“Existing Senior Notes”) and accrued and unpaid interest thereon. Furthermore, the Company will repurchase a membership interest of Prudential Capital Partners, L.P., Prudential Capital Partners Management Fund, LP and Prudential Capital Partners—U.S. Fund LP (collectively, “Prudential Capital”) and pay Prudential Capital a prepayment premium relating to the Existing Senior Notes. The Notes will be secured on a first priority basis by liens on certain real property of the Issuers and the Guarantors set forth on Schedule 2 (each, a “Mortgaged Property” and together, the “Mortgaged Properties”) and certain personal property of the Issuers as described in the aggregate principal amount of $29,995,000 Final Memorandum (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor“Primary Collateral”), and documented by mortgages or deeds of trust (iicollectively, the “Mortgages”) Common Stock Purchase Warrants of evidencing the Company for liens on the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in Mortgaged Properties and by the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form security documents set forth as Exhibit 2.1(ii) attached hereto on Schedule 3 evidencing the liens on the Primary Collateral (referred to herein individually as a "Warrant" and collectively as together with the "Warrants"Mortgages, which terms shall also include any warrants delivered in exchange or replacement thereforthe “Primary Collateral Documents”). The Notes shall will also be secured on a second priority basis by liens on certain other assets of the Issuers and the Guarantors as described in the Final Memorandum (Y) payable on September 30the “Secondary Collateral” and, 2009together with the Primary Collateral, the “Pledged Collateral”), and (Z) bear interest compounded quarterly (based documented by the documents set forth on a 360-day year of twelve 30-day months) Schedule 3 evidencing the liens on the unpaid principal amount thereof plus any interest owed in arrears Secondary Collateral (the “Secondary Collateral Documents” and, together with the Primary Collateral Documents, the “Collateral Documents”). The Trustee, on the Convertible Note as behalf of the Conversion Date holders of the Notes, will enter into an intercreditor agreement (the “Intercreditor Agreement”) with the Issuers and with the Agent for the Lenders. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Issuers and the Guarantors have agreed, among other things, to file a registration statement (the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) registering the Notes, the Guarantees or the Exchange Notes and the related guarantees thereof (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $105,000,000 aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible its 10 1/8% Senior Subordinated Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock due 2005 (the "Warrant SharesNOTES") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Ythe "GUARANTEES" and, together with the Notes, the "SECURITIES") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based by each Guarantor on a 360-day year of twelve 30-day monthssenior subordinated basis. The Securities are to be issued under an indenture (the "INDENTURE") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of July 15, 1997 among the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereofCompany, the Notes Guarantors and Norwest Bank, Minnesota, N.A., as Trustee (the Warrants, and upon exercise of the Warrants "TRUSTEE"). Shortly after the issuance and sale of the Warrant SharesSecurities, the Company will terminate its existing senior credit facility and execute a new senior secured revolving credit facility (together with all documents executed in connection therewith, the "CREDIT AGREEMENT") among the Company, its subsidiaries, Bankers Trust Company, as agent, and certain financial institutions party thereto which will provide revolving borrowing availability of up to $75.0 million, subject to a borrowing base. The Securities will be offered and sold to the Initial Purchasers without such offers and sales being registered under the Securities Act of 1933, as amended (the "ACT"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Issuers have prepared a preliminary offering memorandum dated July 2, 1997 (the "PRELIMINARY MEMORANDUM"), and a final offering memorandum dated July 18, 1997 (the "FINAL MEMORANDUM"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "MEMORANDUM") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company and its subsidiaries and any material developments relating to the Company and its subsidiaries occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as EXHIBIT A (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which each of the Issuers has agreed, among other things, to file a registration statement (the "REGISTRATION STATEMENT") with the Securities and Exchange Commission (the "COMMISSION") registering the exchange of the Securities for the Exchange Securities (as defined in the Registration Rights Agreement) or, in certain circumstances, the resale of the Securities under the Act. This Agreement, the Securities, the Indenture and the Registration Rights Agreement are herein collectively referred to as the "OFFERING DOCUMENTS." The issuance of the Securities and the consummation of the other transactions contemplated hereby are herein collectively referred to as the "TRANSACTIONS."

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions contained herein the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $60,000,000 aggregate principal amount of its Floating Rate Convertible Senior Subordinated Notes due 2013 (the “Firm Securities”). The Company also proposes to issue and sell to the Initial Purchasers at Deutsche Bank Securities Inc.’s option an additional $29,995,000 9,000,000 aggregate principal amount of its Floating Rate Convertible Senior Subordinated Notes due 2013 (the “Option Securities” and together with the Firm Securities, the “Securities”) as set forth below. The Securities are convertible into shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”). The shares of Common Stock into which the Securities may be convertible are referred to herein as the “Underlying Securities.” The Securities are to be issued pursuant to the terms of an Indenture dated as of March 18, 2005, between the Company and SunTrust Bank, as Trustee (the “Trustee”). The sale of the Securities and the Underlying Securities will be made without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on exemptions from the registration requirements of the Securities Act. As the Initial Purchasers, you have advised the Company that you will offer and sell the Securities purchased by you hereunder (the “Offering”) in accordance with Section 4 hereof as soon as you deem advisable. In connection with the Offering, the Company has prepared a final offering memorandum, dated March 15, 2005 (the “Final Memorandum”). The Final Memorandum sets forth certain information regarding the Company, the Securities and the Underlying Securities. The Company hereby confirms that it has authorized the use of the Final Memorandum, and any amendment or such lower amount determined on a pro-rata basis supplement thereto, in connection with the event Offering by the Initial Purchasers. Unless stated to the contrary, all references herein to the Final Memorandum are to the Final Memorandum at the date thereof and are not meant to include any amendment or supplement, or any information incorporated by reference therein subsequent to the date thereof and any references herein to the terms “amend,” “amendment” or “supplement” with respect to the Final Memorandum shall be deemed to refer to and include any information filed under the Securities Exchange Act of any in part conversion) plus any interest owed in arrears on 1934, as amended (the Convertible Notes on “Exchange Act”), subsequent to the date of conversionthe Final Memorandum which is incorporated by reference therein. The term “Memorandum” refers to the Final Memorandum. Concurrently with the Offering, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) is also separately offering $290,000,000 in aggregate principal amount of an aggregate of 210.016 (or such lower amount determined on a pro10-rata basis in the event of any in part conversion) of the Company's Common Stock 1/2% Senior Secured Notes due 2013 (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Senior Notes”). The proceeds of the Senior Notes shall (Y) payable on September 30offering along with the proceeds from the sale of the Securities will be used as described in the Final Memorandum under the heading “Use of Proceeds.” In connection with the Offering, 2009the Company also proposes to enter into a Registration Rights Agreement, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of the Conversion Closing Date (as defined in Section 2.23(a) until due at below), between the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, Company and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment Initial Purchasers (the “Registration Rights Agreement”). In consideration of the Notes in full. The Company has authorized the issuance to the Noteholders mutual agreements contained herein and of the Convertible Notes, and upon conversion thereofinterests of the parties in the transactions contemplated hereby, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.parties hereto agree as follows:

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $60,000,000 aggregate principal amount of $29,995,000 its 10-1/2 % Senior Secured Notes due November 1, 2004 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture (Ythe "Indenture") payable dated as of October 14, 1997 between the Company and IBJ Schrxxxx Xxxk & Trust Company, as trustee (the "Trustee"). The Notes will be offered and sold to you without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated September 18, 1997 (the "Preliminary Memorandum") and a final offering memorandum dated October 8, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and any material developments re- lating to the Company occurring after the date of the most recent historical financial statements included therein. The Notes are being offered in connection with the Company's refinancing of certain existing indebtedness, including (i) term loans outstanding under the Loan and Security Agreement dated as of August 30, 20091996 by and between Congress Financial Corporation (Southern)("Congress") and the Company (the "Existing Credit Agreement"), (ii) indebtedness owed to STI Credit Corporation (the "STI Debt") and (Ziii) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as portion of the Conversion Date indebtedness owed to TFH Corp. (the "TFH Debt"). Concurrently with the offering of the Notes, the Company will issue approximately $7,000,000 aggregate liquidation preference of its Class A Preferred Stock and approximately $21,737,000 aggregate liquidation preference of its Class B Preferred Stock for the remainder of the TFH Debt and will enter into an Amended and Restated Loan and Security Agreement with Congress (the "New Credit Agreement") to provide for its on-going working capital needs. The Initial Purchaser and its direct and indirect transferees of the Notes will be entitled to the benefits of a Registration Rights Agreement (the "Registration Rights Agreement"), pursuant to which the Company will agree, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annumAct. This Agreement, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereofthe Exchange Notes, the Private Exchange Notes (as defined in the Registration Rights Agreement), the Indenture, the Security Documents (as defined in the Indenture) and the Warrants, and upon exercise of Registration Rights Agreement are referred to herein as the Warrants the issuance and sale of the Warrant Shares"Operative Documents."

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $50,000,000 aggregate principal amount of $29,995,000 its 11% Senior Secured Notes due 2013, Series A (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture, dated as of February 7, 2003 (Ythe "Indenture"), pursuant to which $300,000,000 of notes of the same series were previously issued, as amended and supplemented by a supplemental indenture (the "First Supplemental Indenture") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of the Conversion Closing Date (as hereinafter defined) between the Company and The Bank of New York, as Trustee (the "Trustee"). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a final offering memorandum dated July 29, 2003 which includes as a part thereof the final prospectus contained in the Company's Registration Statement on Form S-4 (Commission File No. 333-104485) relating to the exchange of the notes originally issued pursuant to the Indenture (collectively, the "Final Memorandum") setting forth or including a description of the terms of the Notes and the collateral securing the Notes, the terms of the offering of the Notes, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Notes will be secured by liens on certain real property of the Company set forth on Schedule 2 (each, a "Mortgaged Property" and together, the "Mortgaged Properties") and certain other assets of the Company as described in the Final Memorandum (the "Pledged Collateral"), and documented by the mortgages (the "Mortgages") evidencing the Liens on the Mortgaged Properties and by the other documents set forth on Schedule 3 evidencing the Liens on the Pledged Collateral (together with the Mortgages, the "Collateral Documents"). The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company has agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized Subject to the issuance terms and conditions herein contained, the Issuers propose to issue and sell to the Initial Purchaser 71,634 units (the "Units"), each Unit consisting of its $1,000 aggregate principal amount at maturity of the Issuers' 12% Senior Subordinated Secured Convertible Discount Notes due 2005 (the "Notes") and one membership unit of the Company (each, a "Membership Unit"). The Notes are to be issued pursuant to the Indenture (the "Indenture"), dated as of September 30, 2009 in 1997, among the aggregate original principal amount of $30,000,000Issuers and Wilmington Trust Company, as trustee (the "Trustee"). The Senior Subordinated Secured Convertible Units, Notes shall be in the form set forth as Exhibit 2.1 attached hereto and Membership Units are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible NotesSecurities." The Securities will be offered and sold to the Initial Purchaser without such offers and sales being registered under the Securities Act of 1933, as amended (together with the rules and regulations of the Securities and Exchange Commission (the "Commission") promulgated thereunder, which the "Securities Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Issuers have prepared a preliminary offering memorandum dated September 17, 1997, the "Preliminary Memorandum") and a final offering memorandum dated September 24, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), each setting forth or including a description of the terms shall also include of the Securities, the terms of the offering of the Securities, a description of the Company and its subsidiaries and any notes delivered in exchange or replacement thereformaterial developments relating to the Company and its subsidiaries occurring after the date of the most recent historical financial statements included therein. The Convertible Notes shall Issuers understand that the Initial Purchaser proposes to make an offering of the Securities only on the terms and in the manner set forth in the Memorandum and Section 9 hereof as soon as the Initial Purchaser deems advisable after this Agreement has been executed and delivered, to persons in the United States whom the Initial Purchaser reasonably believes to be qualified institutional buyers (a"QIBs") as defined in Rule 144A under the Securities Act, as such rule may be payable on September 30amended from time to time ("Rule 144A"), 2009 in transactions under Rule 144A, and to a limited number of institutional "accredited investors" ("Accredited Investors"), as defined in Rule 501(a)(1), (2), (3) and (b7) bear interest compounded quarterly (based on a 360-day year under Regulation D of twelve 30-day months) on the unpaid principal amount thereof until due at Securities Act, in private sales exempt from registration under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003Securities Act, and at maturity or prior prepayment outside the United States to certain persons in reliance on Regulation S under the Securities Act. The Initial Purchaser and its direct and indirect transferees of the Convertible Notes will be entitled to the benefits of the Registration Rights Agreement dated as of the Closing Date among the parties hereto (the "Registration Rights Agreement") pursuant to which the Issuers have agreed, among other things, to file (i) a registration statement (the "Registration Statement") with the Commission registering the Notes or the Exchange Notes (as defined in fullthe Registration Rights Agreement) under the Securities Act or (ii) a shelf registration statement pursuant to Rule 415 under the Securities Act relating to the resale of the Notes by holders thereof or, if applicable, relating to the resale of Private Exchange Notes (as defined in the Registration Rights Agreement) by the Initial Purchaser pursuant to an exchange of the Notes for Private Exchange Notes. The Convertible Notes shall Initial Purchaser and its direct and indirect transferees of the Membership Units will be convertible at any timeentitled to the benefits of a Membership Unitholders Agreement dated as of the Closing Date among the Company, in whole or in partACME Parent (as defined) and the Initial Purchaser (the "Membership Unitholders Agreement"). The Securities, the Indenture, the Pledge Agreement (as defined in the sole discretion Indenture), the Registration Rights Agreement, the Membership Unitholders Agreement and this Agreement are herein collectively referred to as the "Basic Documents". ACME Television Holdings, LLC, a Delaware limited liability company ("ACME Parent"), has entered into an acquisition agreement dated July 29, 1997 (the "St. Louis Acquisition Agreement") pursuant which ACME Television, LLC, a Delaware limited liability company ("ACME Television"), has agreed to acquire (the "St. Louis Acquisition") Station KPLR, St. Louis, Missouri (the "St. Louis Station") and ACME Television has entered into a local marketing agreement with respect to the St. Louis Station (the "St. Louis LMA"). In addition, ACME Television or one of its subsidiaries has entered into (i) an agreement dated August 22, 1997 (the Noteholder thereof"Salt Lake City Acquisition Agreement") to construct and acquire (the "Salt Lake City Acquisition") a new television broadcast station in Salt Lake City, upon such Noteholder's delivery of notice Utah (the "Salt Lake City Station") (each as described in the Final Memorandum), (ii) an agreement dated August 22, 1997 (the "Albuquerque Acquisition Agreement") to construct and acquire (the "Albuquerque Acquisition") a new television broadcast station in Albuquerque, New Mexico (the "Albuquerque Station") (each as described in the Final Memorandum) and (iii) an agreement dated May 28, 1997 (the "Knoxville Acquisition") to upgrade the studio and transmitting capabilities and acquire (the "Knoxville Acquisition") Station XXXX, Knoxville, Tennessee (the "Knoxville Station") (each as described in the Final Memorandum). The St. Louis Acquisition Agreement, the Salt Lake City Acquisition Agreement, the Albuquerque Acquisition Agreement and the Knoxville Acquisition Agreement are collectively referred to herein as the "Acquisition Agreements." The St. Louis Acquisition, the Salt Lake City Acquisition, the Albuquerque Acquisition and the Knoxville Acquisition are collectively referred to herein as the "Acquisitions." The St. Louis Station, the Salt Lake City Station, the Albuquerque Station and the Knoxville Station are collectively referred to herein as the "Acquisition Stations." On the Closing Date, prior to or simultaneously with the closing hereunder, (i) ACME Parent will make a capital contribution to the Company of its intent $21.7 million, which the Company will simultaneously contribute to convert, into the capital of ACME Television (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "NotesParent Equity Contribution", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants ACME Television and ACME Finance Corporation will issue $175,000,000 principal amount at maturity of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a protheir 10-rata basis in the event of any in part conversion) of the Company's Common Stock 7/8% Senior Discount Notes due 2004 (the "Warrant SharesACME Television Offering") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30offer, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance purchase and sale of the Warrant SharesSecurities as contemplated by this Agreement, the consummation of the Revolving Credit Facility and the Capital Lease Facilities (each as defined and described in the Final Memorandum), the Parent Equity Contribution, the ACME Television Offering, the St. Louis LMA and the Acquisitions are collectively referred to herein as the "Transactions."

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the Initial Purchasers $250,000,000 aggregate original principal amount of $30,000,000its 9-1/8% Senior Subordinated Notes due 2007 (the "Notes"). The Senior Subordinated Secured Convertible obligations of the Company under the Indenture (as hereinafter defined) and the Notes shall will be in unconditionally guaranteed (the form set forth "Guarantees"), on a joint and several basis, by each Subsidiary Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), dated June 30, 1997, among the Company, The Bank of New York, a New York corporation, as Exhibit 2.1 attached hereto trustee (the "Trustee"), and the Subsidiary Guarantors. The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible NotesSecurities." The sale of the Securities to the Initial Purchasers (the "Offering") will be made without registration of the Securities under the Securities Act of 1933, which terms shall also include any notes delivered as amended, (the "Act") and the rules and regulations of the Securities and Exchange Commission (the "Commission") thereunder, in exchange or replacement thereforreliance upon the exemption therefrom provided by Section 4(2) of the Act. The Convertible Notes shall (a) Holders of the Securities will have the benefits of a Registration Rights Agreement to be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year dated as of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 1997 among the Issuers and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment the Initial Purchasers (the "Registration Rights Agreement"). In connection with the sale of the Convertible Notes in full. The Convertible Notes shall be convertible at any timeSecurities, in whole the Company has prepared a preliminary offering memorandum dated June 12, 1997 (the "Preliminary Memorandum") and prepared a final offering memorandum dated June 19, 1997 (the "Final Memorandum" and, together with the Preliminary Memorandum, the "Memorandum") setting forth or in part, in the sole discretion including a description of the Noteholder thereofterms of the Securities, upon such Noteholder's delivery the terms of notice the Offering, a description of the Company and any material developments relating to the Company occurring after the date of its intent the most recent financial statements included therein. The Securities are being issued and sold in connection with the acquisition (the "Acquisition") by the Company of Lemmerz Holding GmbH, a limited liability company organized under the laws of the Federal Republic of Germany ("Lemmerz"), pursuant to convertthe Purchase Agreement (the "Acquisition Agreement"), into dated June 6, 1997, among the Company, Cromodora Wheels S.p.A., Lemmerz and the shareholders of Lemmerz, pursuant to which the Company will purchase the capital stock of Lemmerz for (i) Senior Subordinated Secured Notes due September 30, 2009 $200 million in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), cash and (ii) Common Stock Purchase Warrants convertible preferred stock of the Company for the purchase (subject to adjustment as provided for therein) which, following stockholder approval, will automatically convert into 5 million shares of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) newly issued common stock of the Company's Common Stock . The cash portion of the consideration, the refinancing of existing Lemmerz debt, working capital of the Company and the fees and expenses of the Lemmerz Acquisition will be financed with the proceeds from the Offering and borrowings under an amended $740.5 million senior secured term loan facility (the "Warrant SharesCredit Agreement") exercisable at a price per share among the Company, Canadian Imperial Bank of $.01 (subject to adjustment)Commerce, in as administrative agent, Merrxxx Xxxital Corporation, as documentation agent, and the form set forth other financial institutions party thereto, as Exhibit 2.1(ii) attached hereto (lenders. The time of the consummation of the Acquisition is herein referred to herein individually as a "Warrant" and collectively as the "WarrantsEffective Time." In connection with the Acquisition, the Company is soliciting consents from holders of its 11% Senior Subordinated Notes due 2006 (the "Old Notes") to amendments (the "Proposed Amendments") to certain of the provisions in the indenture governing the Old Notes (the "Old Indenture"), which terms shall also include as described in the Consent Solicitation Statement dated June 12, 1997, the related form of Consent and instructions thereto and any warrants delivered in exchange or replacement thereforsupplemental materials attached thereto (the "Consent Solicitation"). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as After receipt of the Conversion Date required consents from the holders of the Old Notes, the Company, the Subsidiary Guarantors parties to the Old Indenture and the trustee under the Old Indenture will enter into a supplemental indenture to give effect to the Proposed Amendments. The Acquisition Agreement and the documents entered into in connection therewith including, without limitation, the agreements attached thereto as exhibits, are herein collectively referred to as the "Acquisition Documents." This Agreement, the Securities, the Exchange Notes (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereofRegistration Rights Agreement), the Private Exchange Notes (as defined in the Registration Rights Agreement), the Registration Rights Agreement and the WarrantsIndenture are herein collectively referred to as the "Offering Documents." The Acquisition Documents, the Offering Documents and upon exercise the Credit Agreement are herein collectively referred to as the "Transaction Documents." The Offering, the Acquisition, the Consent Solicitation and the execution of and borrowing under the Warrants Credit Agreement are collectively referred to as the issuance and sale of the Warrant Shares"Transactions."

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the Initial Purchasers $152,250,000 aggregate original principal amount of $30,000,000its 11 1/4% Senior Subordinated Notes due 2009 (the "Notes"). The Senior Subordinated Secured Convertible obligations of the Company under the Indenture (as hereinafter defined) and the Notes shall will be in unconditionally guaranteed on a senior subordinated basis (the form set forth "Guarantees") and on a joint and several basis, by each Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), dated as Exhibit 2.1 attached hereto of June 16, 1999, among the Company, the Guarantors and IBJ Whitehall Bank & Trust Company, as trustee (the "Trustee"). The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Securities." The Notes will be offered and sold to the Initial Purchasers without such offers and sales being registered under the Securities Act of 1933, as amended (together with the rules and regulations of the Securities and Exchange Commission (the "Commission") promulgated thereunder, the "Securities Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated May 26, 1999 (the "Preliminary Memorandum") and a final offering memorandum dated June 14, 1999 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), each setting forth or including a description of the terms of the Securities, the terms of the offering of the Notes", which terms shall also include a description of the Company and its subsidiaries and any notes delivered in exchange or replacement thereformaterial developments relating to the Company and its subsidiaries occurring after the date of the most recent historical financial statements included therein. The Convertible Issuers understand that the Initial Purchasers propose to make an offering of the Notes shall only on the terms and in the manner set forth in the Memorandum and Section 9 hereof as soon as the Initial Purchasers deem advisable after this Agreement has been executed and delivered, to persons in the United States whom the Initial Purchasers reasonably believe to be qualified institutional buyers ("QIBs") as defined in Rule 144A under the Securities Act, as such rule may be amended from time to time ("Rule 144A"), in transactions under Rule 144A, and to a limited number of institutional "accredited investors" ("Accredited Investors"), as defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of the Securities Act, in private sales exempt from registration under the Securities Act, and outside the United States to certain persons in reliance on Regulation S under the Securities Act. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement dated as of June 16, 1999 among the parties hereto (the "Registration Rights Agreement") pursuant to which the Issuers have agreed, among other things, to file (i) a registration statement (the "Registration Statement") with the Commission registering the Notes or the Exchange Notes (as defined in the Registration Rights Agreement) under the Securities Act or (ii) a shelf registration statement pursuant to Rule 415 under the Securities Act relating to the resale of the Notes by holders thereof or, if applicable, relating to the resale of Private Exchange Notes (as defined in the Registration Rights Agreement) by the Initial Purchasers pursuant to an exchange of the Notes for Private Exchange Notes. The Securities, the Exchange Notes, the Private Exchange Notes (as defined in the Registration Rights Agreement), the Indenture, the Registration Rights Agreement and this Agreement are herein collectively referred to as the "Basic Documents". The Issuers propose to issue the Securities in connection with an overall plan to recapitalize and restructure certain of the indebtedness of Consorcio G Grupo Xxxx, S.A. de C.V. ("Grupo Xxxx") and its subsidiaries, including the Issuers. The recapitalization and restructuring will include the following transactions (collectively, the "Transactions"): (a) be payable on September 30a $175 million investment in MCII Holdings (USA) Inc. ("MCII Holdings") comprised of a $125 million common equity investment and a $50 million investment in the form of senior notes and warrants, 2009 by Xxxxxx Xxxxxxxxxx & Xxxx Fund III L.P., along with affiliates of CIBC (collectively, the "MCII Investors") pursuant to an investment agreement dated June 11, 1999, among the MCII Investors and Grupo Xxxx (the "Investment Agreement"); (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice certain asset transfers pursuant to the Company of its intent to convertInvestment Agreement, into including, among others, (i) MCII Holdings' transfer of its Xxxx Autobuses, S.A. de C.V. ("Autobuses") subsidiary to the Company, (ii) Autobuses' transfer of certain immaterial subsidiaries to Grupo Xxxx, (iii) Autobuses' transfer to Grupo Xxxx of a group of transit buses that are leased to a company affiliated with Grupo Xxxx, together with related lease rights, (iv) Autobuses' cancellation of certain receivables due from Grupo Xxxx and its subsidiaries, and (v) the Company's transfer of its Universal Coach Parts Mexico, S.A. de C.V. subsidiary to Grupo Xxxx; (c) entry into a new senior credit facility among the Company, the Guarantors and certain other subsidiaries of the Company, and a syndicate of lenders including the Canadian Imperial Bank of Commerce, as agent, providing for up to $333 million in term loans and $117 million in revolving loans (the "New Senior Subordinated Secured Notes Credit Facility"); (d) the repayment or redemption of (i) the Company's existing senior credit facilities, (ii) the Company's approximately $100 million of outstanding 9.02% senior notes, (iii) the Company's approximately $40 million of outstanding senior subordinated increasing rate notes due September 301999 and (iv) approximately $16.3 million outstanding under Autobuses' existing credit facility; (e) tenders and consent solicitations by Grupo Xxxx, 2009 in dated May 14, 1999, (collectively, the "Tender Offers") for its $206.5 million aggregate principal amount of senior secured discount notes due 2002 and the $29,995,000 35 million outstanding senior secured guaranteed notes, due 2000, of Xxxx Trucks (or such lower amount determined on USA), L.L.C.; and (f) a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversionfinal distribution to Grupo Xxxx pursuant to a partial redemption distribution for MCII Holdings common stock, in an amount and manner consistent with the form set forth as Exhibit 2.1(i) attached hereto (referred Final Memorandum. The foregoing Transactions are to herein individually as a "Note" be effected pursuant to the Investment Agreement, the New Senior Credit Facility, the Tender Offers and collectively as the "Notes", which terms shall also include each other agreement entered into in connection with any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock foregoing Transactions (the "Warrant SharesTransaction Documents") exercisable at a price per share of $.01 (subject to adjustment). Grupo Xxxx, in the form set forth as Exhibit 2.1(ii) attached hereto (MCII Holdings and Motor Coach Industries International, Inc., are collectively referred to herein individually below as a "Warrant" and collectively as the Issuer Parents"Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $121,500,000 aggregate principal amount of $29,995,000 its 8 7/8% Senior Subordinated Notes due 2012, Series A (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Ythe "Guarantee") payable on September 30a senior subordinated basis by the Guarantor. The Notes and the Guarantee are collectively referred to herein as the "Securities." The Securities are to be issued under an indenture (the "Indenture") to be dated as of February 20, 20092004 by and among the Company, the Guarantor and Xxxxx Fargo Bank, N.A., as Trustee (the "Trustee"). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom; provided that the representations and warranties of the Initial Purchasers contained in Section 8 hereof are true, accurate and complete and the offer and sale of the Securities is conducted in the manner set forth in the Final Memorandum. In connection with the sale of the Securities, the Issuers have prepared a preliminary offering memorandum dated February 2, 2004 (the "Preliminary Memorandum") and a final offering memorandum dated February 12, 2004 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including, among other things, a description of the terms of the Securities, the terms of the offering of the Securities, and a description of the Company and the Guarantor. In connection with the offering of the Securities, the Company, the Guarantor and certain other Subsidiaries (Zas defined below), LaSalle Bank N.A., as agent and the lenders thereunder will enter into an amendment to the Company's existing revolving credit agreement (the "Credit Agreement"). Concurrently with the offering of the Securities, the Company will sell (the "CVC Sale") bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid $19,400,000 aggregate principal amount thereof plus any interest owed in arrears on of its 8% Senior Subordinated Notes due 2012, Series A (the Convertible Note "CVC Notes"), issued under the Indenture, to CVC Capital Funding, LLC. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement to be dated as of the Conversion Closing Date (as defined in Section 2.23 below) until due at (the rate of 12% per annum"Registration Rights Agreement"), payable in cash quarterly in arrears on March 31pursuant to which the Issuers will agree, June 30among other things, September 30to file with the Securities and Exchange Commission (the "Commission"), and December 31 in each year commencing on under the Conversion Datecircumstances set forth therein, and at maturity or prior prepayment (i) a registration statement under the Act (the "Exchange Offer Registration Statement") relating to the notes (the "Exchange Notes," which term includes the related guarantee of the Subsidiary Guarantor) to be offered in exchange (the "Exchange Offer") for the Notes in full. The Company has authorized the issuance and (ii) as and to the Noteholders extent required by the Registration Rights Agreement, to file with the Commission 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 Convertible Notes, and upon conversion thereofto use their best efforts to cause such Registration Statements to be declared effective in accordance with the provisions of the Registration Rights Agreement. This Purchase Agreement (this "Agreement"), the Notes, the Guarantee, the Exchange Notes and related guarantee, the WarrantsPrivate Exchange Notes (as defined in the Registration Rights Agreement) and related guarantee, the Indenture and upon exercise of the Warrants Registration Rights Agreement are hereinafter referred to collectively as the issuance and sale of the Warrant Shares"Operative Documents."

The Securities. The Company has authorized Subject to the issuance terms and conditions herein -------------- contained, the Companies propose to issue and sell to the Initial Purchaser $55,869,000 aggregate principal amount at maturity of its their 12 7/8% Senior Subordinated Secured Convertible Discount Notes due September 302008 (the "Notes"). The obligations of the Companies under ----- the Indenture (as hereinafter defined) and the Notes will be conditionally guaranteed (the "Guarantees") by the Guarantor, 2009 as described in the aggregate original principal amount of $30,000,000Indenture ---------- (as defined below). The Senior Subordinated Secured Convertible Notes shall be in and the form set forth as Exhibit 2.1 attached hereto and Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. Securities." The Convertible Notes shall (a) Securities are to be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice issued pursuant to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of ---------- an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock indenture (the "Warrant SharesIndenture") exercisable at a price per share of $.01 (subject to adjustment), in dated as of August 21, 1998, among the form set forth ---------- Companies, the Guarantor and Bank of Montreal Trust Company, as Exhibit 2.1(ii) attached hereto trustee (referred to herein individually as a "Warrant" and collectively as the "WarrantsTrustee", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be secured by the Pledged Collateral (Yas defined in -------- the Pledge Agreement) payable on September 30, 2009, and pursuant to a pledge agreement (Zthe "Pledge Agreement") bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on to ---------------- be dated the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Closing Date (as defined in Section 2.23 below). The Securities will be offered and sold to the Initial Purchaser without such offers and sales being regis- In connection with the sale of the Securities, the Companies have prepared a preliminary offering memorandum dated July 29, 1998 and a final offering memorandum dated August 17, 1998 (the "Memorandum"), setting forth or ---------- including a descrip tion of the terms of the Securities, the terms of the offering of the Securities, a description of the Companies and the Guarantor and any material developments relating to the Companies and the Guarantor occurring after the date of the most recent historical financial statements included therein. The Companies and the Guarantor understand that the Initial Purchaser proposes to make an offering of the Securities only on the terms and in the manner set forth in the Memorandum and Section 9 hereof as soon as the Initial Purchaser deems advisable after this Agreement has been executed and delivered, to persons in the United States whom the Initial Purchaser reasonably believes to be qualified institutional buyers ("QIBs") until due at as defined in Rule 144A ---- under the rate of 12% per annumAct, payable as such rule may be amended from time to time ("Rule 144A"), in cash quarterly in arrears on March 31, June 30, September 30--------- transactions under Rule 144A, and December 31 in each year commencing on private sales exempt from registration under the Conversion DateAct, and at maturity outside the United States to certain persons in reliance on Regulation S under the Act. The Initial Purchaser and its direct and indirect transferees of the Securities will be entitled to the benefits of a registration rights agreement to be dated the Closing Date among the parties hereto (the "Registration Rights ------------------- Agreement") pursuant to which the Companies and the Guarantor have agreed, among --------- other things, to file (i) a registration statement (the "Registration ------------ Statement") with the Commission registering the Securities or prior prepayment the Exchange Notes (as defined in the Registration Rights Agreement) under the Act or (ii) a shelf registra tion statement pursuant to Rule 415 under the Act relating to the resale of the Securities by holders thereof or, if applicable, relating to the resale of Private Exchange Notes (as defined in the Registration Rights Agreement) by the Initial Purchaser pursuant to an exchange of the Notes in fullfor Private Exchange Notes. The Company has authorized Securities, the issuance Exchange Notes, the Private Exchange Notes, the Indenture, the Registration Rights Agreement, the Pledge Agreement and this Agreement are herein collectively referred to as the "Basic Documents". The --------------- Compa xxxx propose to issue the Notes in connection with the repay ment of certain outstanding indebtedness and the System Acquisition to be effected pursuant to the Noteholders Financing Plan (collec tively, the "Transactions") (together ------------ with each other agreement entered into in connection with any of the Convertible Notes, and upon conversion thereofforegoing, the Notes and "Transaction Documents"). Capitalized terms used herein without definition ----------- --------- have the Warrants, and upon exercise of meanings ascribed to such terms in the Warrants the issuance and sale of the Warrant SharesMemorandum.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 issue and sell to the Initial Purchasers $750,000,000 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible its 9% Senior Subordinated Notes on the date of conversiondue 2008, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock Series A (the "Warrant SharesNOTES" and, together with the guarantee of each Guarantor (the ") exercisable at a price per share of $.01 (subject to adjustmentGUARANTEE"), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "WarrantsSECURITIES", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture (Ythe "INDENTURE") payable on to be dated as of September 30, 20091998 by and among the Company, the Guarantors and The Bank of New York, as trustee (Z) bear interest compounded quarterly the "Trustee"). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (based the "ACT"), in reliance on a 360-day year of twelve 30-day months) on exemptions therefrom. In connection with the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as sale of the Conversion Date Notes, the Company has prepared an offering circular dated September 25, 1998 (as defined in Section 2.2the "OFFERING CIRCULAR") until due at setting forth or including a description of the rate terms of 12% per annumthe Notes, payable in cash quarterly in arrears on March 31the terms of the offering of the Notes, June 30, September 30, a description of the Company and December 31 in each year commencing on any material developments relating to the Conversion Date, Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and at maturity or prior prepayment their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in full. The the form attached hereto as Exhibit A (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company has authorized agreed, among other things, to file with the issuance Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein (i) a registration statement (the "REGISTRATION STATEMENT") under the Act relating to the Noteholders Company's 9% Senior Subordinated Notes due 2008, Series B (the "EXCHANGE NOTES"), to be offered in exchange for the Notes or (ii) a shelf registration statement pursuant to Rule 415 under the Act relating to the resale of the Convertible NotesNotes by holders thereof or, and upon conversion thereofif applicable, relating to the resale of debt securities of the Company substantially identical to the Exchange Notes (the "PRIVATE EXCHANGE NOTES") by the Initial Purchasers pursuant to an exchange of the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Sharesfor Private Exchange Notes.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $25,000,000 aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible its Senior PIK Toggle Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock due 2018 (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Notes”). The Notes shall are to be issued under that certain indenture (Ythe “Indenture”) payable on September 30dated as of April 3, 20092013, by and between the Company and U.S. Bank National Association, as trustee (Z) bear interest compounded quarterly the “Trustee”). The Notes will be issued only in book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company (based on a 360-day year of twelve 30-day months) on the unpaid “DTC”). The Company previously issued $175,000,000 aggregate principal amount thereof plus any interest owed of its Senior PIK Toggle Notes due 2018 under the Indenture (the “Existing Notes”). The Notes constitute an issuance of “Additional Securities” under the Indenture. Except as otherwise described in arrears on the Convertible Note as of the Conversion Date Pricing Disclosure Package (as defined in Section 2.2) until due at below), the rate Notes will have identical terms to the Existing Notes and will be treated as a single class of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30notes for all purposes under the Indenture. The Notes will have the same CUSIP and ISIN numbers as, and December 31 in each year commencing on will trade fungibly with, the Conversion Date, Existing Notes (except that the Notes issued pursuant to Regulation S (as defined below) will trade separately under different CUSIP and ISIN numbers until at maturity or prior prepayment least 40 days after the issue date of the Notes in fullNotes). The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereofThis Agreement, the Notes and the WarrantsIndenture, as entered into by the Company, are hereinafter referred to as the “Transaction Documents.” The Notes will be offered and upon exercise sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the Warrants “Act”), in reliance on exemptions therefrom. In connection with the issuance and sale of the Warrant Shares.Notes, the Company has prepared a preliminary offering memorandum dated May 13, 2013 (including the information incorporated by reference therein, the “Preliminary Memorandum”) setting forth or including a description of the terms of the Notes, the terms

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the Initial Purchasers $500,000,000 aggregate original principal amount of $30,000,000its 8 7/8% Senior Subordinated Notes due 2007 (the "Notes"). The Senior Subordinated Secured Convertible obligations of the Company under the Indenture (as hereinafter defined) and the Notes shall will be in unconditionally guaranteed (the form set forth "Guarantees"), on a joint and several basis, by each Subsidiary Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), dated as Exhibit 2.1 attached hereto of June 23, 1997, among the Company, The Bank of New York, a New York banking corporation, as trustee (the "Trustee"), and the Subsidiary Guarantors. The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Securities." The Notes will be offered and sold to the Initial Purchasers without such offers and sales being registered under the Securities Act of 1933, as amended (together with the rules and regulations of the Commission promulgated thereunder, the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated June 10, 1997 (including the documents incorporated by reference therein, the ", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003Preliminary Memorandum"), and at maturity a final offering memorandum dated June 17, 1997 (including the documents incorporated by reference therein, the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") each setting forth or prior prepayment including a description of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion terms of the Noteholder thereofNotes, upon such Noteholder's delivery the terms of notice the offering of the Notes, a description of the Company and its subsidiaries and any material developments relating to the Company and its subsidiaries occurring after the date of its intent the most recent historical financial statements included therein. The Company and the Subsidiary Guarantors understand that the Initial Purchasers propose to convertmake an offering of the Notes only on the terms and in the manner set forth in the Memorandum and Section 9 hereof as soon as the Initial Purchasers deem advisable after this Agreement has been executed and delivered, into to persons in the United States whom the Initial Purchasers reasonably believe to be qualified institutional buyers ("QIBs") as defined in Rule 144A under the Act, as such rule may be amended from time to time ("Rule 144A"), in transactions under Rule 144A, and to a limited number of institutional "accredited investors" ("Accredited Investors"), as defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of the Act in private sales exempt from registration under the Act, and outside the United States to certain persons in reliance on Regulation S under the Act. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement (the "Registration Rights Agreement"), dated as of June 17, 1997 among the parties hereto pursuant to which the Issuers have agreed, among other things, to file (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock registration statement (the "Warrant SharesRegistration Statement") exercisable at a price per share of $.01 with the Securities and Exchange Commission (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "WarrantsCommission", which terms shall also include any warrants delivered in exchange ) registering the Notes or replacement therefor). The the Exchange Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate Act or (ii) a shelf registration statement pursuant to Rule 415 under the Act relating to the resale of 12% per annumthe Notes, payable by holders thereof or, if applicable, relating to the resale of Private Exchange Notes (as defined in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment Registration Rights Agreement) by the Initial Purchasers pursuant to an exchange of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible for Private Exchange Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the Company of its intent terms and conditions herein contained, the Issuers propose to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $215,000,000 aggregate principal amount of $29,995,000 their 11 1/2% Senior Notes due 2004 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes"). The Notes will be guaranteed (collectively, the "Guarantees") on a senior basis by each of the Company's future Restricted Subsidiaries (as defined in the Indenture) (collectively, the "Subsidiary Guarantors"). The Notes and the Guarantees are collectively referred to herein as the "Securities". The Notes are to be issued under an indenture (the "Indenture") to be dated as of November 14, 1996 by and among the Issuers and IBJ Xxxxxxxx Bank & Trust Company, as Trustee (the "Trustee"). The Securities are being offered in connection with and conditioned upon (i) the Issuers' acquisition of 100% of the capital stock of CGGS Canadian Gas Gathering Systems Inc. ("CGGS"), (ii) the Company's acquisition of the oil and gas producing properties located in the Xxxxxxxx and Happy Fields ("Xxxxxxxx and Happy") (the acquisitions of CGGS and Xxxxxxxx and Happy being collectively referred to herein as the "Pending Acquisitions" and the agreements executed or to be executed by the Issuers in connection with the Pending Acquisitions are collectively referred to herein as the "Acquisition Agreements"), and (iii) the Issuers' entering into a new $40.0 million senior revolving credit facility (the "New Credit Facility"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Issuers have prepared a preliminary offering memorandum dated October 21, 1996 (the "Preliminary Memorandum"), and a final offering memorandum dated November 6, 1996 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Pending Acquisitions and the New Credit Agreement, a description of the Issuers and the Subsidiary Guarantors and any material developments relating to the Issuers and the Subsidiary Guarantors occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement to be dated as of the Closing Date (as defined) (the "Registration Rights Agreement"), pursuant to which terms shall also include any notes delivered the Issuers will 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 Senior Notes due 2004 of the Issuers (the "Exchange Notes") to be offered in exchange or replacement therefor)(the "Exchange Offer") for the Notes, and (ii) Common Stock Purchase Warrants of as and to the Company for extent required by the purchase (subject Registration Rights Agreement, a shelf registration statement pursuant to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in Rule 415 under the event of any in part conversion) of the Company's Common Stock Act (the "Warrant SharesShelf Registration Statement" and, together with the Exchange Offer Registration Statement, the ") exercisable at a price per share of $.01 (subject to adjustmentRegistration Statements"), in relating to the form set forth as Exhibit 2.1(ii) attached hereto resale by certain holders of the Notes, and to use their best efforts to cause such Registration Statements to be declared effective. This Purchase Agreement (this "Agreement"), the Notes, the Guarantees, the Indenture and the Registration Rights Agreement are hereinafter referred to herein individually as a "Warrant" and collectively as the "WarrantsOperative Documents.", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $50,000,000 aggregate principal amount of $29,995,000 its 11 1/4% Senior Secured Notes due 2005, Series A (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Ycollectively, the "Guarantees" and, together with the Notes, the "Securities") payable on by Fabricated Products, Inc., a Delaware corporation ("Fabricated Products"), Doe Run Cayman Ltd., a Cayman Islands company ("Doe Run Cayman"), Doe Run Mining S.R.L., a Peruvian company ("Doe Run Mining") and Doe Run Peru S.R.L., a Peruvian company (collectively with its subsidiaries, "Doe Run Peru") (collectively, the "Guarantors" and, together with the Company, the "Issuers"). The Notes are to be issued under an indenture (the "Indenture") dated as of September 301, 20091998 by and among the Company, the Guarantors, and State Street Bank and Trust Company as Trustee (Zthe "Trustee"). The Notes will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Issuers have prepared a final offering circular dated August 26, 1998 (the "Memorandum") bear interest compounded quarterly (based on setting forth or including a 360-day year description of twelve 30-day months) on the unpaid principal amount thereof plus terms of the Securities, the terms of the offering of the Securities, a description of the Company and the Guarantors and any interest owed in arrears on material developments relating to the Convertible Note Company and the Guarantors occurring after the date of the most recent historical financial statements included therein. The Initial Purchaser and its direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement to be dated as of the Conversion Closing Date (as defined in Section 2.23 below), (the "Registration Rights Agreement"), pursuant to which the Issuers have agreed, among other things, to file a registration statement (the "Registration Statement") until due at with the rate of 12% per annum, payable Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in cash quarterly in arrears on March 31, June 30, September 30, the Registration Rights Agreement) under the Act. The Initial Purchaser and December 31 in each year commencing on the Conversion Date, its direct and at maturity or prior prepayment indirect transferees of the Notes in full. The will also be entitled to the benefits of the Security Agreement to be dated as of the Closing Date (the "Security Agreement") pursuant to which the Company has authorized agreed, among other things to grant a first priority security interest in the issuance to property, plant and equipment of ASARCO Incorporated's ("ASARCO") Missouri Lead Division (the Noteholders "ASARCO MLD") in accordance with the terms of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesIndenture.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $152,000,000 aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible its 11 3/4% Senior Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock due 2012 (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Notes”). The Notes shall are to be issued under an indenture (Ythe “Indenture”) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of May 14, 2004 by and between the Conversion Date Company and The Bank of New York, as Trustee (the “Trustee”). The Notes are being sold in connection with the acquisition (the “Acquisition”) to be consummated pursuant to the Stock Purchase Agreement dated May 14, 2004 (the “Acquisition Agreement”) by and among the Company, the Company’s parent, LD Holdings, Inc. (“Holdings”), the Employee Stock Ownership Plan and Trust for the Employees of Lazydays (the “ESOP”) and certain other stockholders of Holdings and RV Acquisition, Inc., (“RV Acquisition”), a newly formed holding company owned by an affiliate of Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc. (“BRS”), pursuant to which RV Acquisition has agreed to acquire all of Holdings’ outstanding capital stock. The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated April 27, 2004 (the “Preliminary Memorandum”) and a final offering memorandum dated May 12, 2004 (the “Final Memorandum”; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a “Memorandum”) setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Company has agreed, among other things, to file a registration statement (the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the Company of its intent terms and conditions herein contained, the Issuer proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $100,000,000 aggregate principal amount of $29,995,000 its 10 1/4% Senior Subordinated Notes due 2007 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes"). The Notes will be guaranteed (collectively, the "Guarantees") on a senior subordinated basis by each of the Issuer's Subsidiaries listed on the signature pages hereof (collectively, and together with any subsidiary that in the future executes a supplemental indenture pursuant to which such subsidiary agrees to guarantee the Notes, the "Subsidiary Guarantors"). The Notes and the Guarantees are collectively referred to herein as the "Securities". The Securities are to be issued under an indenture (the "Indenture") to be dated as of April 11, 1997 by and among the Issuer, the Subsidiary Guarantors and Xxxxxx Trust and Savings Bank, as Trustee (the "Trustee"). The Securities are being offered in connection with the Issuer's refinancing of existing indebtedness primarily incurred under its senior revolving credit facility dated June 17, 1996 (the "Credit Agreement"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Issuer has prepared a preliminary offering memorandum dated March 21, 1997 (the "Preliminary Memorandum"), and a final offering memorandum dated April 8, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms shall also include of the Securities, the terms of the offering of the Securities, a description of the Credit Agreement, a description of the Issuer and the Subsidiary Guarantors and any notes delivered material development relating to the Issuer and the Subsidiary Guarantors occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement to be dated as of the Closing Date (as defined) (the "Registration Rights Agreement"), pursuant to which the Issuer and the Subsidiary Guarantors will 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 Senior Subordinated Notes due 2007 of the Issuer (the "Exchange Notes") to be offered in exchange or replacement therefor)(the "Exchange Offer") for the Notes, and (ii) Common Stock Purchase Warrants of as and only to the Company for extent required by the purchase (subject Registration Rights Agreement, a shelf registration statement pursuant to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in Rule 415 under the event of any in part conversion) of the Company's Common Stock Act (the "Warrant SharesShelf Registration Statement" and, together with the Exchange Offer Registration Statement, the ") exercisable at a price per share of $.01 (subject to adjustmentRegistration Statements"), in relating to the form set forth resale by certain holders of the Notes, and to use its best efforts to cause (A) the Exchange Offer Registration Statement to be declared effective and (B) as Exhibit 2.1(ii) attached hereto and only to the extent required, the Shelf Registration Statement to be declared effective. This Purchase Agreement (this "Agreement"), the Notes, the Guarantees, the Exchange Notes, the Indenture and the Registration Rights Agreement are hereinafter referred to herein individually as a "Warrant" and collectively as the "WarrantsOperative Documents.", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the Initial Purchaser $100,000,000 aggregate original principal amount of $30,000,000its 9-7/8% Senior Notes due 2008 (the "Notes"). The Senior Subordinated Secured Convertible obligations of the Company under the Indenture (defined below) and the Notes shall will be in unconditionally guaranteed (the form set forth "Guarantees"), on a joint and several basis, by each Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), dated as Exhibit 2.1 attached hereto of June 8, 1998 among the Company, the Guarantors and the Bank of New York, as trustee (the "Trustee"). The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Securities." The Notes will be offered and sold to the Initial Purchaser without such offers and sales being registered under the Securities Act of 1933, as amended (together with the rules and regulations of the Securities and Exchange Commission (the "Commission") promulgated thereunder, the "Securities Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated May 11, 1998 (including the documents annexed thereto, the "Preliminary Memorandum") and a final offering memorandum dated June 3, 1998 (including the documents annexed thereto, the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), each setting forth or including a description of the terms of the Securities, the terms of the offering of the Notes, a description of the Company and its subsidiaries and any material developments relating to the Company and its subsidiaries occurring after the date of the most recent historical financial statements included therein. All references in this Agreement to financial statements and schedules and other information which terms is "contained," "included" or "stated" in any Memorandum (or other references of like import) shall also be deemed to mean and include all such financial statements and schedules and in any notes delivered in exchange or replacement thereforMemorandum. The Convertible Company and the Guarantors understand that the Initial Purchaser proposes to make an offering of the Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) only on the unpaid principal amount terms and in the manner set forth in the Memorandum and Section 9 hereof as soon as the Initial Purchaser deems advisable after this Agreement has been executed and delivered, to persons in the United States whom the Initial Purchaser reasonably believes to be qualified institutional buyers ("QIBs") as defined in Rule 144A under the Securities Act, as such rule may be amended from time to time ("Rule 144A"), in transactions under Rule 144A, and outside the United States to certain persons in reliance on Regulation S under the Securities Act. The Initial Purchaser and its direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement dated as of June 8, 1998 among the parties hereto (the "Registration Rights Agreement") pursuant to which the Issuers have agreed, among other things, to file (i) a registration statement (the "Registration Statement") with the Commission registering the Notes or the Exchange Notes (as defined in the Registration Rights Agreement) under the Securities Act or (ii) a shelf registration statement pursuant to Rule 415 under the Securities Act relating to the resale of the Notes by holders thereof until due or, if applicable, relating to the resale of Private Exchange Notes (as defined in the Registration Rights Agreement) by the Initial Purchaser pursuant to an exchange of the Notes for Private Exchange Notes. The Securities, the Exchange Notes, the Private Exchange Notes, the Indenture, the Registration Rights Agreement and this Agreement are herein collectively referred to as the "Basic Documents". The Issuers propose to issue the Securities contemporaneously with (i) the repayment of $62.7 million of indebtedness outstanding at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 301998 under the Credit Agreement, September 30 dated as of August 16, 1994, by and December 31 in each yearbetween the Company's and certain of its subsidiaries and Mellon Bank, commencing September 30N.A., 2003as agent, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any timelenders named therein, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into as amended (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "NotesExisting Credit Facility", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) repayment of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in $11.0 million note issued to the event of any in part conversion) seller as partial consideration of the Company's Common Stock acquisition of the Company's Fork Creek reserves (the "Warrant SharesFork Creek Note"), (iii) the repayment of $1.4 million of certain other indebtedness of the Company or its subsidiaries, and (iv) the redemption for $3.0 million of outstanding warrants (the "Bank Warrants") exercisable at a price per share to purchase the Company's common stock issued to the lenders in connection with an amendment to the Existing Credit Facility (collectively, the "Transactions"). The Existing Credit Facility, Fork Creek Note, documents governing the indebtedness referred to in clause (iii) of $.01 the preceding sentence, the letter dated May 11, 1998 among the Company and holders of the Bank Warrants regarding valuation of the Bank Warrants and the New Credit Facility (subject to adjustment), in the form set forth as Exhibit 2.1(iidefined below) attached hereto (shall be referred to herein individually as a "Warrant" and collectively as the "WarrantsTransaction Documents". In addition, which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on concurrently with the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as issuance of the Conversion Date Securities the Company and certain of its subsidiaries will enter into a revolving credit facility (the "New Credit Facility") with Mellon Bank, N.A. and Canadian Imperial Bank of Commerce, as defined in Section 2.2) until due at the rate agents, providing for an aggregate amount of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment borrowings of the Notes in full. The Company has authorized the issuance up to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares$40 million.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $155,000,000 aggregate principal amount of $29,995,000 its 11% Senior Notes due 2004 (or such lower amount determined on a pro-rata basis in collectively, with the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversionguarantees defined below, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Ythe "Guarantees") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based by each of the Guarantors on a 360-day year of twelve 30-day monthssenior basis. The Notes are to be issued under an indenture (the "Indenture") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of June 15, 1997 by and among the Conversion Date Company and United States Trust Company, as trustee (the "Trustee"). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated June 16, 1997 (the "Preliminary Memorandum") and will prepare a final offering memorandum dated June 18, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and the Guarantors and any material developments relating to the Company and the Guarantors occurring after the date of the most recent historical financial statements included therein. The Company, the Guarantors and the Initial Purchasers will enter into a Registration Rights Agreement (the "Registration Rights Agreement") prior to or concurrently with the issuance of the Notes. Pursuant to the Registration Rights Agreement, under the circumstances and the terms set forth therein, the Company, the Guarantors will agree to file with the Securities and Exchange Commission (the "Commission"): (i) a registration statement (the "Exchange Offer Registration Statement"), relating to a registered Exchange Offer (as defined in Section 2.2the Registration Rights Agreement) until due at for the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on Notes under the Conversion Date, and at maturity or prior prepayment Act to offer to the holders of the Notes in full. The Company has authorized the issuance opportunity to exchange their Notes for an issue of notes substantially identical to the Noteholders Notes that would be registered under the Act (the "Exchange Notes") (except that (a) interest thereon will accrue from the last date on which interest was paid on the Notes, or if no such interest has been paid, from June 25, 1997, (b) such Notes will not contain any restrictions on transfer, and (c) such Notes will not contain provisions relating to an increase in their interest rate under certain circumstances); or (ii) alternatively, in the event that applicable interpretations of the Convertible Notes, and upon conversion thereof, Commission do not permit the Company to effect the Exchange Offer or do not permit any holder of the Notes and to participate in the WarrantsExchange Offer, and upon exercise a shelf registration statement (the "Shelf Registration Statement") to cover resales of Notes by such holders who satisfy certain conditions relating to, including the Warrants provision of information in connection with the issuance and sale of the Warrant SharesShelf Registration Statement.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as Initial Purchasers (the "Convertible NotesOffering", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the $400,000,000 aggregate principal amount of $29,995,000 its 7-1/4% Senior Notes due 2010 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture (Ythe "Indenture") payable on September 30to be dated as of May 29, 20092003 by and among the Company, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as Trustee (Zthe "Trustee"). Thx Xxxes will be unconditionally guaranteed (the "Guarantees") bear interest compounded quarterly (based on a 360-day year senior subordinated basis by each of twelve 30-day monthsthe Subsidiary Guarantors and, unless the context otherwise requires, any reference to the Notes shall include a reference to the related Guarantees. The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared an offering memorandum dated May 14, 2003 (including the information incorporated by reference therein, the "Offering Memorandum") on setting forth or including a description of the unpaid principal amount thereof plus terms of the Notes, the terms of the offering of the Notes, a description of the Company and any interest owed in arrears on material developments relating to the Convertible Note Company occurring after the date of the most recent historical financial statements included therein. Concurrently with the sale of the Notes, the Company, DHM Holding Company, Inc., a Delaware corporation ("Holdings") and Solvest, Ltd. ("Solvest") will enter into an amendment (the "Amendment") to its existing senior secured credit facility (the "Senior Credit Facility") dated as of March 28, 2003 by and among the Conversion Date Company, the agents named therein and the lenders party thereto from time to time to, among other things, permit the issue and sale of the Notes. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company and the Subsidiary Guarantors will agree, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized proposes to issue and sell to the issuance Initial Purchasers 225,000 Units (the "Units") consisting of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the $225,000,000 aggregate original principal amount of its 12 3/4% Senior Subordinated Notes due 2010 (the "Notes") and Warrants (the "Warrants") to purchase 425,060 shares of the Company's Class E Common Stock, par value $30,000,0000.01 per share (the "Warrant Shares"), determined on a fully diluted basis as of the Closing Date (as defined herein). The Senior Subordinated Secured Convertible Notes shall will be unconditionally guaranteed (the "Guarantee") on a senior subordinated basis by the Guarantor. The Units, the Notes, the Guarantee and the Warrants are collectively referred to herein as the "Initial Securities." The Initial Securities and the Warrant Shares are collectively referred to herein as the "Securities." The Notes and Guarantee are to be issued under an indenture (the "Indenture") to be dated as of the Closing Date by and among the Company, the Guarantor and The Bank of New York, as Trustee (the "Trustee"). The Warrants will be issued pursuant to a warrant agreement (the "Warrant Agreement") to be dated as of the Closing Date by and between the Company and The Bank of New York, as warrant agent (the "Warrant Agent"). The Units will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Units, the Company has prepared a preliminary offering memorandum dated April 17, 2000 (the "Preliminary Memorandum") and a final offering memorandum dated May 5, 2000 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Units, the terms of the offering of the Units, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Notes and Guarantee will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company and the Guarantor will agree, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes and/or the Exchange Notes (as defined in the Registration Rights Agreement) under the Act. 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 the Company and the Initial Purchasers to be dated as Exhibit 2.1 attached hereto of the Closing Date, and in form and substance satisfactory to the Initial Purchasers and conforming to the description thereof in the Final Memorandum. This Agreement, the Securities, the Exchange Notes, the Indenture, the Registration Rights Agreement, the Warrant Agreement and the Warrant Registration Rights Agreement are herein hereinafter sometimes referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered Unit Documents." The Units are being sold in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into connection with (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount consummation of $29,995,000 a merger (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "NotesMerger") of Saturn Acquisition Corporation with and into the Company, which terms shall also include any notes delivered in exchange or replacement thereforpursuant to an Agreement and Plan of Merger dated as of December 27, 1999 (the "Merger Agreement"), and (ii) Common Stock Purchase Warrants the repayment of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) all of the Company's Common Stock existing debt (the "Warrant SharesDebt Refinancing"). In addition, the Company will (i) enter into a credit agreement (the "Credit Agreement") exercisable at with The Chase Manhattan Bank, as administrative agent, and certain lenders thereto whereby the Company will borrow $485 million in term loans in connection with the Merger and related transactions and have available a price per share $150 million revolving credit facility and (ii) issue and sell redeemable preferred stock and warrants to purchase common stock of the Company, for aggregate gross proceeds of $.01 60 million (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "WarrantsPreferred Stock Investment", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30offering of the Units, 2009the Merger, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) the Debt Refinancing, the borrowings under the Credit Agreement on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Closing Date (as defined below) and the Preferred Stock Investment are collectively referred to as the "Recapitalization." The Unit Documents, the Credit Agreement and the Credit Documents (as defined in Section 2.2) until due at the rate Credit Agreement), the Merger Agreement and the certificate of 12% per annumdesignation, payable in cash quarterly in arrears on March 31warrant agreement, June 30purchase agreement, September 30, preferred stock registration rights agreement and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance common stock registration rights agreement relating to the Noteholders of Preferred Stock Investment (the Convertible Notes, and upon conversion thereof, "Preferred Stock Investment Documents") are collectively referred to herein as the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares"Recapitalization Documents."

The Securities. The Subject to the terms and conditions -------------- herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the Initial Purchasers $200,000,000 aggregate original principal amount of $30,000,000its 10 1/4% Senior Subordinated Notes due 2007 (the "Notes"). The Senior Subordinated Secured Convertible obligations of the Company under the Indenture (as hereinafter defined) and the Notes shall will be in unconditionally guaranteed on a senior subordinated basis (the form set forth "Guarantees"), on a joint and several basis, by each Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), dated as Exhibit 2.1 attached hereto of October 23, 1997, among the Company, the Guarantors and United States Trust Company of New York, as trustee (the "Trustee"). The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Notes"Securities." The Notes will be offered and sold to the Initial Purchasers under the Securities Act of 1933, which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall as amended (a) be payable on September 30, 2009 together with the rules and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment regulations of the Convertible Notes in full. The Convertible Notes shall be convertible at any timeSecurities and Exchange Commission (the "Commission") promulgated thereunder, the "Securities Act"), in whole or in part, in reliance on exemptions therefrom. In connection with the sole discretion sale of the Noteholder thereofNotes, upon such Noteholder's delivery the Company has prepared a preliminary offering memorandum dated September 29, 1997 (the "Preliminary Memorandum") and a final offering memorandum dated October 17, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), each setting forth or including a description of notice the terms of the Securities, the terms of the offering of the Notes, a description of the Company and its subsidiaries and Lil' Champ Food Stores, Inc., a Florida corporation ("Lil' Champ") and any material developments relating to the Company and its subsidiaries and Lil' Champ occurring after the date of its intent the most recent historical financial statements included therein. The Company and the Guarantors understand that the Initial Purchasers propose to convertmake an offering of the Notes only on the terms and in the manner set forth in the Memorandum and Section 9 hereof as soon as the Initial Purchasers deem advisable after this Agreement has been executed and delivered, into to persons in the United States whom the Initial Purchasers reasonably believe to be qualified institutional buyers ("QIBs") as defined in Rule 144A under the Securities Act, as such rule may be amended from time to time ("Rule 144A"), in transactions under Rule 144A, and outside the United States to certain persons in reliance on Regulation S under the Securities Act. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of a Registration Rights Agreement substantially in the form attached hereto as Annex A among the parties hereto (the "Registration Rights Agreement") pursuant to which the Issuers have agreed, among other things, to file (i) Senior Subordinated Secured a registration statement (the "Registration Statement") with the Commission registering the Notes due September 30, 2009 or the Exchange Notes (as defined in the aggregate principal amount Registration Rights Agreement) under the Securities Act or (ii) a shelf registration statement pursuant to Rule 415 under the Securities Act relating to the resale of $29,995,000 the Notes by holders thereof or, if applicable, relating to the resale of Private Exchange Notes (or such lower amount determined on a pro-rata basis as defined in the event Registration Rights Agreement) by the Initial Purchasers pursuant to an exchange of any in part conversion) plus any interest owed in arrears on the Convertible Notes on for Private Exchange Notes. The Securities, the date of conversionExchange Notes, in the form set forth as Exhibit 2.1(i) attached hereto (Private Exchange Notes, the Indenture, the Registration Rights Agreement and this Agreement are herein collectively referred to herein individually as a "Note" and collectively as the "NotesBasic Documents." The Issuers propose to issue the Securities in connection with the consummation of certain related transaction including (i) the acquisition (the ", which terms shall also include any notes delivered in exchange or replacement therefor), Lil' Champ Acquisition") by the Company of Lil' Champ and (ii) Common Stock Purchase Warrants an equity investment in the Company of $32.4 million by certain existing stockholders and management of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant SharesEquity Investment") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall In addition, the Company is (Yi) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on entering into a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date New Credit Facility (as defined in Section 2.2the Final Memorandum) until due at and (ii) conducting a tender offer (the rate of "Tender Offer") and consent solicitation (the "Consent Solicitation") with respect to its 12% per annumSeries B Senior Notes due 2000 (the "Senior Notes"). The Lil' Champ Acquisition, payable in cash quarterly in arrears on March 31the Equity Investment, June 30the New Credit Facility, September 30the Tender Offer and the Consent Solicitation are collectively referred to herein as the "Transactions" and the stock purchase agreement relating to the Lil' Champ Acquisition, the stock purchase agreement relating to the Equity Investment, the New Credit Facility and December 31 in each year commencing on the Conversion Datesupplemental indenture relating to the consent solicitation are collectively referred to as the "Transaction Documents". At the time the Lil' Champ Acquisition is consummated (the "Effective Time"), and at maturity or prior prepayment which shall occur simultaneously with the consummation of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesSecurities, Lil' Champ will become a wholly owned subsidiary of the Company and will execute and deliver this Agreement and the Guarantees and become subject to all of the provisions of this Agreement and the Guarantees as a Guarantor.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $100,000,000 aggregate principal amount of its 9 1/8% Senior Subordinated Notes due 2008 (the "Fixed Rate Notes") and $29,995,000 50,000,000 aggregate principal amount of its Floating Interest Rate Subordinated Term Securities due 2008 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on "Floating Rate Notes" and, together with the Convertible Notes on the date of conversionFixed Rate Notes, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes"). The Notes are to be issued under an indenture (the "Indenture") to be dated as of April 24, 1998 by and between the Company, the Guarantors and United States Trust Company of New York, as Trustee (the "Trustee"). The Notes will be guaranteed (collectively, the "Guarantees") on an unsecured senior subordinated basis by each of the Company's domestic subsidiaries listed on the signature pages hereof (collectively, and together with any subsidiary that in the future executes a supplemental indenture pursuant to which terms shall also include any notes delivered in exchange or replacement thereforsuch subsidiary agrees to guarantee the Notes, the "Guarantors"). The Notes and the Guarantees are collectively referred to herein as the "Securities." The Company and the Guarantors are collectively referred to herein as the "Issuers". The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated March 31, 1998 (the "Preliminary Memorandum"), and a final offering memorandum dated April 17, 1998 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company, a description of the Recapitalization (as defined below) and any material developments relating to the Company occurring after the date The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Issuers have agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Securities or the Exchange Notes (as defined in the Registration Rights Agreement) under the Act. As described in the Preliminary Memorandum and the Final Memorandum, the offering of the Notes is part of an over-all recapitalization of the Company (the "Recapitalization"), pursuant to which the Company has entered into a recapitalization agreement (the "Recapitalization Agreement"), dated as of March 6 1998, whereby a Delaware corporation formed by the Thomxx X. Xxx Xxxpany ("THL Co.") will merge with and into the Company (the "Merger"). Upon consummation of the Merger, THL Fund IV, L.P. and other affiliates of THL Co. (together, "THL") will own approximately 90.1% of the issued and outstanding shares of Common Stock of the Company (the "Common Stock"), existing shareholders (including management) of the Company will retain approximately 7.3% of the issued and outstanding Common Stock and management will purchase additional shares representing approximately 2.6% of the issued and outstanding Common Stock. In connection with the Recapitalization, (i) the Company and the Guarantors will enter into a new credit facility (the "New Credit Facility") with Bankers Trust New York Corporation, as administrative agent, and Merrxxx Xxxcx Xxxital Corporation, as syndication agent, providing for a $55.0 million term loan facility, a $35.0 million revolving credit facility, and a $100.0 million acquisition facility and (ii) the Company will receive up to $99.1 million (the "Equity Contribution") from the sale of capital stock to THL, Bernxxx X. Xxxxxxx xxx other members of management consisting of (i) approximately $71.4 million from the sale of Common Stock Purchase Warrants and (ii) approximately $27.8 million from the sale of New Preferred Stock of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant SharesNew Preferred Stock") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $90,000,000 aggregate principal amount of $29,995,000 the Company's 10 1/8% Senior Subordinated Notes due 2007 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes"). The Notes will be guaranteed (collectively, which terms shall also include any notes delivered in exchange or replacement therefor), and (iithe "Guarantees") Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata senior subordinated basis in the event of any in part conversion) by each of the Company's Common Stock Subsidiaries listed on the signature pages hereof (collectively, and together with any subsidiary that in the future executes a supplemental indenture pursuant to which such subsidiary agrees to guarantee the Notes, the "Warrant SharesGuarantors") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall and the Guarantees are collectively referred to herein as the "Securities". The Securities are to be issued under an indenture (Ythe "Indenture") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note dated as of July 24 1997 by and among the Conversion Date Company, the Guarantors and IBJ Schrxxxx Xxxk & Trust Company, as trustee (the "Trustee"). The Securities are being offering in connection with the Company's acquisition of the assets of the Air Restraints and Industrial Fabrics Division of JPS Automotive L.P. ("JPS") pursuant to an asset purchase agreement, dated as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on 1997 (the Conversion Date, and at maturity or prior prepayment of the Notes in full"JPS Acquisition"). The Company has authorized Securities will be offered and sold to you without being registered under the issuance to Securities Act of 1933, as amended (the Noteholders of "Act"), in reliance on exemptions therefrom. In connection with the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesSecurities, the Company has prepared a preliminary offering memorandum dated July 1, 1997 (the "Preliminary Memorandum") and a final offering memorandum dated July 21, 1997 (the "Final Memorandum," the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein.

The Securities. Form, Dating and Terms. The Initial Notes are being offered and sold by the Company has authorized pursuant to a Purchase Agreement, dated December 11, 2001, among J.P. Morgan Securities Inc., Credit Suisse First Boston Corporation, Xxxxxxxx Xxnc Alex. Brown Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and TD Xxxxrities (XXX) Xnc., as initial xxxxxxserx (xxllectively, the issuance of its Senior Subordinated Secured Convertible "Initial Purchasers"), the Company and the Guarantors. The Initial Notes due September 30, 2009 issued on the date hereof will be in the an aggregate original principal amount of $30,000,000500,000,000. In addition, the Company may issue, from time to time in accordance with the provisions of this Indenture, Additional Notes. The Senior Subordinated Secured Convertible Initial Notes shall and Additional Notes will be resold initially only to (A) QIBs in reliance on Rule 144A under the Securities Act ("Rule 144A") and (B) Non-U.S. Persons in reliance on Regulation S under the Securities Act ("Regulation S"). Such Initial Notes and Additional Notes may thereafter be transferred to, among others, QIBs, Non-U.S. Persons and institutional "accredited investors" (as defined in Rules 501(a)(1), (2), (3) and (7) under the Securities Act who are not QIBs ("IAIs")) in accordance with the procedures set forth herein. Initial Notes and Additional Notes offered and sold to QIBs in the United States in reliance on Rule 144A (each, a "Rule 144A Note") will be issued in the form of a global Note, without interest coupons, substantially in the form of Exhibit A hereto, which is hereby incorporated by reference and made a part of this Indenture, including appropriate legends as set forth in Section 2.1(c) hereof (a "Rule 144A Global Note"), deposited with DTC (or to or for the benefit of its nominee), duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Rule 144A Global Notes representing the Initial Notes or Additional Notes may be represented by more than one certificate, if so required by DTC's rules regarding the maximum principal amount to be represented by a single certificate. The aggregate principal amount of the Rule 144A Global Note may from time to time be increased or decreased by adjustments made on the records of DTC as hereinafter provided. Initial Notes and Additional Notes offered and sold outside the United States in reliance on Regulation S (each, a "Regulation S Note") will be issued in the form of a global Note, without interest coupons, substantially in the form set forth in Exhibit A hereto, including appropriate legends as Exhibit 2.1 attached hereto and are herein referred to individually as set forth in Section 2.1(b) hereof (a "Convertible Regulation S Global Note" "), deposited with DTC (or to or for the benefit of its nominee), duly executed by the Company and collectively authenticated by the Trustee as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement thereforhereinafter provided. The Convertible Regulation S Global Notes shall (a) representing the Initial Notes or Additional Notes may be payable on September 30represented by more than one certificate, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on if so required by DTC's rules regarding the unpaid maximum principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in fullto be represented by a single certificate. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (the Regulation S Global Note may from time to time be increased or such lower amount determined decreased by adjustments made on a pro-rata basis the records of DTC as hereinafter provided. Notes that may be resold to IAIs in the event United States (each, an "IAI Note"), will be issued in the form of any in part conversion) plus any definitive fully registered Notes, without interest owed in arrears on the Convertible Notes on the date of conversioncoupons, substantially in the form set forth in Exhibit A hereto, including appropriate legends as set forth in Section 2.1(b) hereof, duly executed by the Company and authenticated by the Trustee as hereinafter provided and delivered to the respective IAIs. Exchange Notes exchanged for interests in the Rule 144A Note, the Regulation S Note and the IAI Note, if any, will be issued in the form of a permanent global Note substantially in the form of Exhibit 2.1(iB hereto, which is hereby incorporated by reference and made a part of this Indenture, deposited with DTC (or to or for the benefit of its nominee), as hereinafter provided, including the appropriate legend set forth in Section 2.1(b)(B) attached hereto hereof (each, an "Exchange Global Note"). The Exchange Global Notes may be represented by more than one certificate, if so required by DTC's rules regarding the maximum principal amount to be represented by a single certificate. The aggregate amount of the Exchange Global Note may from time to time be increased or decreased by adjustments made on the records of DTC as hereinafter provided. Each Rule 144A Global Note, each Regulation S Global Note and each Exchange Global Note are sometimes collectively herein referred to herein individually as a "Note" and collectively as the "Global Notes.", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the Initial Purchasers $150,000,000 aggregate original principal amount of $30,000,000its 9 1/8% Senior Subordinated Notes due 2007 (the "Notes"). The Senior Subordinated Secured Convertible obligations of the Company under the Indenture (as hereinafter defined) and the Notes shall will be in unconditionally guaranteed (the form set forth "Guarantees"), on a joint and several basis, by each Subsidiary Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), dated July 15, 1997, among the Company, The Bank of New York, a New York corporation, as Exhibit 2.1 attached hereto trustee (the "Trustee"), and the Subsidiary Guarantors. The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. Securities." The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment sale of the Convertible Notes in full. The Convertible Notes shall Securities to the Initial Purchasers (the "Offering") will be convertible at any timemade without registration of the Securities under the Securities Act of 1933, as amended, (the "Act") and the rules and regulations of the Securities and Exchange Commission (the "Commission") thereunder, in whole or in part, in reliance upon the sole discretion exemption therefrom provided by Section 4(2) of the Noteholder thereofAct. Holders of the Securities will have the benefits of a Registration Rights Agreement to be dated as of July 15, upon such Noteholder's delivery 1997 among the Issuers and the Initial Purchasers (the "Registration Rights Agreement"). In connection with the sale of notice the Securities, the Company has prepared an offering memorandum dated July 16, 1997 (the "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the Offering, a description of the Company and any material developments relating to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on occurring after the date of conversion, the most recent financial statements included therein. The Securities are being issued and sold in connection with the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants repayment of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of certain indebtedness outstanding under the Company's Common Stock senior secured term loan facility (as amended, the "Warrant SharesAmended Credit Agreement") exercisable at a price per share among the Company, Canadian Imperial Bank of $.01 (subject to adjustment)Commerce, in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually administrative agent, Merrxxx Xxxital Corporation, as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009documentation agent, and (Z) bear interest compounded quarterly (based the other financial institutions party thereto, as lenders which will be further amended on a 360-day year of twelve 30-day months) on or prior to the unpaid principal amount thereof plus any interest owed in arrears on closing date. This Agreement, the Convertible Note as of Securities, the Conversion Date Exchange Notes (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereofRegistration Rights Agreement), the Private Exchange Notes (as defined in the Registration Rights Agreement), the Registration Rights Agreement and the Warrants, and upon exercise of Indenture are herein collectively referred to as the Warrants the issuance and sale of the Warrant Shares"Offering Documents."

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $150,000,000 aggregate principal amount of $29,995,000 its 4.50% Notes due 2009 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be unconditionally guaranteed (Ycollectively, the "Guarantees") payable on September 30jointly and severally, 2009, by the Guarantors. Each of the Guarantors is a direct or indirect subsidiary of the Company. The Notes and the Guarantees are collectively referred to herein as the "Securities." The Notes are to be issued under an indenture (Zthe "Indenture") bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of October 15, 2004 by and among the Conversion Date Company, the Guarantors and LaSalle National Bank, as trustee (the "Trustee"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company and the Guarantors have prepared a final offering memorandum, dated October 12, 2004 (the "Memorandum") setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Guarantees, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. Any reference herein to the Memorandum shall be deemed to refer to and include the documents incorporated by reference therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit B (the "Registration Rights Agreement"), pursuant to which the Company and the Guarantors will agree, among other things, to file a registration statement with the Securities and Exchange Commission (the "Commission") registering the Securities or the Exchange Notes (each as defined in the Registration Rights Agreement) under the Act. This Agreement, the Notes, the Guarantees, the Exchange Notes, the Private Exchange Notes (as defined in Section 2.2) until due at the rate of 12% per annumRegistration Rights Agreement), payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment guarantees of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Exchange Notes and the WarrantsPrivate Exchange Notes, the Indenture and upon exercise of the Warrants Registration Rights Agreement are referred to herein as the issuance and sale of the Warrant Shares"Offering Agreements."

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $60,000,000 aggregate principal amount of $29,995,000 its 7% Senior Notes due 2014 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be unconditionally guaranteed (Ythe "Guarantees") payable on a senior basis by the Subsidiary Guarantors. The Notes and the Guarantees are collectively referred to herein as the "Securities." The Securities are to be issued under an indenture (the "Indenture") dated as of March 22, 2004 by and among the Company, the Subsidiary Guarantors and U.S. Bank National Association, as Trustee (the "Trustee"), as amended by that certain Supplemental Indenture dated as of July 20, 2004 by and among the Company, the Subsidiary Guarantors and the Trustee. The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a final offering memorandum dated as of October 29, 2004 (the "Memorandum"), substantially in the form of and not otherwise materially different from the offering memorandum dated March 15, 2004, as modified to reflect the financial and other information contained in the Form 10-Q’s dated May 4, 2004 and August 4, 2004 and the Form 8-K dated October 26, 2004, in each case, as filed by the Company with the Commission (as defined below) and setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Form 10-Q for the quarter ended September 30, 20092004 will contain the Company’s nine months ended financial statements, which shall not in substance be materially different from nine months ended financial statements contained in the the Company’s Form 8-K dated October 26, 2004. Any reference herein to the Memorandum shall be deemed to refer to and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on include the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as documents incorporated by reference therein. The Initial Purchasers and their direct and indirect transferees of the Conversion Date Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company and the Subsidiary Guarantors have agreed, among other things, to use their best efforts to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Securities or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $100,000,000 aggregate principal amount of $29,995,000 its 9 3/8% Senior Notes due 2006 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Ycollectively, the "Guarantees") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year senior basis by each of twelve 30-day monthsthe Guarantors. The Notes and the Guarantees are collectively referred to herein as the "Securities". The Notes are to be issued under an indenture (the "Indenture") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of October 15, 1996 by and among the Conversion Date Company, the Guarantors and Wilmington Trust Company, as Trustee (the "Trustee"). The Company and CPG Acquisition Company ("Merger Sub"), have entered into a Merger Agreement (the "Merger Agreement") dated as of August 28, 1996, pursuant to which Merger Sub will be merged (the "Merger") with and into CPG Investors Inc., a Delaware corporation ("CPG"). The Company has entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") dated as of August 28, 1996, pursuant to which the Company has agreed to purchase all of the outstanding capital stock of Arcon Holdings Corp., a Delaware corporation ("Arcon"). The acquisition of the outstanding capital stock of Arcon and the Merger are referred to herein together as the "Acquisitions." The Merger Agreement and the Stock Purchase Agreement are referred to herein together as the "Acquisition Agreements." The Securities will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Issuers have prepared a preliminary offering memorandum dated September 19, 1996 (the "Preliminary Memorandum"), a preliminary offering memorandum supplement dated October 2, 1996 (the "Supplement") and a final offering memorandum dated October 4, 1996 (the "Final Memorandum"; the Preliminary Memorandum, the Supplement and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company, CPG, Arcon and their respective subsidiaries and any material developments relating to the Company, CPG, Arcon and their respective subsidiaries occurring after the date of the most recent historical financial statements included therein. The Initial Purchaser and its direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Issuers have agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Securities or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at and related guarantees under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $110,000,000 aggregate principal amount of $29,995,000 its 12% Senior Notes due 2007 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture (Ythe "Indenture") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of November 26, 1997, by and among the Conversion Date Company and Wilmington Trust Company, as trustee (the "Trustee"). The Notes will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated November 1, 1997 (the "Preliminary Memorandum") and will prepare a final offering memorandum dated November 19, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as the "Memorandum") setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Company and the Initial Purchaser will enter into a Registration Rights Agreement (the "Registration Rights Agreement") prior to or concurrently with the issuance of the Notes. Pursuant to the Registration Rights Agreement, under the circumstances and the terms set forth therein, the Company will agree to file with the Securities and Exchange Commission (the "Commission"): (i) a registration statement on Form S-4 (the "Exchange Offer Registration Statement") relating to a registered Exchange Offer (as defined in Section 2.2the Registration Rights Agreement) until due at for the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on Notes under the Conversion Date, and at maturity or prior prepayment Act to offer to the holders of the Notes in full. The Company has authorized the issuance opportunity to exchange their Notes for an issue of notes substantially identical to the Noteholders Notes (except that (a) interest thereon will accrue from the last date on which interest was paid on the Notes, or if no such interest has been paid, from November 26, 1997, (b) such Notes will not contain restrictions on transfer, and (c) such Notes will not contain provisions relating to an increase in their interest rate under certain circumstances) that would be registered under the Act (the "Exchange Notes"); or (ii) alternatively, in the event that applicable interpretations of the Convertible Notes, and upon conversion thereof, Commission do not permit the Company to effect the Exchange Offer or do not permit any holder of the Notes and to participate in the WarrantsExchange Offer, and upon exercise a shelf registration statement (the "Shelf Registration Statement") to cover resales of Notes by such holders who satisfy certain conditions relating to, including the Warrants provision of information in connection with the issuance and sale of the Warrant SharesShelf Registration Statement.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 issue and sell to the Initial Purchasers $750,000,000 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible its 8% Senior Notes on the date of conversiondue 2008, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock Series A (the "Warrant SharesNOTES" and, together with the guarantee of each Guarantor (the ") exercisable at a price per share of $.01 (subject to adjustmentGUARANTEE"), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "WarrantsSECURITIES", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture (Ythe "INDENTURE") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of November 17, 1998 by and among the Conversion Date Company, the Guarantors and The Bank of New York, as trustee (the "TRUSTEE"). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as defined amended (the "ACT"), in Section 2.2reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared an offering memorandum dated November 12, 1998 (the "OFFERING MEMORANDUM") until due at setting forth or including a description of the rate terms of 12% per annumthe Notes, payable in cash quarterly in arrears on March 31the terms of the offering of the Notes, June 30, September 30, a description of the Company and December 31 in each year commencing on any material developments relating to the Conversion Date, Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and at maturity or prior prepayment their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in full. The the form attached hereto as Exhibit A (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company has authorized agreed, among other things, to file with the issuance Securities and Exchange Commission (the "COMMISSION") under the circumstances set forth therein (i) a registration statement (the "REGISTRATION STATEMENT") under the Act relating to the Noteholders Company's 8% Senior Notes due 2008, Series B (the "EXCHANGE NOTES"), to be offered in exchange for the Notes or (ii) a shelf registration statement pursuant to Rule 415 under the Act relating to the resale of the Convertible NotesNotes by holders thereof or, and upon conversion thereofif applicable, relating to the resale of debt securities of the Company substantially identical to the Exchange Notes (the "PRIVATE EXCHANGE NOTES") by the Initial Purchasers pursuant to an exchange of the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Sharesfor Private Exchange Notes.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $500,000,000 aggregate principal amount of its 2.00% Convertible Senior Notes due 2018 and $29,995,000 500,000,000 aggregate principal amount of its 2.75% Convertible Senior Notes due 2021 (or such lower amount determined on a pro-rata basis in collectively, the event “Firm Notes”), convertible into shares of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversionCompany’s common stock, in the form set forth as Exhibit 2.1(i) attached hereto par value $.01 per share (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor“Common Stock”), and (ii) Common Stock Purchase Warrants at the election of the Company for the purchase (subject Initial Purchasers, up to adjustment as provided for therein) of an aggregate of 210.016 $100,000,000 additional principal amount of its 2.00% Convertible Senior Notes due 2018 and $100,000,000 additional principal amount of its 2.75% Convertible Senior Notes due 2021 (or such lower amount determined on a pro-rata basis in collectively, the event of any in part conversion) of “Optional Notes” and, together with the Company's Common Stock (Firm Notes, the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Notes”). The Notes shall are to be issued under separate indentures (Ythe “Indentures”), each to be dated as of December 20, 2013, by and between the Company and Wilmington Trust, National Association, as Trustee (the “Trustee”). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions therefrom. In connection with the offering of the Firm Notes, the Company is separately entering into convertible note hedge transactions and warrant transactions with one or more counterparties, which may include affiliates of one or more of the Initial Purchasers (each, a “Call Spread Counterparty”), in each case pursuant to a convertible note hedge confirmation (a “Base Bond Hedge Confirmation”) payable on September 30and a warrant confirmation (a “Base Warrant Confirmation”), 2009respectively, each dated the date hereof (the Base Bond Hedge Confirmations and the Base Warrant Confirmations, collectively, the “Base Call Spread Confirmations”), and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized connection with the issuance of any Optional Notes, the Company and each Call Spread Counterparty may enter into an additional convertible note hedge transaction and an additional warrant transaction pursuant to an additional convertible note hedge confirmation (an “Additional Bond Hedge Confirmation”) and an additional warrant confirmation (an “Additional Warrant Confirmation”), respectively, each to be dated the date on which the option granted to the Noteholders of Initial Purchasers pursuant to Section 3 hereof to purchase such Optional Notes is exercised (the Convertible Notes, Additional Bond Hedge Confirmations and upon conversion thereofthe Additional Warrant Confirmations, the Notes and “Additional Call Spread Confirmations” and, together with the WarrantsBase Call Spread Confirmations, and upon exercise of the Warrants the issuance and sale of the Warrant Shares“Call Spread Confirmations”).

The Securities. The Company has authorized Subject to the issuance of its Senior Subordinated Secured Convertible Notes due September 30terms and conditions herein -------------- contained, 2009 in the Companies propose to issue and sell to the Initial Purchaser $140,000,000 aggregate original principal amount of $30,000,000their 10% Senior Notes due 2006 (the "Notes"). The Senior Subordinated Secured Convertible obligations of the Companies under the Indenture (as hereinafter ----- defined) and the Notes shall will be conditionally guaranteed (the "Guarantees") by ---------- the Guarantor, as described in the form set forth Indenture (as Exhibit 2.1 attached hereto defined below). The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. Securities." The Convertible Notes shall (a) ---------- Securities are to be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice issued pursuant to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock indenture (the "Warrant SharesIndenture") exercisable at a price per share of $.01 (subject to adjustment), in dated as --------- of August 21, 1998, among the form set forth Companies, the Guarantor and Bank of Montreal Trust Company, as Exhibit 2.1(ii) attached hereto trustee (referred to herein individually as a "Warrant" and collectively as the "WarrantsTrustee", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be secured by the ------- Pledged Collateral (Yas defined in the Pledge Agreement) payable on September 30, 2009, and pursuant to a pledge agreement (Zthe "Pledge Agreement") bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on to be dated the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Closing Date (as defined in ---------------- Section 2.23 below). Simultaneously with the issuance of the Notes, the Initial Purchaser will enter into an assignment agreement (the "Assignment Agreement") until due at in the rate form -------------------- attached as Annex A hereto, pursuant to which the Initial Purchaser will purchase from the lenders named in the Assignment Agreement approximately $137,000,000 of 12% per annumindebtedness of the Companies and certain of their affiliates (the "Chase ----- Debt"). The Chase Debt will then be restructured (the "Restructuring") and will ------------- be evidenced by the Notes. The Securities will be offered and sold to the Initial Purchaser without such offers and sales being registered under the Securities Act of 1933, payable as amended (together with the rules and regulations of the Securities and Exchange Commission (the "Commission") promulgated thereunder, the "Act"), in cash quarterly reliance on ---------- --- exemptions therefrom. In connection with the sale of the Securities, the Companies have prepared a preliminary offering memorandum dated July 29, 1998 and a final offering memorandum dated August 17, 1998 (the "Memorandum"), setting forth or including ---------- a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Companies and the Guarantor and any material developments relating to the Companies and the Guarantor occurring after the date of the most recent historical financial statements included therein. The Companies and the Guarantor understand that the Initial Purchaser proposes to make an offering of the Securities only on the terms and in arrears on March 31the manner set forth in the Memorandum and Section 9 hereof as soon as the Initial Purchaser deems advisable after this Agreement has been executed and delivered, June 30to persons in the United States whom the Initial Purchaser reasonably believes to be qualified institutional buyers ("QIBs") as defined in Rule 144A ---- under the Act, September 30as such rule may be amended from time to time ("Rule 144A"), in --------- transactions under Rule 144A, and December 31 in each year commencing private sales exempt from registration under the Act, and outside the United States to certain persons in reliance on Regulation S under the Conversion Act. The Initial Purchaser and its direct and indirect transferees of the Securities will be entitled to the benefits of a registration rights agreement to be dated the Closing Date, among the parties hereto (the "Registration Rights ------------------- Agreement") pursuant to which the Companies and at maturity the Guarantor have agreed, among --------- other things, to file (i) a registration statement (the "Registration ------------ Statement") with the Commission registering the Securities or prior prepayment the Exchange Notes --------- (as defined in the Registration Rights Agreement) under the Act or (ii) a shelf registration statement pursuant to Rule 415 under the Act relating to the resale of the Securities by holders thereof or, if applicable, relating to the resale of Private Exchange Notes (as defined in the Registration Rights Agreement) by the Initial Purchaser pursuant to an exchange of the Notes in fullfor Private Exchange Notes. The Company has authorized Securities, the issuance Exchange Notes, the Private Exchange Notes, the Indenture, the Registration Rights Agreement, the Pledge Agreement and this Agreement are herein collectively referred to as the "Basic Documents". The --------------- Companies propose to issue the Notes in connection with the Restructuring and the System Acquisition to be effected pursuant to the Noteholders Financing Plan (collectively, the "Transactions") (together with each other agreement entered ------------ into in connection with any of the Convertible Notes, and upon conversion thereofforegoing, the Notes and "Transaction Documents"). --------------------- Capitalized terms used herein without definition have the Warrants, and upon exercise of meanings ascribed to such terms in the Warrants the issuance and sale of the Warrant SharesMemorandum.

The Securities. The Company has authorized Subject to the issuance of its Senior Subordinated Secured Convertible Notes due September 30terms and conditions herein contained, 2009 the Issuers propose to issue and sell to the several purchasers named in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached Schedule 1 hereto and are herein referred to individually as a "Convertible Note" and collectively as (the "Convertible NotesInitial Purchasers", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the $150,000,000 aggregate principal amount of $29,995,000 their 12 3/4% Senior Subordinated Notes due 2010 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture (Ythe "Indenture") payable on September 30to be dated as of February 9, 20092000 by and among Parent, the Issuers, the Subsidiary Guarantors and United States Trust Company of New York, as trustee (Z) bear interest compounded quarterly the "Trustee"). The Notes will be guaranteed (based the "Guarantees"), jointly and severally, by Parent and the Subsidiary Guarantors (together, the "Guarantors"), on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in fullsenior subordinated basis. The Company has authorized the issuance Notes will be offered and sold to the Noteholders Initial Purchasers without being registered under the Securities Act of 1933, as amended (the Convertible Notes"Act"), and upon conversion thereof, in reliance on exemptions therefrom. In connection with the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesNotes, Parent and the Subsidiaries have prepared a preliminary offering memorandum dated January 17, 2000 (the "Preliminary Memorandum") and will prepare a final offering memorandum dated February 4, 2000 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") each setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of Parent and the Subsidiaries and any material developments relating to Parent and the Subsidiaries occurring after the date of the most recent historical financial statements included therein.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent and Finance Co. propose to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $1,400,000,000 aggregate principal amount of $29,995,000 their senior notes due 2013 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Y) payable on September 30, 2009the "Guarantees", and (Ztogether with the Notes, the "Securities") bear interest compounded quarterly (based by each of the Guarantors on a 360-day year of twelve 30-day monthsjoint and several basis. The Notes are to be issued under an indenture (the "Indenture") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of February 28, 2003 by and among the Conversion Date Issuers and The Bank of New York, as Trustee (the "Trustee"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated February 11, 2003 (the "Preliminary Memorandum") and a final offering memorandum dated February 25, 2003 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities and a description of the Company and its subsidiaries. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Issuers will agree, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Securities or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $80,000,000 aggregate principal amount of $29,995,000 its 11 5/8% Senior Subordinated Notes due 2006, Series A (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be unconditionally guaranteed (Ythe "Guarantee") payable on September 30a senior subordinated basis by Holdings. The Notes and the Guarantee are collectively referred to herein as the "Securities". The Securities are to be issued under an indenture (the "Indenture") to be dated as of February 23, 20091998 by and among the Company, Holdings and Marine Midland Bank, as Trustee (the "Trustee"). The Securities will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated January 29, 1998 (the "Preliminary Memorandum"), and a final offering memorandum dated February 18, 1998 (Zthe "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") bear interest compounded quarterly (based on setting forth or including a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as description of the Conversion Date terms of the Securities, the terms of the offering of the Securities, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchaser and its direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company and Holdings have agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized Subject to the issuance terms and conditions herein contained, the Issuers propose to issue and sell to the Initial Purchasers $175,000,000 aggregate principal amount at maturity of its their 10-7/8% Senior Subordinated Secured Convertible Discount Notes due 2004 (the "Notes"). The obligations of the Issuers under the Indenture (as hereinafter defined) and the Notes will be unconditionally guaranteed (the "Guarantees"), on a joint and several basis, by each Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), dated as of September 30, 2009 in 1997, among the aggregate original principal amount of $30,000,000Issuers, the Guarantors and Wilmington Trust Company, as trustee (the "Trustee"). The Senior Subordinated Secured Convertible Notes shall be in and the form set forth as Exhibit 2.1 attached hereto and Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Notes"Securities." The Securities will be offered and sold to the Initial Purchasers without such offers and sales being registered under the Securities Act of 1933, which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall as amended (a) be payable on September 30, 2009 together with the rules and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment regulations of the Convertible Notes in full. The Convertible Notes shall be convertible at any timeSecurities and Exchange Commission (the "Commission") promulgated thereunder, the "Securities Act"), in whole or in part, in reliance on exemptions therefrom. In connection with the sole discretion sale of the Noteholder thereofSecurities, upon such Noteholder's delivery the Issuers have prepared a preliminary offering memorandum dated September 5, 1997, the "Preliminary Memorandum") and a final offering memorandum dated September 24, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), each setting forth or including a description of notice the terms of the Securities, the terms of the offering of the Securities, a description of the Company and its subsidiaries and any material developments relating to the Company and its subsidiaries occurring after the date of its intent the most recent historical financial statements included therein. The Issuers and the Guarantors understand that the Initial Purchasers propose to convertmake an offering of the Securities only on the terms and in the manner set forth in the Memorandum and Section 9 hereof as soon as the Initial Purchasers deem advisable after this Agreement has been executed and delivered, to persons in the United States whom the Initial Purchasers reasonably believe to be qualified institutional buyers ("QIBs") as defined in Rule 144A under the Securities Act, as such rule may be amended from time to time ("Rule 144A"), in transactions under Rule 144A, and to a limited number of institutional "accredited investors" ("Accredited Investors"), as defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of the Securities Act, in private sales exempt from registration under the Securities Act, and outside the United States to certain persons in reliance on Regulation S under the Securities Act. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement dated as of the Closing Date among the parties hereto (the "Registration Rights Agreement") pursuant to which the Obligors have agreed, among other things, to file (i) a registration statement (the "Registration Statement") with the Commission registering the Notes or the Exchange Notes (as defined in the Registration Rights Agreement) under the Securities Act or (ii) a shelf registration statement pursuant to Rule 415 under the Securities Act relating to the resale of the Notes by holders thereof or, if applicable, relating to the resale of Private Exchange Notes (as defined in the Registration Rights Agreement) by the Initial Purchasers pursuant to an exchange of the Notes for Private Exchange Notes. The Securities, the Indenture, the Registration Rights Agreement and this Agreement are herein collectively referred to as the "Basic Documents". ACME Television Holdings, LLC, a Delaware limited liability company ("ACME Parent"), has entered into an acquisition agreement dated July 29, 1997 (the "St. Louis Acquisition Agreement") pursuant to which the Company has agreed to acquire (the "St. Louis Acquisition") Station KPLR, St. Louis, Missouri (the "St. Louis Station") and in connection therewith the Company has entered into a local marketing agreement with respect to the St. Louis Station (the "St. Louis LMA") (each as described in the Final Memorandum). In addition, the Company or one of the Guarantors, as the case may be, has entered into (i) Senior Subordinated Secured Notes due September 30an agreement dated August 22, 2009 1997 (the "Salt Lake City Acquisition Agreement") to construct and acquire (the "Salt Lake City Acquisition") a new television broadcast station in Salt Lake City, Utah (the "Salt Lake City Station") (each as described in the aggregate principal amount of $29,995,000 Final Memorandum), (or such lower amount determined on ii) an agreement dated August 22, 1997 (the "Albuquerque Acquisition Agreement") to construct and acquire (the "Albuquerque Acquisition") a pro-rata basis new television broadcast station in Albuquerque, New Mexico (the "Albuquerque Station") (each as described in the event of any in part conversionFinal Memorandum) plus any interest owed in arrears on and (iii) an agreement dated May 28, 1997 (the Convertible Notes on "Knoxville Acquisition") to upgrade the date of conversionstudio and transmitting capabilities and acquire (the "Knoxville Acquisition") Station WINT, Knoxville, Tennessee (the "Knoxville Station") (each as descxxxxd in the form set forth as Exhibit 2.1(i) attached hereto (Final Memorandum). The St. Louis Acquisition Agreement, the Salt Lake City Acquisition Agreement, the Albuquerque Acquisition Agreement and the Knoxville Acquisition Agreement are collectively referred to herein individually as a "Note" and collectively as the "NotesAcquisition Agreements." The St. Louis Acquisition, the Salt Lake City Acquisition, the Albuquerque Acquisition and the Knoxville Acquisition are collectively referred to herein as the "Acquisitions." The St. Louis Station, the Salt Lake City Station, the Albuquerque Station and the Knoxville Station are collectively referred to herein as the "Acquisition Stations." On the Closing Date, prior to or simultaneously with the closing hereunder, (i) ACME Parent will make a capital contribution to ACME Intermediate Holdings, LCC, a Delaware limited liability company ("ACME Intermediate"), of $21.7 million, which terms shall also include any notes delivered in exchange or replacement thereforACME Intermediate will simultaneously contribute to the capital of the Company (the "Parent Equity Contribution"), and (ii) Common Stock Purchase Warrants of ACME Intermediate will make an additional capital contri- bution to the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock $38.2 million (the "Warrant SharesIntermediate Equity Contribution") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30offer, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance purchase and sale of the Warrant SharesSecurities as contemplated by this Agreement, the consummation of the Revolving Credit Facility and the Capital Lease Facilities (each as defined and described in the Final Memorandum), the Parent Equity Contribution, the Intermediate Equity Contribution, the St. Louis LMA and the Acquisitions are collectively referred to herein as the "Transactions."

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the Company of its intent terms and conditions herein contained, SDI Acquisition proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $100,000,000 aggregate principal amount of $29,995,000 its 11 3/8% Senior Subordinated Notes due 2008 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are being sold in connection with the recapitalization (Ythe "Recapitalization") payable on September 30of Special Devices, 2009Incorporated, a Delaware corporation (the "Company"), pursuant to the Amended and Restated Agreement and Plan of Merger dated as of June 19, 1998 by and between the Company and SDI Acquisition (Zas amended through the date hereof and together with all ancillary agreements entered into in connection therewith, the "Recapitalization Agreement"). The Recapitalization Agreement provides for the merger (the "Merger") bear interest compounded quarterly of SDI Acquisition with and into the Company with the Company surviving the Merger. The time of the consummation of the Recapitalization and the Merger is referred to herein as the "Effective Time." The Recapitalization will be financed with the proceeds of (based on i) a 360-day year new credit facility consisting of twelve 30-day months) on a revolving credit facility in the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note of $25.0 million and a $70.0 million senior term loan provided under a Credit Agreement, dated as of the Conversion Closing Date (as defined in Section 2.2) until due at the rate of 12% per annum3 below), payable in cash quarterly in arrears on March 31among SDI Acquisition, June 30Bankers Trust Company, September 30as lead arranger and administrative agent, and December 31 the other lending institutions party thereto (the "Credit Agreement"); (ii) the issuance of Notes; and (iii) an equity contribution of approximately $127.8 million in each year commencing the aggregate consisting of (a) $74.0 million contributed by the New Investor Group (as defined in the Final Memorandum) and (b) $53.8 million from the Equity Rollover (as defined in the Final 2 Memorandum) by the Continuing Shareholders (as defined in the Final Memorandum). The Recapitalization and items (i), (ii) and (iii) above are sometimes collectively referred to herein as the "Transactions" and the Recapitalization Agreement and the Credit Agreement are sometimes collectively referred to herein as the "Other Transaction Documents." Immediately after the Effective Time, the Company and the Guarantor (as defined below) will execute an assumption agreement (the "Assumption Agreement"), substantially in the form attached hereto as Exhibit A, pursuant to which (i) the Company, as survivor of the Merger, will assume all of the obligations of SDI Acquisition under this Agreement, and Scot, Xxc., a Delaware corporation and a wholly owned subsidiary of the Company (the "Guarantor"), will become a party to this Agreement and unconditionally guarantee the Notes (the "Guarantee") on an unsecured, senior subordinated basis and (ii) the Conversion Company, as the surviving corporation in the Merger, will assume all of the obligations of SDI Acquisition under the Registration Rights Agreement by and among SDI Acquisition and the Initial Purchasers, dated as of the Closing Date, substantially in the form attached hereto as Exhibit B (the "Registration Rights Agreement"), and at maturity or prior prepayment Scot, Xxc. will become a party to the Registration Rights Agreement. The Notes and the Guarantee are collectively referred to herein as the "Securities." The Notes are to be issued under an indenture (the "Indenture") to be dated as of December 15, 1998 by and between SDI Acquisition and United States Trust Company of New York, a New York banking corporation, as trustee (the "Trustee"). Immediately after the Effective Time, the Company, the Guarantor and the Trustee will enter into a first supplemental indenture to the Indenture (the "First Supplemental Indenture") providing for the express assumption by the Company, as survivor of the Merger, of the covenants, agreements and undertakings of SDI Acquisition in the Indenture and under the Notes, and the guarantee of the Notes in fullby the Guarantor. The Company has authorized and the issuance Guarantor will issue the Securities pursuant to the Noteholders First Supplemental Indenture. References to this Agreement as of and after the Convertible NotesEffective Time will refer to this Agreement together with the Assumption Agreement, references to the Indenture as of and after the Effective Time will refer to the Indenture and the First Supplemental Indenture, and upon conversion thereofreferences to the Registration Rights Agreement as of and after the Effective Time will refer to the Registration Rights Agreement together with the Assumption Agreement. The Notes will be offered and sold to the Initial Purchasers (the "Offering") without being registered under the Securities Act of 1933, as amended (the Notes and "Act"), in reliance on exemptions therefrom. In connection with the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesSecurities, SDI Acquisition has prepared a preliminary offering memorandum dated November 25, 1998 (the "Preliminary Memorandum"), and a final offering memorandum dated December 11, 1998 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company and its Subsidiary (as defined in Section 2(b) below) and any material developments relating to the Company or its Subsidiary occurring after the date of the most recent historical financial statements included therein.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the Company of its intent terms and conditions herein contained, the Issuer proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $100,000,000 aggregate principal amount of $29,995,000 the Issuer's 11 1/2% Senior Subordinated Notes due 2007 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be guaranteed (Ycollectively, the "Guarantees") payable on September 30, 2009a senior subordinated basis by each of the Issuer's subsidiaries listed on the signature pages hereof (collectively, and together with any subsidiary that in the future executes a supplemental indenture pursuant to which such subsidiary agrees to guarantee the Notes, the "Guarantors"). The Notes and the Guarantees are collectively referred to herein as the "Securities." The Securities are to be issued under an indenture (Zthe "Indenture") bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on dated the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Closing Date (as defined below) by and among the Issuer, the Guarantors and Bankers Trust Company, as trustee (the "Trustee"). The Securities will be offered and sold to you without being registered under the Securities Act of 1933, as amended (the "Act"), in Section 2.2) until due at reliance on exemptions therefrom and pursuant to exemptions from the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, prospectus and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment registration requirements of the Notes in fullSecurities Act (Nova Scotia). The Company has authorized In connection with the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesSecurities, the Issuer has prepared a preliminary offering memorandum dated October 30, 1997 (the "Preliminary Memorandum") and a final offering memorandum dated November 14, 1997 (the "Final 2 Memorandum," the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Issuer and the Guarantors and any material developments relating to the Issuer and the Guarantors occurring after the date of the most recent historical financial statements included therein.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto proposes to issue and are herein referred sell to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall each Purchaser (a) be payable the number of shares of its Common Stock, par value $0.001 per share (the “Common Stock”), set forth on September 30the signature page of such Purchaser hereto (collectively, 2009 the “Shares”) and (b) bear interest compounded quarterly a warrant, substantially in the form attached hereto at Exhibit A (based on a 360-day year the “Warrants”), to acquire one share (the “Warrant Shares”) of twelve 30-day months) on Common Stock, for each five Shares purchased pursuant to this Agreement. The Shares and the unpaid principal amount thereof until due at Warrants are sometimes herein collectively referred to as the rate “Securities.” The Securities will be offered and sold to the Purchasers without such offers and sales being registered under the Securities Act of 12% per annum1933, payable in cash quarterly in arrears on March 31, June 30, September 30 as amended (together with the rules and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment regulations of the Convertible Notes in full. The Convertible Notes shall be convertible at any timeSecurities and Exchange Commission (the “Commission”) promulgated thereunder, the “Securities Act”), in whole or in part, in the sole discretion reliance on Section 4(2) of the Noteholder thereofSecurities Act and Rule 506 promulgated thereunder. In connection with the sale of the Securities, upon such Noteholder's delivery the Company has (i) prepared a confidential offering memorandum dated April 9, 2004 (including the documents incorporated by reference therein or attached as exhibits thereto, the “Memorandum”), setting forth or including a description of notice the Securities, the terms of the offering of the Securities, a description of the Company and its subsidiaries and any material developments relating to the Company of and its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on subsidiaries occurring after the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), most recent historical financial statements included therein; and (ii) Common Stock Purchase Warrants of made available its reports required to be filed by the Company for under the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock Exchange Act since December 31, 2003 (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (foregoing materials and all amendments thereto being collectively referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“SEC Reports”). The Notes SEC Reports, along with the Memorandum, are collectively referred to as the “Disclosure Documents.” All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Disclosure Documents (or other references of like import) shall (Y) payable on September 30, 2009, be deemed to mean and (Z) bear interest compounded quarterly (based on a 360-day year include all such financial statements and schedules and other information which is incorporated by reference in the Disclosure Documents. The Purchasers and their permitted transferees of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on Securities will be entitled to the Convertible Note benefits of the Registration Rights Agreement to be dated as of April 27, 2004 among the Conversion Date parties hereto (as defined in Section 2.2the “Registration Rights Agreement”) until due at pursuant to which the rate of 12% per annumCompany has agreed, payable in cash quarterly in arrears on March 31among other things, June 30, September 30, and December 31 in each year commencing on to file a registration statement (the Conversion Date, and at maturity or prior prepayment “Registration Statement”) pursuant to Rule 415 under the Securities Act relating to the resale of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes Shares and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesShares by holders thereof.

The Securities. (a) The Company has authorized has, by a Subscription Agreement, dated November 28, 1995 (the issuance of its Senior Subordinated Secured Convertible Notes due September 30"Subscription Agreement"), 2009 in among the Company and the managers named therein (the "Managers"), agreed to issue and sell to the Managers U.S. $500,000,000 aggregate original principal amount of $30,000,000. The Senior its 4q% Convertible Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein Debentures Due 2003 (hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible NotesInitial Securities" and together with the Over-Allotment Securities (as defined below), if any, the "Securities"). In addition, which terms shall also include any notes delivered in exchange or replacement thereforthe Company has granted an option to the Managers to subscribe for up to an additional U.S. $85,000,000 principal amount of Securities (the "Over-Allotment Securities") solely to cover over-allotments, if any. The Convertible Notes amount of Securities that may be issued hereunder may be increased by agreement between the Company and the Fiscal Agent, and such additional securities shall (a) be payable "Securities" hereunder. Interest on September 30, 2009 and (b) bear interest compounded quarterly (based the Securities shall be calculated on the basis of a 360-360 day year comprised of twelve 30-day months. (b) Pursuant to the Subscription Agreement, the Managers (or their affiliates) may sell the Securities to (i) persons who are not "U.S. Persons" (as such term is defined in Regulation S promulgated by the United States Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the "Securities Act")) in transactions that meet the requirements of Regulation S, (ii) _qualified institutional buyers" (as such term is defined in Rule 144A promulgated by the SEC pursuant to the Securities Act and hereinafter referred to as "QIBs") in reliance on Rule 144A (the Securities that are resold by the Managers pursuant to Rule 144A being hereinafter referred to as the "Rule 144A Securities") and (iii) a limited number of _institutional accredited investors" (within the meaning of Rule 501(a)(1), (2), (3) or (7) promulgated by the SEC pursuant to the Securities Act) ("Institutional Accredited Investors") that, prior to their purchase of any Securities, deliver to the Managers a letter containing certain representations and agreements. (c) A portion of the Securities will initially be issued in the form of a temporary global debenture in bearer form without coupons or conversion rights, which will be deposited with a depository in London for Cedel and Euroclear for the accounts of the subscribers of such Securities on the unpaid Closing Date (as defined herein). Upon deposit of the temporary global debenture, Cedel or Euroclear, as the case may be, will credit each subscriber with a principal amount of Securities equal to PAGE the principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 for which it has subscribed and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 paid in the aggregate principal amount of $29,995,000 (or such lower the entire issue of Securities less the aggregate principal amount determined on a pro-rata basis of the Rule 144A Securities and Accredited Investor Securities concurrently issued, substantially in the event form of any Exhibit B hereto (the "Regulation S Global Security"). As hereinafter provided, the Regulation S Global Security may subsequently be exchanged for Securities in part conversionprinted definitive form either as (i) plus any bearer Securities ("Bearer Securities") in denominations of U.S. $1,000 and U.S. $10,000 and with interest owed coupons attached thereto, representing the semi-annual interest payable thereon, or (ii) fully registered Securities ("Registered Regulation S Securities") in arrears denominations of U.S. $1,000 and integral multiples thereof, without coupons, or (iii) a beneficial interest in the Rule 144A Global Security (as defined below), in accordance with the provisions of Section 5(c). Bearer Securities shall be substantially in the form of Exhibit A hereto, including the coupons set forth therein. Registered Regulation S Securities also shall be substantially in the form of Exhibit A hereto. The Securities which are not Bearer Securities or the Regulation S Global Security are hereinafter collectively referred to as the "Registered Securities." (d) The Rule 144A Securities will initially be issued in the form of a global Security in the aggregate principal amount of the Rule 144A Securities, which Security shall be in substantially the form of Exhibit A hereto, and is hereinafter referred to as the "Rule 144A Global Security." Such Rule 144A Global Security shall be duly executed by the Company and authenticated by the Fiscal Agent (as defined below) as hereinafter provided and will be deposited on the Convertible Notes Closing Date with, or on behalf of, The Depositary Trust Company ("DTC") and registered in the name of Cede & Co., as nominee of DTC. The aggregate principal amount of the Rule 144A Global Security may from time to time be increased or reduced by adjustments made in the Security Register. Transfers of interests in the Rule 144A Global Security will be subject to certain restrictions set forth therein and described in Section 3 hereof. (e) The Accredited Investor Securities will initially be issued in fully registered form in minimum denominations of U.S. $250,000 and integral multiples of U.S. $1,000 in excess thereof, which Securities shall be in substantially the form of Exhibit A hereto, and are hereinafter collectively referred to as "Registered Accredited Investor Securities." Such Registered Accredited Investor Securities shall be in definitive, fully registered certificated form only and registered in the names of such Institutional Accredited Investors or their nominees. Such Institutional Accredited Investors may not elect to hold Registered Accredited Investor Securities through DTC, Euroclear or Cedel. The aggregate principal amount of the Registered Accredited Investor Securities may be increased or reduced by adjustments made in the Security Register. Transfers of Registered Accredited Investor Securities will be subject to PAGE certain restrictions set forth therein and described in Section 3 hereof. (f) During the period beginning on the Closing Date and ending on the date which is three years (or the then applicable holding period under Rule 144(k) under the Securities Act (or successor provision)) after the later of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" date of original issuance thereof and collectively as the "Notes", last date on which terms shall also include the Company or any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants affiliate of the Company was the owner thereof (or any predecessor), all Rule 144A Securities, all Accredited Investor Securities, all other Registered Securities and all Securities issued upon registration of transfer of or in exchange for such Securities, shall be "Restricted Securities" and shall be subject to the restrictions on transfer in Section 3 hereof; provided, however, that the term "Restricted Securities" shall not include Registered Securities as to which such restrictions on transfer have been terminated in accordance with Section 3(g) hereof. All Restricted Securities shall bear the legend required by Section 3(f) hereof. (g) The Securities will be convertible as provided in Section 4 of the Registered Securities and the Bearer Securities and Section 7 hereof. The Securities may be redeemed by the Company as provided in Section 3 of the Registered Securities and the Bearer Securities and Section 6 hereof. The Securities will be subordinated as provided in Section 7 of the Registered Securities and the Bearer Securities. The Registered Securities, the Bearer Securities and the Regulation S Global Security shall contain such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Agreement and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistent herewith, be determined by the officer of the Company executing such Securities, as evidenced by his execution of such Securities. (h) The Company in issuing the Securities shall use CUSIP numbers, and the Fiscal Agent may use such CUSIP numbers in any notice of redemption with respect to the Securities. The Company shall obtain one CUSIP number for the purchase Rule 144A Securities and one for the Registered Regulation S Securities. In addition, the Company shall obtain an ISIN number and a Common Code for the Regulation S Global Security, the Bearer Securities and the Registered Regulation S Securities. (subject i) Pursuant to adjustment the Subscription Agreement, the Managers (or their affiliates) may sell the Securities to persons who are not persons within the United States or its possessions or "United States persons" as defined in the Internal Revenue Code except as provided for thereinin U.S. Treasury Regulation Section 1.163-5 (c) (2) (i) (D). In compliance with United States tax laws and regulations, Bearer Securities may not be offered or sold during the 40-day period beginning on the Closing Date, or at any time if part of an aggregate a Manager's unsold allotment, to a person PAGE who is within the United States or to a United States person other than (a) foreign branches of 210.016 United States financial institutions if such institutions agree in writing to comply with the requirements of Section 165(j)(3)(A), (B), or such lower amount determined on a pro-rata basis in the event of any in part conversion(C) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share Internal Revenue Code of $.01 (subject to adjustment)1986, in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009amended, and the regulations thereunder, (Zb) bear interest compounded quarterly United States offices of exempt distributors, or (based on a 360-day year c) United States offices of twelve 30-day monthsinternational organizations or foreign central banks. United States tax laws and regulations also require that Bearer Securities not be delivered within the United States. (j) The Company will use its reasonable best efforts to have the Securities approved for listing on the unpaid principal amount thereof plus any interest owed in arrears on Luxembourg Stock Exchange or such other exchange as shall be agreed upon by the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes Managers and the WarrantsCompany, and upon exercise of as soon as practicable after the Warrants the issuance and sale of the Warrant Shares.date hereof. PAGE

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $300,000,000 aggregate principal amount of $29,995,000 its 11% Senior Secured Notes due 2013, Series A (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture (Ythe "Indenture") payable to be dated as of February 7, 2003 by and between the Company and The Bank of New York, as Trustee (the "Trustee"). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on September 30exemptions therefrom. In connection with the sale of the Notes, 2009the Company has prepared a preliminary offering memorandum dated January 17, 2003 (the "Preliminary Memorandum") and a final offering memorandum dated January 31, 2003 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Notes and the collateral securing the Notes, the terms of the offering of the Notes, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein, The Notes will be secured by liens on certain real property of the Company set forth on Schedule 2 (each, a "Mortgaged Property" and together, the "Mortgaged Properties") and certain other assets of the Company as described in the Final Memorandum (the "Pledged Collateral"), and documented by the mortgages (Zthe "Mortgages") bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) evidencing the Liens on the unpaid principal amount thereof plus any interest owed in arrears Mortgaged Properties and by the other documents set forth on SCHEDULE 3 evidencing the Liens on the Convertible Note as Pledged Collateral (together with the Mortgages, the "Collateral Documents"). The Initial Purchasers and their direct and indirect transferees of the Conversion Date Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company has agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to each Purchaser, severally and not jointly, (a) the issuance number of shares of its Senior Subordinated Secured Convertible Notes due September 30Class A Common Stock, 2009 in par value $0.10 per share (the aggregate original principal amount "Common Stock"), set forth on the signature page of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be such Purchaser hereto (collectively, the "Shares") (b) a warrant, substantially in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as at Exhibit A (the "Convertible NotesSeries A Warrants"), which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall to acquire one (a1) be payable on September 30share (the "Series A Warrant Shares") of Common Stock for each two (2) Shares purchased pursuant to this Agreement, 2009 and (bc) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annumwarrant, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, substantially in the form set forth attached hereto as Exhibit 2.1(i) attached hereto B (referred to herein individually as a "Note" and collectively as the "NotesSeries B Warrants" and, together with the Series A Warrants, the ", which terms shall also include any notes delivered in exchange or replacement thereforWarrants"), and to acquire one (ii1) Common Stock Purchase Warrants of share (the Company for "Series B Warrant Shares" and, together with the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (Series A Warrant Shares, the "Warrant Shares") exercisable at a price per share of $.01 Common Stock for each two (subject 2) Shares purchased pursuant to adjustmentthis Agreement. The Shares and the Warrants are sometimes herein collectively referred to as the "Securities". The Securities will be offered and sold to the Purchasers without such offers and sales being registered under the Securities Act of 1933, as amended (together with the rules and regulations of the Securities and Exchange Commission (the "Commission") promulgated thereunder, the "Securities Act"), in reliance on exemptions therefrom. In connection with the form set forth sale of the Securities, the Company has made available to the Purchasers its periodic and current reports filed with the Commission under the Securities Exchange Act of 1934, as Exhibit 2.1(ii) attached hereto amended (the "Exchange Act"), since January 1, 2001. These reports, filings and amendments are collectively referred to herein individually as a "Warrant" and collectively as the "WarrantsDisclosure Documents", . All references in this Agreement to financial statements and schedules and other information which terms is "contained," "included" or "stated" in the Disclosure Documents shall also be deemed to mean and include any warrants delivered in exchange or replacement therefor)all such financial statements and schedules. The Notes shall (Y) payable on September 30, 2009, Purchasers and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as their direct and indirect transferees of the Conversion Date Securities will be entitled to the benefits of a Registration Rights Agreement in substantially the form attached hereto as Exhibit C (as defined in Section 2.2the "Registration Rights Agreement") until due at pursuant to which the rate of 12% per annumCompany will agree, payable in cash quarterly in arrears on March 31among other things, June 30, September 30, and December 31 in each year commencing on to effect a shelf registration statement (the Conversion Date, and at maturity or prior prepayment "Shelf Registration Statement") pursuant to Rule 415 under the Securities Act relating to the resale of the Notes in fullShares and the Warrant Shares by holders thereof. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereofRegistration Rights Agreement, the Notes and Engagement Letter with Xxxx Capital Partners, LLC (the Warrants"Placement Agent"), and upon exercise of the Warrants and this Agreement are herein collectively referred to as the issuance and sale of the Warrant Shares"Basic Documents".

The Securities. (a) The Company has authorized has, by a Subscription Agreement, dated August 5,1997 (the issuance of its Senior Subordinated Secured Convertible Notes due September 30"Subscription Agreement"), 2009 in among the Company, the Guarantor and the managers named therein (the "Managers"), agreed to issue and sell to the Managers U.S. $115,000,000 aggregate original principal amount of $30,000,000. The Senior its 4 3/8% Convertible Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein Debentures Due 2004 (hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible NotesSecurities", which terms shall also include any notes delivered in exchange or replacement therefor). The Convertible Notes amount of Securities that may be issued hereunder may be increased by agreement among Lehman Brothers International (Europe) (the "Lead Xxxxxer"), the Company, the Guarantor and the Fiscal Agent, and such additional securities shall be "Securities" hereunder. The due and punctual payment of principal, premium, if any, and interest and Additional Amounts (aas defined in Section 2 of the Securities) be payable on September 30the Securities when and as the same shall become due and payable, 2009 and (b) bear interest compounded quarterly (based whether at maturity, upon redemption or otherwise, are unconditionally guaranteed on a 360-subordinated basis by the Guarantor. Interest on the Securities shall be calculated on the basis of a 360 day year comprised of twelve 30-day months. (b) Pursuant to the Subscription Agreement, the Managers (or their affiliates) may sell the Securities to (i) persons who are not "U.S. Persons" (as such term is defined in Regulation S promulgated by the United States Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the "Securities Act")) in transactions that meet the requirements of Regulation S, (ii) "qualified institutional buyers" (as such term is defined in Rule 144A promulgated by the SEC pursuant to the Securities Act and hereinafter referred to as "QIBs") in reliance on Rule 144A (the Securities that are resold by the Managers pursuant to Rule 144A being hereinafter referred to as the "Rule 144A Securities") and (iii) a limited number of "institutional accredited investors" (within the meaning of Rule 501(a)(1), (2), (3) or (7) promulgated by the SEC pursuant to the Securities Act) ("Institutional Accredited Investors") that, prior to their purchase of any Securities, deliver to the Managers a letter containing certain representations and agreements (the Securities that are resold by the Managers to institutional accredited investors being referred to as the "Accredited Investor Securities"). 1PAGE (c) A portion of the Securities will initially be issued in the form of a temporary global debenture in bearer form without coupons or conversion rights having endorsed thereon the guarantee of the Guarantor (the "Guarantee"), which will be deposited with a depository in London for Cedel and Euroclear for the accounts of the subscribers of such Securities on the unpaid Closing Date (as defined herein). Upon deposit of the temporary global debenture, Cedel or Euroclear, as the case may be, will credit each subscriber with a principal amount of Securities equal to the principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 for which it has subscribed and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 paid in the aggregate principal amount of $29,995,000 (or such lower the entire issue of Securities less the aggregate principal amount determined on a pro-rata basis of the Rule 144A Securities and Accredited Investor Securities concurrently issued, substantially in the event form of any Exhibit B hereto (the "Regulation S Global Security"). As hereinafter provided, the Regulation S Global Security may subsequently be exchanged for Securities (i) in part conversionprinted definitive form with the Guarantees endorsed thereon either as (a) plus any bearer Securities ("Bearer Securities") in denominations of U.S. $1,000 and U.S. $10,000 and with interest owed coupons attached thereto, representing the semi-annual interest payable thereon, or (b) fully registered Securities ("Registered Regulation S Securities") in arrears denominations of U.S. $1,000 and integral multiples thereof, without coupons, or (ii) if permitted by Cedel or Euroclear, as the case may be, a beneficial interest in the Rule 144A Global Security (as defined below), in accordance with the provisions of Section 3(c). Bearer Securities shall be substantially in the form of Exhibit A hereto, including the coupons set forth therein. Registered Regulation S Securities also shall be substantially in the form of Exhibit A hereto. The Securities which are not Bearer Securities or the Regulation S Global Security are hereinafter collectively referred to as the "Registered Securities." (d) The Rule 144A Securities will initially be issued in the form of a global Security in the aggregate principal amount of the Rule 144A Securities, which Security shall be in substantially the form of Exhibit A hereto, having endorsed thereon a Guarantee, and is hereinafter referred to as the "Rule 144A Global Security." Such Rule 144A Global Security shall be duly executed by the Company and authenticated by the Fiscal Agent (as defined below) as hereinafter provided and will be deposited on the Convertible Notes Closing Date with, or on behalf of, The Depositary Trust Company ("DTC") and registered in the name of Cede & Co., as nominee of DTC. The aggregate principal amount of the Rule 144A Global Security may from time to time be increased or reduced by adjustments made in the Security Register. Transfers of interests in the Rule 144A Global Security will be subject to certain restrictions set forth therein and described in Section 3 hereof. (e) The Accredited Investor Securities will initially be issued in fully registered form in minimum denominations of U.S. $50,000 and integral multiples of U.S. $1,000 in excess 2PAGE thereof, which Securities shall be in substantially the form of Exhibit A hereto, having endorsed thereon a Guarantee, and are hereinafter collectively referred to as "Registered Accredited Investor Securities." Such Registered Accredited Investor Securities shall be in definitive, fully registered certificated form only and registered in the names of such Institutional Accredited Investors or their nominees. Such Institutional Accredited Investors may not elect to hold Registered Accredited Investor Securities through DTC, Euroclear or Cedel. As provided herein, such Registered Accredited Investor Securities may subsequently be exchanged for Registered Accredited Investor Securities in denominations of $1,000 and integral multiples thereof. The aggregate principal amount of the Registered Accredited Investor Securities may be increased or reduced by adjustments made in the Security Register. Transfers of Registered Accredited Investor Securities will be subject to certain restrictions set forth therein and described in Section 3 hereof. (f) During the period beginning on the Closing Date and ending on the date which is two years (or the then applicable holding period under Rule 144(k) under the Securities Act (or successor provision)) after the later of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" date of original issuance thereof and collectively as the "Notes", last date on which terms shall also include the Company or any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants affiliate of the Company was the owner thereof (or any predecessor), all Rule 144A Securities, all Accredited Investor Securities, all other Registered Securities and all Securities issued upon registration of transfer of or in exchange for such Securities, shall be "Restricted Securities" and shall be subject to the restrictions on transfer in Section 3 hereof; provided, however, that the term "Restricted Securities" shall not include Registered Securities as to which such restrictions on transfer have been terminated in accordance with Section 3(g) hereof. All Restricted Securities shall bear the legend required by Section 3(f) hereof. (g) The Securities will be convertible as provided in Section 4 of the Registered Securities and the Bearer Securities and Section 7 hereof. The Securities may be redeemed by the Company as provided in Section 3 of the Registered Securities and the Bearer Securities and Section 6 hereof. The Securities will be subordinated as provided in Section 7 of the Registered Securities and the Bearer Securities. The Registered Securities, the Bearer Securities and the Regulation S Global Security shall contain such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Agreement and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistent herewith, be determined by the officer of the Company executing such Securities, as evidenced by his execution of such Securities. (h) The Company in issuing the Securities shall use CUSIP numbers, and the Fiscal Agent may use such CUSIP numbers in 3PAGE any notice of redemption with respect to the Securities. The Company shall obtain one CUSIP number for the purchase Rule 144A Securities, one for the Accredited Investor Securities and one for the Registered Regulation S Securities. In addition, the Company shall obtain an ISIN number and a Common Code for the Regulation S Global Security, the Bearer Securities and the Registered Regulation S Securities. (subject i) Pursuant to adjustment the Subscription Agreement, the Managers (or their affiliates) may sell the Securities to persons who are not persons within the United States or its possessions or "United States persons" as defined in the Internal Revenue Code except as provided for thereinin U.S. Treasury Regulation Section 1.163-5(c)(2)(i)(D). In compliance with United States tax laws and regulations, Bearer Securities may not be offered or sold during the 40-day period beginning on the Closing Date, or at any time if part of a Manager's unsold allotment, to a person who is within the United States or its possessions or to a United States person other than (a) foreign branches of an aggregate United States financial institutions if such institutions agree in writing to comply with the requirements of 210.016 Section 165(j)(3)(A), (B), or such lower amount determined on a pro-rata basis in the event of any in part conversion(C) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share Internal Revenue Code of $.01 (subject to adjustment)1986, in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009amended, and the regulations thereunder, (Zb) bear interest compounded quarterly United States offices of exempt distributors, or (based on a 360-day year c) United States offices of twelve 30-day monthsinternational organizations or foreign central banks. United States tax laws and regulations also require that Bearer Securities not be delivered within the United States or its possessions. (j) The Company will use its reasonable best efforts to have the Securities approved for listing on the unpaid principal amount thereof plus any interest owed in arrears on Luxembourg Stock Exchange or such other exchange as shall be agreed upon by the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes Managers and the WarrantsCompany, and upon exercise of as soon as practicable after the Warrants the issuance and sale of the Warrant Sharesdate hereof.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into issue and sell to the Initial Purchaser (i) Senior Subordinated Secured Notes due September 30, 2009 in the euro)90,000,000 aggregate principal amount of $29,995,000 its 8 7/8% Senior Secured Notes due 2009, Series A (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be part of a series of notes issued initially on June 28, 2002 and are to be issued under the indenture (Ythe "Indenture") payable dated as of June 28, 2002 by and between the Company and The Bank of New York, as Trustee (the "Trustee"). The Notes will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared an offering memorandum dated November 18, 2004, which includes as a part thereof the Company's Annual Report on Form 10-K for the year ended December 31, 2003 and Quarterly Report on Form 10-Q for the quarter ended September 30, 20092004 (the "Offering Memorandum"), and (Z) bear interest compounded quarterly (based on setting forth or including a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as description of the Conversion Date terms of the Notes, the terms of the offering of the Notes, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchaser and its direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit C (the "Registration Rights Agreement"), pursuant to which the Company has agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, Act. The Initial Purchaser and December 31 in each year commencing on the Conversion Date, its direct and at maturity or prior prepayment indirect transferees of the Notes in full. The Company has authorized the issuance will also be entitled to the Noteholders benefits, and otherwise subject to the terms, of the Convertible NotesSecurity Documents (as defined in the Indenture) pursuant to which the Company has, among other things, granted a senior security interest in the Collateral (as defined in the Indenture), subject to certain exceptions and upon conversion thereof, otherwise in accordance with the Notes and the Warrants, and upon exercise terms of the Warrants the issuance and sale of the Warrant SharesIndenture.

The Securities. (a) The Company has authorized has, by a Subscription Agreement, dated July 10, 1997 (the issuance of its Senior Subordinated Secured Convertible Notes due September 30"Subscription Agreement"), 2009 in among the Company, the Guarantor and the managers named therein (the "Managers"), agreed to issue and sell to the Managers U.S. $150,000,000 aggregate original principal amount of $30,000,000. The Senior its 4-1/2% Convertible Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein Debentures Due 2004 (hereinafter referred to individually as a "Convertible Note" and collectively as the "Firm Securities"). In addition, the Company has granted the Managers an option to acquire up to an additional US $3,000,000 aggregate principal amount of its 4-1/2% Convertible NotesSubordinated Debentures Due 2004 (hereinafter referred to as the ", which terms shall also include any notes delivered in exchange or replacement thereforOption Securities"). The Convertible Notes Firm Securities and the Option Securities are collectively referred to as the "Securities." The amount of Securities that may be issued hereunder may be increased by agreement among Lehman Brothers International (Europe), Salomon Broxxxxx Inc. (Lehman Brothers International (Europe) and Salomon Xxxxxers Inc. are collectively referred to as the "Joint-Lead Managers"), the Company, the Guarantor and the Fiscal Agent, and such additional securities shall be "Securities" hereunder. The due and punctual payment of principal, premium, if any, and interest and Additional Amounts (aas defined in Section 2 of the Securities) be payable on September 30the Securities when and as the same shall become due and payable, 2009 and (b) bear interest compounded quarterly (based whether at maturity, upon redemption or otherwise, are unconditionally guaranteed on a 360-subordinated basis by the Guarantor. Interest on the Securities shall be calculated on the basis of a 360 day year comprised of twelve 30-day months. (b) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Pursuant to the Company of its intent Subscription Agreement, the Managers (or their affiliates) may sell the Securities to convert, into (i) Senior Subordinated Secured Notes due September 30persons who are not "U.S. Persons" (as such term is defined in Regulation S promulgated by the United States Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of 1933, 2009 as amended (the "Securities Act")) in transactions that meet the aggregate principal amount requirements of $29,995,000 Regulation S, (or ii) "qualified institutional buyers" (as such lower amount determined on a pro-rata basis term is defined in Rule 144A promulgated by the event of any in part conversion) plus any interest owed in arrears on SEC pursuant to the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (Securities Act and hereinafter referred to herein individually as a "Note" and collectively QIBs") in reliance on Rule 144A (the Securities that are resold by the Managers pursuant to Rule 144A being hereinafter referred to as the "NotesRule 144A Securities", which terms shall also include any notes delivered in exchange or replacement therefor) and (iii) a limited number of "institutional accredited investors" (within the meaning of Rule 501(a)(1), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment2), in (3) or (7) promulgated by the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance SEC pursuant to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.Securities Act) 1PAGE

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions -------------- herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $180,000,000 aggregate principal amount of $29,995,000 its 7 3/4% Senior Subordinated Notes due 2012, Series C (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes") having the terms set forth in that certain Indenture, which terms shall also include any notes delivered in exchange or replacement therefor)dated as of December 20, and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock 2002 (the "Warrant SharesIndenture") exercisable at a price per share of $.01 (subject to adjustment), in between the form set forth Company and U.S. Bank National Association, as Exhibit 2.1(ii) attached hereto successor-in-interest to State Street Bank and Trust Company (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement thereforTrustee). The Notes are to be issued under the Indenture. The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. The Company will prepare and deliver to the Initial Purchasers not later than 9:00 a.m. on February 4, 2003 copies of an offering memorandum to be dated January 28, 2003 (including documents incorporated by reference therein, the "Memorandum") setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. Any references herein to the Memorandum shall (Y) payable on September 30, 2009, be deemed to refer to and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus include any interest owed in arrears on the Convertible Note documents incorporated by reference therein as of the Conversion date of the Memorandum, and any reference to any amendment or supplement to the Memorandum shall be deemed to refer to and include any document filed under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange Act"), after the date of the Memorandum, unless otherwise noted. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, in form and substance reasonably satisfactory to the Initial Purchasers (the "Registration Rights Agreement"), pursuant to which the Company will agree, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in the Registration Rights Agreement) under the Act. On the Closing Date (as defined in Section 2.2) until due at 3 below), the rate Initial Purchasers will transfer the net proceeds of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment sale of the Notes as follows: (a) deposit an amount sufficient to redeem the Company's 8 7/8% Senior Subordinated Notes due 2008 (the "8 7/8 Notes") in full. The Company has authorized accordance with the issuance redemption notice issued pursuant to Section 7(l) below (the Noteholders of "Escrowed Funds"), which funds will be used to purchase or redeem the Convertible 8 7/8% Notes, and upon conversion thereof, (b) wire transfer (same day funds) the Notes and the Warrants, and upon exercise remaining net proceeds of the Warrants the issuance and sale of the Warrant SharesNotes to such account or accounts as the Company shall specify prior to the Closing Date. The Escrowed Funds will be placed into an escrow account (the "Escrow Account") pursuant to an escrow agreement substantially in the form of the Escrow Agreement, dated as of December 20, 2002, between the Company and State Street Bank and Trust Company (the "Escrow Agreement") to be dated as of the Closing Date by and among the Company and an escrow agent to be determined by the Company and reasonably acceptable to the Initial Purchasers (the "Escrow Agent"). Funds in the Escrow Account will be disbursed, until the purchase or redemption in full of the 8 7/8 Notes, to the Company solely upon certification by the Company that the funds will be immediately used to (i) fund the purchase price to be paid by the Company for the 8 7/8 Notes pursuant to a tender offer and/or (ii) fund the redemption price of the 8 7/8 Notes. Any funds remaining in the Escrow Account after the purchase or redemption by the Company of all of the 8 7/8 Notes will be disbursed to the Company. Upon the satisfaction of certain conditions as set forth in the Escrow Agreement, the Escrowed Funds will be released as set forth in Section 3.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as Initial Purchasers (the "Convertible NotesOffering", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the $475,000,000 aggregate principal amount of $29,995,000 its 8-7/8% Senior Notes due 2011 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes are to be issued under an indenture (the "Indenture") to be dated as of March 28, 2003 by and among the Company, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as Trustee (the "Trustee"). Thx Xxxes will be unconditionally guaranteed (the "Guarantees") on a senior subordinated basis by each of the Subsidiary Guarantors and, unless the context otherwise requires, any reference to the Notes shall include a reference to the related Guarantees. The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (Ythe "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated March 5, 2003 (the "Preliminary Memorandum") payable on September 30and a final offering memorandum dated March 17, 20092003 (including the information incorporated by reference therein, the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Notes are being sold in connection with the consummation of a merger (the "Merger") of DHM Acquisition Company, Inc., a Delaware corporation, with and into the Company pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated as of December 18, 2002 among DHM Acquisition Company, Inc., DHM Holding Company, Inc., a Delaware corporation ("Holdings"), David H. Murdock and the Company. In connection witx xxx Xxxxxx, Xxldings, the Company and Solvest, Ltd. ("Solvest") will enter into a senior secured credit facility in the amount of up to $1,125.0 million with Deutsche Bank AG New York, as administrative agent, and the other lenders party thereto (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as "Senior Credit Facility"). The Initial Purchasers and their direct and indirect transferees of the Conversion Date Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company and the Subsidiary Guarantors will agree, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $88,200,000 aggregate principal amount of $29,995,000 its 107/8% Senior Notes due 2012 (the "Securities"). The Securities are to be issued pursuant to the Indenture, to be dated as of March 24, 2005 (the "Indenture"), between the Company and The Bank of New York, as trustee (the "Trustee"). The Securities will be offered and sold to the Initial Purchaser without such offers and sales being registered under the Securities Act of 1933, as amended (together with the rules and regulations of the Securities and Exchange Commission (the "Commission") promulgated thereunder, the "Securities Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum, dated March 8, 2005 (the "Preliminary Memorandum"), and a final offering memorandum, dated March 21, 2005 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), each setting forth or such lower amount determined on including a pro-rata basis in description of the event terms of the Securities, the terms of the offering of the Securities, a description of the Company and its subsidiaries and any in part conversion) plus any interest owed in arrears on material developments relating to the Convertible Notes on Company and its subsidiaries occurring after the date of conversionthe most recent historical financial statements included therein. The Company understands that the Initial Purchaser proposes to make an offering of the Securities only on the terms and in the manner set forth in the Memorandum and Section 9 hereof as soon as the Initial Purchaser deems advisable after this Agreement has been executed and delivered (i) to persons in the United States whom the Initial Purchaser reasonably believes to be qualified institutional buyers ("QIBs") as defined in Rule 144A under the Securities Act, as such rule may be amended from time to time ("Rule 144A"), in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and transactions under Rule 144A; (ii) Common Stock Purchase Warrants to persons in the United States whom the Initial Purchaser reasonably believes (based upon written representations made by such persons to the Initial Purchaser) to be "accredited investors" ("Accredited Investors") as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act or (iii) outside the United States to certain persons in reliance on Regulation S under the Securities Act ("Regulation S"). The Initial Purchaser and its direct and indirect transferees of the Company for Securities will be entitled to the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) benefits of the Company's Common Stock Registration Rights Agreement, to be dated as of March 24, 2005 (the "Warrant SharesRegistration Rights Agreement"), between the parties hereto, pursuant to which the Company has agreed, among other things, to file (i) a registration statement (the "Registration Statement") exercisable at a price per share of $.01 (subject to adjustment), in with the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as Commission registering the "Warrants", which terms shall also include any warrants delivered in exchange Securities or replacement therefor). The the Exchange Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on Securities Act or (ii) a shelf registration statement pursuant to Rule 415 under the Conversion Date, and at maturity or prior prepayment Securities Act relating to the resale of the Securities by holders thereof or, if applicable, relating to the resale of Private Exchange Notes (as defined in fullthe Registration Rights Agreement) by the Initial Purchaser pursuant to an exchange of the Securities for Private Exchange Notes. The Securities, the Exchange Notes, the Private Exchange Notes, the Indenture, the Registration Rights Agreement and this Agreement are herein collectively referred to as the "Basic Documents." The Company has authorized proposes to issue the issuance to Securities simultaneously with the Noteholders amendment (the "Amendment") of the Convertible Notessenior credit facility of Affinity Group, and upon conversion thereofInc. ("AGI") to permit, among other things, a capital contribution consisting of the net proceeds of the offering of the Securities from the Company to AGI, which in turn will make a capital contribution in an equal amount to Camping World, Inc., which in turn will make a capital contribution in an equal amount to CWI, Inc., which in turn will make a capital contribution in an equal amount to CWFR Capital Corp. ("CWFR"), which in turn will acquire a preferred membership interest, with a face amount of $88.2 million, in FreedomRoads Holding Company, LLC ("FreedomRoads Holding") (collectively, the Notes and the Warrants, and upon exercise "Transactions"). The acquisition of the Warrants preferred membership interest in FreedomRoads Holding by CWFR will be effected pursuant to a purchase agreement (the issuance "CWFR Purchase Agreement") to be entered into by CWFR and sale of FreedomRoads Holding; the Warrant SharesAmendment, the CWFR Purchase Agreement and each other agreement entered into in connection therewith or in connection with the Transactions are hereinafter referred to as the "Transaction Documents."

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $500,000,000 aggregate principal amount of its 0.25% Convertible Senior Notes due 2020 (the “Firm Notes”), convertible into shares of the Company’s common stock, par value $29,995,000 .01 per share (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor“Common Stock”), and (ii) Common Stock Purchase Warrants at the election of the Company for the purchase (subject Initial Purchasers, up to adjustment as provided for therein) of an aggregate of 210.016 (or such lower $100,000,000 additional principal amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock its 0.25% Convertible Senior Notes due 2020 (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment)“Optional Notes” and, in together with the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as Firm Notes, the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Notes”). The Notes shall are to be issued under an indenture (Ythe “Indenture”), to be dated as of June 10, 2014, by and between the Company and Wilmington Trust, National Association, as trustee (the “Trustee”). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions therefrom. In connection with the offering of the Firm Notes, the Company is separately entering into convertible note hedge transactions and warrant transactions with one or more counterparties, which may include affiliates of one or more of the Initial Purchasers (each, a “Call Spread Counterparty”), in each case pursuant to a convertible note hedge confirmation (a “Base Bond Hedge Confirmation”) payable on September 30and a warrant confirmation (a “Base Warrant Confirmation”), 2009respectively, each dated the date hereof (the Base Bond Hedge Confirmations and the Base Warrant Confirmations, collectively, the “Base Call Spread Confirmations”), and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized connection with the issuance of any Optional Notes, the Company and each Call Spread Counterparty may enter into an additional convertible note hedge transaction and an additional warrant transaction pursuant to an additional convertible note hedge confirmation (an “Additional Bond Hedge Confirmation”) and an additional warrant confirmation (an “Additional Warrant Confirmation”), respectively, each to be dated the date on which the option granted to the Noteholders of Initial Purchasers pursuant to Section 3 hereof to purchase such Optional Notes is exercised (the Convertible Notes, Additional Bond Hedge Confirmations and upon conversion thereofthe Additional Warrant Confirmations, the Notes and “Additional Call Spread Confirmations” and, together with the WarrantsBase Call Spread Confirmations, and upon exercise of the Warrants the issuance and sale of the Warrant Shares“Call Spread Confirmations”).

The Securities. This Supplemental Indenture hereby establishes a series of Securities, known as and entitled "5.70% Senior Notes, 2003 Series A due 2033." The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of the Securities shall be limited initially to Two Hundred Million Dollars ($30,000,000200,000,000) (except for Senior Notes authenticated and delivered upon transfer of, or in exchange for, or in lieu of, other Senior Notes); provided that the Company may, without the consent of the Holders, "reopen" the series of Senior Notes so as to increase the aggregate principal amount of the Senior Notes in compliance with the procedures set forth in the Original Indenture, including Section 3.1 and Section 3.3 thereof, and subject to limitations, if any, on the Company's ability to issue Collateral Bonds securing the additional Senior Notes, so long as any such additional Senior Notes have the same tenor and terms as the Senior Notes then Outstanding. The Senior Subordinated Secured Convertible Notes shall be are not subject to repayment at the option of Holders thereof and are not subject to any sinking fund. As provided in the form set forth as Exhibit 2.1 of Senior Notes attached hereto and as Appendix I, the Senior Notes are herein referred subject to individually optional redemption, as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, by the Company prior to the Stated Maturity of the principal thereof on the terms set forth therein. Except as modified in the sole discretion form of the Noteholder Senior Notes, redemptions shall be effected in accordance with Article Twelve of the Original Indenture. The Senior Notes shall have such other terms and provisions as are set forth in the form of the Senior Notes attached hereto as Appendix I (which is incorporated by reference in and made a part of this Supplemental Indenture as if set forth in full at this place). The Senior Notes shall be issuable only in fully registered form and, as permitted by Section 3.1 and Section 3.2 of the Original Indenture, in denominations of $1,000 and integral multiples thereof. The Senior Notes will initially be issued in global form (the "Global Notes") under a book-entry system, upon registered in the name of The Depository Trust Company, as depository ("DTC"), or its nominee, which is hereby designated as "U.S. Depositary" under the Indenture. Further to Section 3.5 of the Original Indenture, any Global Note shall be exchangeable for Senior Notes registered in the name of, and a transfer of a Global Note may be registered to, any Person other than the U.S. Depositary for such Noteholder's delivery of notice to the Company of Senior Note or its intent to convert, into nominee only if (i) such U.S. Depositary notifies the Company that it is unwilling or unable to continue as U.S. Depositary for such Global Note or if at any time such U.S. Depositary ceases to be a clearing agency registered under the Exchange Act, and, in either such case, the Company does not appoint a successor U.S. Depositary within 90 days thereafter, (ii) the Company executes and delivers to the Trustee a Company Order that such Global Note shall be so exchangeable and the transfer thereof so registrable or (iii) there shall have occurred and be continuing an Event of Default or an event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default with respect to the Senior Subordinated Secured Notes. Upon the occurrence in respect of any Global Note of any or more of the conditions specified in clause (i), (ii) or (iii) of the preceding sentence, such Global Note may be exchanged for Senior Notes due September 30, 2009 registered in the aggregate principal amount name of, and the transfer of $29,995,000 such Global Note may be registered to, such Persons (or including Persons other than the U.S. Depositary and its nominees) as such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversionU.S. Depositary, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor)case of an exchange, and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as case of a "Warrant" and collectively as the "Warrants"transfer, which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Sharesdirect.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $75,000,000 aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible its 10 3/8% Senior Subordinated Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock due 2008 (the "Warrant SharesNOTES") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009will be unconditionally guaranteed ( the "GUARANTEES", and (Ztogether with the Notes, the "SECURITIES") bear interest compounded quarterly (based on a 360-day year of twelve 30-day monthssenior subordinated basis by Holdings, Xxxxx Rite Aerospace, Inc., Champion Aerospace Inc., Christie Electric Corp., Marathon Power Technologies Company and ZMP, Inc. (collectively, the "GUARANTORS"). The Securities are to be issued under an indenture (the "INDENTURE") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note dated as of December 3, 1998 as supplemented on April 23, 1999 and June 26, 2001 by and among the Conversion Date Company, the Guarantors and State Street Bank and Trust Company, as trustee (the "TRUSTEE"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "ACT"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Issuers have prepared a preliminary offering memorandum dated May 29, 2002 (the "PRELIMINARY MEMORANDUM"), and a final offering memorandum dated June 4, 2002 (the "FINAL MEMORANDUM"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "MEMORANDUM") setting forth or including, among other things, a description of the terms of the Securities, a description of the terms of the offering of the Securities, and a description of the Issuers and any material developments relating to the Issuers occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as EXHIBIT A (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company and the Guarantors have agreed, among other things, to file a registration statement (the "REGISTRATION STATEMENT") with the Securities and Exchange Commission (the "COMMISSION") registering the Securities, or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance Initial Purchasers $158,088,000 aggregate principal amount at maturity of its 113/4% Senior Subordinated Secured Convertible Discount Notes due September 30, 2009 in 2006 (the aggregate original principal amount of $30,000,000"Notes"). The Senior Subordinated Secured Convertible obligations of the Company under the Indenture (defined below) and the Notes shall will be in unconditionally guaranteed on a senior unsecured basis (the form set forth "Guarantees"), on a joint and several basis, by each Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), dated as Exhibit 2.1 attached hereto of July 27, 1998 among the Company, the Guarantors and Wilmington Trust Company, as trustee (the " Trustee"). The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Notes"Securities." The Notes will be offered and sold to the Initial Purchasers without such offers and sales being registered under the Securities Act of 1933, which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall as amended (a) be payable on September 30, 2009 together with the rules and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment regulations of the Convertible Notes in full. The Convertible Notes shall be convertible at any timeSecurities and Exchange Commission (the "Commission") promulgated thereunder, the "Securities Act"), in whole or in part, in reliance on exemptions therefrom. In connection with the sole discretion sale of the Noteholder thereofNotes, upon such Noteholder's delivery the Company has prepared a preliminary offering memorandum dated July 2, 1998 (the "Preliminary Memorandum") and a final offering memorandum dated July 22, 1998 (including the documents annexed thereto, the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), each setting forth or including a description of notice the terms of the Securities, the terms of the offering of the Notes, a description of the Company and its subsidiaries and any material developments relating to the Company of and its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on subsidiaries occurring after the date of conversion, the most recent historical financial statements included therein. All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in any Memorandum (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is included in any Memorandum. The Company and the Guarantors understand that the Initial Purchasers propose to make an offering of the Notes only on the terms and in the form manner set forth in the Memorandum and Section 9 hereof as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively soon as the "Notes"Initial Purchasers deem advisable after this Agreement has been executed and delivered, which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis persons in the event of any in part conversion) of United States whom the Company's Common Stock Initial Purchasers reasonably believe to be qualified institutional buyers (the "Warrant SharesQIBs") exercisable at a price per share of $.01 as defined in Rule 144A under the Securities Act, as such rule may be amended from time to time (subject to adjustment"Rule 144A"), in transactions under Rule 144A, and outside the form set forth as Exhibit 2.1(ii) attached hereto (referred United States to herein individually as a "Warrant" and collectively as certain persons in reliance on Regulation S under the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor)Securities Act. The Initial Purchasers and their direct and indirect transferees of the Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year will be entitled to the benefits of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note Registration Rights Agreement dated as of the Conversion Closing Date (as defined in Section 2.23 below) until due at among the rate of 12% per annumparties hereto (the "Registration Rights Agreement") pursuant to which the Issuers have agreed, payable among other things, to file (i) a registration statement (the "Registration Statement") with the Commission registering the Notes or the Exchange Notes (as defined in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity Registration Rights Agreement) under the Securities Act or prior prepayment (ii) a shelf registration statement pursuant to Rule 415 under the Securities Act relating to the resale of the Notes by holders thereof or, if applicable, relating to the resale of Private Exchange Notes (as defined in fullthe Registration Rights Agreement) by the Initial Purchasers pursuant to an exchange of the Notes for Private Exchange Notes. The Company has authorized Securities, the issuance to the Noteholders of the Convertible Exchange Notes, and upon conversion thereofthe Private Exchange Notes, the Notes Indenture, the Registration Rights Agreement and this Agreement are herein collectively referred to as the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares"Basic Documents".

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $255,000,000 aggregate principal amount of $29,995,000 its 9 5/8% Senior Notes due 2011 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be unconditionally guaranteed (Ythe "Guarantees" and, together with the Notes, the "Securities") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year senior basis by each of twelve 30-day monthsthe Guarantors. The Securities are to be issued under an indenture (the "Indenture") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of April 16, 2003 by and among the Conversion Date Company, the Guarantors and The Bank of New York, as Trustee (the "Trustee"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated March 27, 2003 (the "Preliminary Memorandum") and a final offering memorandum dated April 10, 2003 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company and any material developments relat- ing to the Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Issuers have agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Securities or the Exchange Securities (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the Company of its intent terms and conditions herein contained, the Issuer proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $400,000,000 aggregate principal amount of $29,995,000 its 6.00% Senior Notes due 2025 (or such lower amount determined the “Notes”). The payment of principal, premium, if any, and interest on the Notes will be jointly, severally, fully and unconditionally guaranteed (collectively, the “Guarantees”) on a pro-rata senior unsecured basis in by each of the event of any in part conversion) plus any interest owed in arrears on Guarantors. The Notes and the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (Guarantees are collectively referred to herein individually as a "Note" and collectively as the "Notes"“Securities.” The Securities will be issued by the Issuer and the Guarantors, which terms shall also include any notes delivered in exchange or replacement therefor)as applicable, and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject pursuant to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock indenture (the "Warrant Shares"“Indenture”) exercisable at a price per share to be dated as of $.01 January 25, 2016, by and among the Issuer, the Guarantors and Xxxxx Fargo Bank, National Association, as Trustee (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Trustee”). The Notes shall will be issued only in book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company. The Securities will be offered and sold to the Initial Purchasers without being registered with the Securities and Exchange Commission (Ythe “Commission”) payable under the Securities Act of 1933, as amended (the “Act”), in reliance on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on exemptions therefrom. Pursuant to the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as terms of the Conversion Date (as defined in Section 2.2) until due at Securities and the rate of 12% per annumIndenture, payable in cash quarterly in arrears on March 31investors who acquire Securities shall be deemed to have agreed that Securities may only be resold or otherwise transferred, June 30after the date hereof, September 30, and December 31 in each year commencing on if such Securities are registered for sale under the Conversion Date, and at maturity Act or prior prepayment if an exemption from the registration requirements of the Notes in full. The Company has authorized Act is available (including the issuance to exemptions afforded by Rule 144A under the Noteholders of Act (“Rule 144A”) or Regulation S under the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct (“Regulation S”)).

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $175,000,000 aggregate principal amount of $29,995,000 its 101/2% Senior Subordinated Notes due 2012 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be unconditionally guaranteed (Ythe "Guarantees" and, together with the Notes, the "Securities") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year senior subordinated basis by each of twelve 30-day monthsthe Guarantors. The Securities are to be issued under an indenture (the "Indenture") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of August 8, 2002 by and among the Conversion Date Company, the Guarantors and The Bank of New York, as Trustee (the "Trustee"). The Securities will be issued in connection with and conditioned upon the acquisition by the Company of Grove Investors, Inc. (the "Target") (the "Acquisition") pursuant to an Agreement and Plan of Merger (the "Agreement and Plan of Merger") and the other related documents (together with the Agreement and Plan of Merger, the "Acquisition Documents") dated as of March 18, 2002. On the Closing Date, Grove Investors, Inc., Grove Holdings, Inc., Grove Worldwide, Inc., Crane Acquisition Corp., Crane Holding Inc. and Grove U.S. LLC will become parties to this Agreement for purposes of the indemnification set forth in Section 10 hereof by executing a Joinder Agreement substantially in the form attached hereto as Exhibit A (the "Joinder Agreement"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated July 19, 2002 (the "Preliminary Memorandum") and a final offering memorandum dated August 2, 2002 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Securities (except that the Preliminary Memorandum excludes certain pricing and related information), the terms of the offering of the Securities, a description of the Issuers and any material developments relating to the Issuers occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit B (the "Registration Rights Agreement"), pursuant to which the Company and the Guarantors have agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Securities or the Exchange Securities (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the Company of its intent terms and conditions herein -------------- contained, the Issuers propose to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $100,000,000 aggregate principal amount of $29,995,000 their 8-7/8% Secured Notes due 2008, Series A (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes"). The Notes are to be issued under an indenture dated as ----- of February 9, which terms shall also include any notes delivered in exchange or replacement therefor2001, as supplemented by a First Supplemental Indenture dated September 11, 2001 (the "Indenture") by and among the Issuers and The Bank of --------- New York, as Trustee (the "Trustee"). ------- The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in --- reliance on exemptions therefrom. In connection with the sale of the Notes, the Issuers and Universal Compression, Inc., a Texas corporation (the "Company"), have prepared an ------- offering memorandum dated the date hereof (the "Memorandum") setting forth or ---------- including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Issuers, the Company and any material developments relating to the Issuers and the Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights --------- ------------------- Agreement"), pursuant to which the Issuers, the Company and Universal --------- Compression Holdings, Inc., a Delaware corporation ("UCH"), have agreed, among other things, to file a registration statement (the "Registration Statement") ---------------------- with the Securities and Exchange Commission (the "Commission") registering the ---------- Notes or the Exchange Notes (as defined in the Registration Rights Agreement) under the Act. The Notes are being issued in connection with (i) BRL borrowing approximately $18,300,000 (the "BRL Term Loan") under the Tranche B Loan ------------- Agreement (as amended, the "BRL Term Loan Agreement") and (ii) Common Stock Purchase Warrants the issuance by ----------------------- BRL of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock limited partnership interests (the "Warrant SharesPartnership Contribution") exercisable at a price per share for ------------------------ aggregate consideration of $.01 3,737,500 pursuant to Amendment No. 2 to the First Amended and Restated Agreement of Limited Partnership of BRL Universal Equipment 2001 A, L.P. (subject the "Partnership Agreement"). BRL will apply the proceeds from --------------------- the issuance of the Notes, the BRL Term Loan and the Partnership Contribution to adjustmentacquire at least $122,000,000 of appraised value of domestic gas compression equipment (the "Equipment") from the Company. Contemporaneously with the --------- acquisition of the Equipment, BRL will lease the Equipment to the Company pursuant to an Equipment Lease Agreement dated February 9, 2001, as amended by a First Amendment to Equipment Lease Agreement dated October 15, 2001 (the "Lease"), in between BRL and the form set forth as Exhibit 2.1(ii) attached hereto Company and also enter into a First Amended and Restated Participation Agreement (the "Participation Agreement"), dated October ----------------------- 15, 2001, among BRL, the Company, the Trustee and the other parties thereto. The BRL Term Loan Agreement, the Partnership Agreement, the Lease and the Participation Agreement are collectively referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesTransaction ----------- Documents." ---------

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized shall issue and sell to the issuance Initial Purchasers an aggregate of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original $55,000,000 principal amount of $30,000,000its 10 5/8% Series A Senior Notes due 2007 (the “Senior Notes”). The Senior Subordinated Secured Convertible Notes shall are to be in issued under the form set forth indenture (the “Indenture”) dated as Exhibit 2.1 attached hereto of November 22, 2000 by and between the Company and JPMorgan Chase Bank (formerly The Chase Manhattan Bank), as trustee (the “Trustee”). The Senior Notes are herein sometimes referred to individually as a "Convertible Note" and collectively herein as the "Convertible Notes"“Securities.” The Securities are being offered and sold to the Initial Purchasers without being registered under the United States Securities Act of 1933, which terms shall also include any notes delivered as amended (the “Act”) in exchange or replacement thereforreliance on exemptions therefrom. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on In connection with the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment sale of the Convertible Notes in full. The Convertible Notes shall be convertible at any timeSecurities, in whole the Company has prepared a final offering memorandum dated the date hereof (the “Final Memorandum”), setting forth or in partincluding, in the sole discretion among other things, a description of the Noteholder thereofterms of the Securities, upon such Noteholder's delivery the terms of notice the offering of the Securities and a description of the business of the Company and any material developments relating to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on occurring after the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" most recent historical financial statements included therein. The Initial Purchasers and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), their direct and (ii) Common Stock Purchase Warrants indirect transferees of the Company for Securities will be entitled to the purchase (subject benefits of a Registration Rights Agreement to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note be dated as of the Conversion Closing Date (as defined in Section 2.23 below) until (the “Registration Rights Agreement”), pursuant to which the Company shall agree, among other things, to file with the United States 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 10 5/8% Series B Senior Notes due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment 2007 of the Notes Company (the “Exchange Notes”) to be offered in full. The Company has authorized exchange (the issuance to “Exchange Offer”) for the Noteholders of the Convertible Senior Notes, and upon conversion thereof(ii) as and to the extent required by the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 under the Act (the “Shelf Registration Statement” and, together with the Exchange Offer Registration Statement, the Notes “Registration Statements”), relating to the resale by certain holders of the Senior Notes, and to use their reasonable best efforts to cause such Registration Statements to be declared effective. This Purchase Agreement (this “Agreement”), the Senior Notes, the Exchange Notes, the Indenture and the Warrants, and upon exercise of Registration Rights Agreement are hereinafter referred to collectively as the Warrants the issuance and sale of the Warrant Shares“Operative Documents.”

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convertissue and sell to each Initial Purchaser, into (i) Senior Subordinated Secured Notes due September 30severally and not jointly, 2009 in the aggregate principal amount of $29,995,000 Notes (or such lower amount determined on a pro-rata basis in the event of any in part conversionas defined below) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth in Schedule A opposite the name of such Initial Purchaser. The Second Priority Senior Secured Floating Rate Notes due 2009 (the “Notes”) are to be issued under an indenture (the “Indenture”) to be dated as Exhibit 2.1(iof September 30, 2004 by and between the Company, the guarantors listed on Schedule 1 (the “Guarantors”) attached hereto and U.S. Bank National Association, as Trustee (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor“Trustee”), and (ii) Common Stock Purchase Warrants will be guaranteed on a second priority senior secured basis by each of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock Guarantors (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Guarantees”). The Notes shall and the Guarantees are collectively referred to herein as the “Securities.” The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (Ythe “Act”), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared and delivered a preliminary offering memorandum dated September 10, 2004, including any amendments, supplements, exhibits and documents incorporated by reference therein (the “Preliminary Memorandum”) payable on and will prepare and deliver a final offering memorandum dated September 3023, 20092004, including any amendments, supplements, exhibits and documents incorporated by reference therein (the “Final Memorandum”; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a “Memorandum”) setting forth or including, among other things, a description of the terms of the Securities and the collateral securing the Securities, the terms of the offering of the Securities, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. Concurrently with the issuance of the Securities, the Company will pay in full all amounts outstanding (including all accrued and deferred interest) under the Third Amended and Restated Loan and Security Agreement dated as of December 31, 2002 (as amended from time to time) among the Company, as borrower, the guarantors party thereto from time to time, General Electric Capital Corporation, as administrative agent (the “Administrative Agent”) and the lenders (the “Lenders”) party thereto from time to time (the “Credit Agreement”), and all indebtedness evidenced by the Company’s 11% senior subordinated notes (Z) bear interest compounded quarterly (based the “Existing Subordinated Notes”). The Securities will be secured on a 360-day year of twelve 30-day months) second priority basis by liens on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as substantially all assets of the Conversion Date Company and the Guarantors as described in the Final Memorandum (the “Collateral”), and documented by the Collateral Documents (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, Indenture). The Initial Purchasers and December 31 in each year commencing on the Conversion Date, their direct and at maturity or prior prepayment indirect transferees of the Notes in full. The Company has authorized the issuance Securities will be entitled to the Noteholders benefits of the Convertible Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Company and the Guarantors will agree, among other things, to file a registration statement (the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) registering the Notes, and upon conversion thereof, the Guarantees or the Exchange Notes and the Warrants, related guarantees thereof (as defined in the Registration Rights Agreement) under the Act. All references in this Agreement to financial statements and upon exercise schedules and other information which is “contained,” “included” or “stated” in a Memorandum (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference into such Memorandum; and all references in this Agreement to amendments or supplements to a Memorandum shall be deemed to mean and include the Warrants filing of any document under the issuance and sale Securities Exchange Act of 1934 (the Warrant Shares“1934 Act”) that is incorporated by reference in such Memorandum.

The Securities. (a) The Company has authorized has, by a Subscription Agreement, dated April 10, 1997 (the issuance of its Senior Subordinated Secured Convertible Notes due September 30"Subscription Agreement"), 2009 in among the Company, the Guarantor and the managers named therein (the "Managers"), agreed to issue and sell to the Managers U.S. $50,000,000 aggregate original principal amount of $30,000,000. The Senior its 4 7/8% Convertible Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein Debentures Due 2004 (hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible NotesSecurities", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes amount of Securities that may be issued hereunder may be increased by agreement among Xxxxxx Brothers International (Europe) (the "Lead Manager"), the Company, the Guarantor and the Fiscal Agent, and such additional securities shall be "Securities" hereunder. The due and punctual payment of principal, premium, if any, and interest and Additional Amounts (aas defined in Section 2 of the Securities) be payable on September 30the Securities when and as the same shall become due and payable, 2009 and (b) bear interest compounded quarterly (based whether at maturity, upon redemption or otherwise, are unconditionally guaranteed on a 360-subordinated basis by the Guarantor. Interest on the Securities shall be calculated on the basis of a 360 day year comprised of twelve 30-day months. (b) Pursuant to the Subscription Agreement, the Managers (or their affiliates) may sell the Securities to (i) persons who are not "U.S. Persons" (as such term is defined in Regulation S promulgated by the United States Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of 1933, as amended (the "Securities Act")) in transactions that meet the requirements of Regulation S, (ii) "qualified institutional buyers" (as such term is defined in Rule 144A promulgated by the SEC pursuant to the Securities Act and hereinafter referred to as "QIBs") in reliance on Rule 144A (the Securities that are resold by the Managers pursuant to Rule 144A being hereinafter referred to as the "Rule 144A Securities") and (iii) a limited number of "institutional accredited investors" (within the meaning of Rule 501(a)(1), (2), (3) or (7) promulgated by the SEC pursuant to the Securities Act) ("Institutional Accredited Investors") that, prior to their purchase of any Securities, deliver to the Managers a letter containing certain representations and agreements (the Securities that are resold by the Managers to institutional accredited investors being referred to as the "Accredited Investor Securities"). PAGE (c) A portion of the Securities will initially be issued in the form of a temporary global debenture in bearer form without coupons or conversion rights having endorsed thereon the guarantee of the Guarantor (the "Guarantee"), which will be deposited with a depository in London for Cedel and Euroclear for the accounts of the subscribers of such Securities on the unpaid Closing Date (as defined herein). Upon deposit of the temporary global debenture, Cedel or Euroclear, as the case may be, will credit each subscriber with a principal amount of Securities equal to the principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 for which it has subscribed and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 paid in the aggregate principal amount of $29,995,000 (or such lower the entire issue of Securities less the aggregate principal amount determined on a pro-rata basis of the Rule 144A Securities and Accredited Investor Securities concurrently issued, substantially in the event form of any Exhibit B hereto (the "Regulation S Global Security"). As hereinafter provided, the Regulation S Global Security may subsequently be exchanged for Securities (i) in part conversionprinted definitive form with the Guarantees endorsed thereon either as (a) plus any bearer Securities ("Bearer Securities") in denominations of U.S. $1,000 and U.S. $10,000 and with interest owed coupons attached thereto, representing the semi-annual interest payable thereon, or (b) fully registered Securities ("Registered Regulation S Securities") in arrears denominations of U.S. $1,000 and integral multiples thereof, without coupons, or (ii) if permitted by Cedel or Euroclear, as the case may be, a beneficial interest in the Rule 144A Global Security (as defined below), in accordance with the provisions of Section 3(c). Bearer Securities shall be substantially in the form of Exhibit A hereto, including the coupons set forth therein. Registered Regulation S Securities also shall be substantially in the form of Exhibit A hereto. The Securities which are not Bearer Securities or the Regulation S Global Security are hereinafter collectively referred to as the "Registered Securities." (d) The Rule 144A Securities will initially be issued in the form of a global Security in the aggregate principal amount of the Rule 144A Securities, which Security shall be in substantially the form of Exhibit A hereto, having endorsed thereon a Guarantee, and is hereinafter referred to as the "Rule 144A Global Security." Such Rule 144A Global Security shall be duly executed by the Company and authenticated by the Fiscal Agent (as defined below) as hereinafter provided and will be deposited on the Convertible Notes Closing Date with, or on behalf of, The Depositary Trust Company ("DTC") and registered in the name of Cede & Co., as nominee of DTC. The aggregate principal amount of the Rule 144A Global Security may from time to time be increased or reduced by adjustments made in the Security Register. Transfers of interests in the Rule 144A Global Security will be subject to certain restrictions set forth therein and described in Section 3 hereof. (e) The Accredited Investor Securities will initially be issued in fully registered form in minimum denominations of PAGE U.S. $50,000 and integral multiples of U.S. $1,000 in excess thereof, which Securities shall be in substantially the form of Exhibit A hereto, having endorsed thereon a Guarantee, and are hereinafter collectively referred to as "Registered Accredited Investor Securities." Such Registered Accredited Investor Securities shall be in definitive, fully registered certificated form only and registered in the names of such Institutional Accredited Investors or their nominees. Such Institutional Accredited Investors may not elect to hold Registered Accredited Investor Securities through DTC, Euroclear or Cedel. As provided herein, such Registered Accredited Investor Securities may subsequently be exchanged for Registered Accredited Investor Securities in denominations of $1,000 and integral multiples thereof. The aggregate principal amount of the Registered Accredited Investor Securities may be increased or reduced by adjustments made in the Security Register. Transfers of Registered Accredited Investor Securities will be subject to certain restrictions set forth therein and described in Section 3 hereof. (f) During the period beginning on the Closing Date and ending on the date which is three years (or the then applicable holding period under Rule 144(k) under the Securities Act (or successor provision)) after the later of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" date of original issuance thereof and collectively as the "Notes", last date on which terms shall also include the Company or any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants affiliate of the Company was the owner thereof (or any predecessor), all Rule 144A Securities, all Accredited Investor Securities, all other Registered Securities and all Securities issued upon registration of transfer of or in exchange for such Securities, shall be "Restricted Securities" and shall be subject to the restrictions on transfer in Section 3 hereof; provided, however, that the term "Restricted Securities" shall not include Registered Securities as to which such restrictions on transfer have been terminated in accordance with Section 3(g) hereof. All Restricted Securities shall bear the legend required by Section 3(f) hereof. (g) The Securities will be convertible as provided in Section 4 of the Registered Securities and the Bearer Securities and Section 7 hereof. The Securities may be redeemed by the Company as provided in Section 3 of the Registered Securities and the Bearer Securities and Section 6 hereof. The Securities will be subordinated as provided in Section 7 of the Registered Securities and the Bearer Securities. The Registered Securities, the Bearer Securities and the Regulation S Global Security shall contain such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Agreement and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistent herewith, be determined by the officer of the Company executing such Securities, as evidenced by his execution of such Securities. PAGE (h) The Company in issuing the Securities shall use CUSIP numbers, and the Fiscal Agent may use such CUSIP numbers in any notice of redemption with respect to the Securities. The Company shall obtain one CUSIP number for the purchase Rule 144A Securities and one for the Registered Regulation S Securities. In addition, the Company shall obtain an ISIN number and a Common Code for the Regulation S Global Security, the Bearer Securities and the Registered Regulation S Securities. (subject i) Pursuant to adjustment the Subscription Agreement, the Managers (or their affiliates) may sell the Securities to persons who are not persons within the United States or its possessions or "United States persons" as defined in the Internal Revenue Code except as provided for thereinin U.S. Treasury Regulation Section 1.163-5 (c) (2) (i) (D). In compliance with United States tax laws and regulations, Bearer Securities may not be offered or sold during the 40-day period beginning on the Closing Date, or at any time if part of an aggregate a Manager's unsold allotment, to a person who is within the United States or its possessions or to a United States person other than (a) foreign branches of 210.016 United States financial institutions if such institutions agree in writing to comply with the requirements of Section 165(j)(3)(A), (B), or such lower amount determined on a pro-rata basis in the event of any in part conversion(C) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share Internal Revenue Code of $.01 (subject to adjustment)1986, in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009amended, and the regulations thereunder, (Zb) bear interest compounded quarterly United States offices of exempt distributors, or (based on a 360-day year c) United States offices of twelve 30-day monthsinternational organizations or foreign central banks. United States tax laws and regulations also require that Bearer Securities not be delivered within the United States or its possessions. (j) The Company will use its reasonable best efforts to have the Securities approved for listing on the unpaid principal amount thereof plus any interest owed in arrears on Luxembourg Stock Exchange or such other exchange as shall be agreed upon by the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes Managers and the WarrantsCompany, and upon exercise of as soon as practicable after the Warrants the issuance and sale of the Warrant Sharesdate hereof.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convertissue and sell to Mxxxxxx Lynch, into Pierce, Fxxxxx & Sxxxx Incorporated (i“Mxxxxxx Lxxxx”) Senior Subordinated Secured Notes due September 30and the several Initial Purchasers named in Schedule 1 ( together with Mxxxxxx Lxxxx, 2009 in the “Initial Purchasers”) $350,000,000 aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible its 6.75% Senior Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock due 2022 (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Notes”). The Notes shall will be unconditionally guaranteed (Ythe “Guarantees”) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day monthssenior basis by the Subsidiary Guarantors. The Notes and the Guarantees are collectively referred to herein as the “Securities.” The Securities are to be issued under an indenture (as supplemented to date, the “Indenture”) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note dated as of October 4, 2010 by and among the Conversion Date Company, the Subsidiary Guarantors and U.S. Bank National Association, as Trustee (the “Trustee”). Mxxxxxx Lxxxx has agreed to act as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment representative of the Notes several Initial Purchasers (the “Representative”) in fullconnection with the offering and sale of the Notes. The Company has authorized previously issued $225,000,000 aggregate principal amount of 6.75% Senior Notes due 2022 (the issuance “Existing Notes”) under the Indenture. The Securities constitute “Additional Notes” (as such term is defined in the Indenture) under the Indenture. Except as otherwise disclosed in the Pricing Disclosure Package (as defined below) and the Final Offering Memorandum (as defined below), the Securities will have terms identical to the Noteholders Existing Notes and will be treated as a single series of debt securities for all purposes under the Indenture. The Company has, pursuant to an Offer to Purchase and Consent Solicitation Statement and related letter of transmittal, each dated as of November 8, 2010 (together, the “Offer to Purchase”), commenced a cash tender offer (the “Tender Offer”) for any and all of its outstanding 7.00% notes due 2014 (the “2014 Notes”) and consent solicitation (the “Consent Solicitation”) of registered holders of the Convertible Notes2014 Notes to certain proposed amendments and waivers to the indenture, dated as of March 22, 2004 (as amended and upon conversion thereofsupplemented, the Notes “2014 Indenture”) among the Company, the guarantors party thereto and U.S. Bank National Association, as trustee under the 2014 Indenture. As described in the Pricing Disclosure Package and the WarrantsFinal Memorandum, and upon exercise of the Warrants it is expected that proceeds from the issuance and sale of the Warrant SharesSecurities shall be used to (i) pay consideration to holders who tender their 2014 Notes in the Tender Offer to the extent the Company obtains the requisite consents under the Consent Solicitation and (ii) pay fees and expenses in connection with the Tender Offer and Consent Solicitation. The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions therefrom.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the Company of its intent terms and conditions herein contained, the Issuers propose to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $150,000,000 aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible their 10 3/4% Senior Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock due 2011 (the "Warrant SharesNOTES") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be unconditionally guaranteed (Ycollectively the "GUARANTEES") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year senior basis by each of twelve 30-day monthsthe Guarantors. The Notes and the Guarantees are collectively referred to herein as the "Securities." The Securities are to be issued under an indenture (the "INDENTURE") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of May 23, 2003 by and among the Conversion Date Issuers, the Guarantors and BNY Trust Midwest Company, as Trustee (the "TRUSTEE"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "ACT"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Issuers have prepared a preliminary offering memorandum dated May 8, 2003 (the "PRELIMINARY MEMORANDUM") and a final offering memorandum dated May 20, 2003 (the "FINAL MEMORANDUM"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "MEMORANDUM") setting forth or including a description of the terms of the Notes, the terms of the offering of the Securities, a description of the Parent and its subsidiaries (including the Issuers) and any material developments relating to the Parent and its subsidiaries (including the Issuers) occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as EXHIBIT A (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Issuers and the Guarantors have agreed, among other things, to file a registration statement (the "REGISTRATION STATEMENT") with the Securities and Exchange Commission (the "COMMISSION") registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate Act. In connection with the offering of 12% per annumthe Securities, payable in cash quarterly in arrears on March 31the Issuers and the Guarantors will amend and restate (the "AMENDMENT") the credit agreement, June 30dated as of April 15, September 302003, by and December 31 in each year commencing among SportRack, LLC, Valley Industries, LLC, Brink B.V., the other persons as designated as "Credit Parties" on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion signature pages thereof, the Notes and the Warrantsfinancial institutions party thereto as Lenders, including without limitation, Antares Capital Corporation, Xxxxxxx Xxxxx Capital, and upon exercise of General Electric Capital Corporation (the Warrants the issuance and sale of the Warrant Shares"CREDIT AGREEMENT").

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30and NB Finance propose, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice subject to the Company of its intent terms and conditions herein, to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 issue and sell to the several Initial Purchasers named in the Schedule 1 hereto $160,000,000 aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible their 10 1/2% Senior Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock Due 2011 (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Notes”). The Notes shall are to be issued under an indenture, dated as of August 6, 2003 (Ythe “Indenture”), among the Issuers and U.S. Bank National Association, as Trustee (the “Trustee”). The issuance and sale of the Notes to the Initial Purchasers is referred to herein as the “Offering. The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Issuers have prepared a preliminary offering memorandum dated July 22, 2003 (the “Preliminary Memorandum”) payable on September 30and a final offering memorandum dated July 31, 20092003 (the “Final Memorandum”; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a “Memorandum”) setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Issuers and any material developments relating to the Issuers occurring after the date of the most recent historical financial statements included therein. The Notes are being sold in connection with the consummation of the acquisition (Zthe “Acquisition”) bear interest compounded quarterly by U.S. Premium Beef, Ltd. (based on “USPB”) and others of the partnership interests of Farmland National Beef Packing Company, L.P. that USPB does not currently own pursuant to the that certain Asset Sale and Purchase Agreement (the “Asset Sale Agreement”) dated June 12, 2003, by and among USPB, USPBCo, LLC, U.S. Premium Products, LLC, Farmland Industries, Inc., Farmland Foods, Inc. and NBPCo., LLC. In connection with the offering of the Notes, the Company will enter into a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note third amended and restated credit agreement to be dated as of the Conversion Closing Date (as defined in Section 2.23 below) until due at by and among the rate of 12% per annumCompany, payable in cash quarterly in arrears on March 31, June 30, September 30, U.S. Bank National Association and December 31 in each year commencing on the Conversion Date, other lenders party thereto (the “Credit Agreement”). The Offering and at maturity or prior prepayment the Acquisition and the transactions contemplated thereby and hereby are referred to collectively as the “Transactions.” The Initial Purchasers and their direct and indirect transferees of the Notes in full. The Company has authorized the issuance will be entitled to the Noteholders benefits of the Convertible NotesRegistration Rights Agreement, substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Issuers will agree, among other things, to file a registration statement (the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) registering the Notes or the Exchange Notes (as defined in the Registration Rights Agreement) under the Act. This Agreement is being entered into by NB Acquisition, which will be involved in the Acquisition, and upon conversion thereofNB Finance, which is a wholly owned subsidiary of NB Acquisition. In connection with the consummation of the Transactions (as defined herein), as discussed in the Final Memorandum, the Notes Company shall execute this Agreement on the Closing Date and the Warrants, will observe and upon exercise perform all of the Warrants rights, obligations and liabilities herein as if it were an original signatory hereto. Upon execution of this Agreement by the issuance Company on the Closing Date, NB Acquisition shall be fully, unconditionally and sale irrevocably released from all rights, obligations and liabilities hereunder. NB Acquisition and NB Finance and, as of the Warrant Shares.Closing Date, the Issuers, hereby agree with the several Purchasers as follows:

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $177,000,000 aggregate principal amount of $29,995,000 (or such lower amount determined on a proits 11-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible 5/8% Senior Notes on the date of conversiondue 2007, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock Series A (the "Warrant SharesNOTES") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be unconditionally guaranteed (Ycollectively the "GUARANTEES") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year senior basis by each of twelve 30-day monthsthe Subsidiary Guarantors. The Notes and the Guarantees are collectively referred to herein as the "SECURITIES." The Securities are to be issued under an indenture (the "INDENTURE") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of February 20, 2002 by and among the Conversion Date Company, the Subsidiary Guarantors and The Bank of New York, as Trustee (the "TRUSTEE"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "ACT"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated January 31, 2002 (the "PRELIMINARY MEMORANDUM") -3- and a final offering memorandum dated February 14, 2002 (the "FINAL MEMORANDUM"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "MEMORANDUM") setting forth or including a description of the terms of the Notes, the terms of the offering of the Securities, a description of the Company and its subsidiaries and any material developments relating to the Company and its subsidiaries occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as EXHIBIT A (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company and the Subsidiary Guarantors have agreed, among other things, to file a registration statement (the "REGISTRATION STATEMENT") with the Securities and Exchange Commission (the "COMMISSION") registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate Act. Concurrently with the offering of 12% per annumthe Notes, payable in cash quarterly in arrears on March 31the Company and the Subsidiary Guarantors will enter into a credit agreement (the "CREDIT AGREEMENT") with The Bank of Nova Scotia, June 30, September 30as administrative agent, and December 31 in each year commencing on certain lenders thereto whereby the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shareswill have available a $40 million revolving credit facility.

The Securities. The Company Borrower has authorized the issuance of its Senior Subordinated Secured Convertible Notes senior subordinated convertible notes due September 30May 24, 2009 2010 in the aggregate original principal amount of $30,000,00010,000,000 (individually, a "CONVERTIBLE SUBORDINATED NOTE", collectively, and together with any notes delivered in exchange or replacement therefor, the "CONVERTIBLE SUBORDINATED NOTES"). The Senior Convertible Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30May 24, 2009 2010 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March May 31, June 30August 31, September November 30 and December 31 February 28 in each year, commencing September 30August 31, 20032004, and at maturity or prior prepayment of the Convertible Subordinated Notes in full. The Convertible Subordinated Notes shall be convertible at any time, in whole or in part, in the sole discretion of the any Noteholder thereof, upon such Noteholder's delivery of notice to the Company Borrower of its intent to convert, into (i) Senior Subordinated Secured Notes senior subordinated notes due September 30May 24, 2009 2010 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) 9,990,000 plus any interest owed in arrears on the Convertible Subordinated Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "NoteSUBORDINATED NOTE" and collectively as the "Notes"collectively, which terms shall also include together with any notes delivered in exchange or replacement thereforthereof, as the "SUBORDINATED NOTES"), and (ii) Common Stock Purchase Warrants common stock purchase warrants of the Company Borrower for the purchase of an aggregate of 289,807 of the fully diluted common equity shares (subject to adjustment as provided for thereinin the case of stock splits, stock dividends, combinations, recapitalizations and the like) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's TMHC Holdings Common Stock (the "Warrant SharesWARRANT SHARES") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "WarrantWARRANT" and collectively as the "Warrants"collectively, which terms shall also include together any warrants delivered in exchange or replacement therefortherefore, as the "WARRANTS"). The Subordinated Notes shall (Ya) be payable on September 30May 24, 20092010, and (Zb) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note Subordinated Notes as of the Conversion Date (as defined in Section 2.22.2 of this Agreement) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March May 31, June 30August 31, September 30, November 30 and December 31 February 28 in each year year, commencing on the Conversion Date, and at maturity or prior prepayment payments of the Subordinated Notes in full. The Company Borrower has authorized the issuance to the Noteholders of the Convertible Subordinated Notes, and upon conversion thereof, the Subordinated Notes and the Warrants, and and, upon exercise of the Warrants Warrants, the issuance and sale of the Warrant Shares.

The Securities. The Subject to the terms and conditions herein contained, (i) the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in Initial Purchaser 105,000 Units (the "Units") representing $105,000,000 aggregate original principal amount of $30,000,000its 12% Senior Notes due 2007 (collectively, where context permits, with the Senior Guarantees defined below, the "Notes") and Appreciation Notes due 2007 (the "Appreciation Notes"). The Senior Subordinated Secured Convertible Units, the Notes shall be in and the form set forth as Exhibit 2.1 attached hereto and Appreciation Notes are herein referred to individually as a "Convertible Note" and herein collectively as the "Convertible NotesSecurities", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall Units are to be issued under a Unit Agreement (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefordefined below). The Notes shall will be guaranteed (Ythe "Senior Guarantees") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based by each of the Guarantors on a 360-day year senior basis. The Appreciation Notes will be guaranteed (the "Appreciation Note Guarantee" and collectively with the Senior Guarantees, the "Guarantees") by each of twelve 30-day monthsthe Guarantors on a subordinated basis. The Notes are to be issued under an indenture (the "Indenture") on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of the Conversion Closing Date (as defined in Section 2.23 below), by and among the Company, the Guarantors and The United States Trust Company of New York, as trustee (the "Trustee"). The Appreciation Notes are to be issued under an indenture (the "Appreciation Notes Indenture") until due at to be dated as of the rate Closing Date by and among the Company, the Guarantors and United States Trust Company of 12% per annumNew York, payable as trustee (the "Appreciation Notes Trustee"). The Units will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in cash quarterly reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated December 3, 1997 (the "Preliminary Memorandum") and will prepare a final offering memorandum dated December 22, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as the "Memorandum") relating to the Securities. The Company, the Guarantors and the Initial Purchaser will enter into a Registration Rights Agreement in arrears substantially the form attached as Exhibit A hereto (the "Registration Rights Agreement") prior to or concurrently with the issuance of the Notes. Pursuant to the Registration Rights Agreement, under the circumstances and the terms set forth therein, the Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "Commission"): (i) a registration statement on March 31, June 30, September 30, and December 31 Form S-4 (the "Exchange Offer Registration Statement") relating to a registered Exchange Offer (as defined in each year commencing on the Conversion Date, and at maturity or prior prepayment Registration Rights Agreement) for the Notes under the Act to offer to the holders of the Notes the opportunity to exchange their Notes for an issue of notes substantially identical to the Notes (except that such notes will not contain restrictions on transfer that would be registered under the Act (the "Exchange Notes"); or (ii) alternatively, in fullthe event that applicable interpretations of the Commission do not permit the Company and the Guarantors to effect the Exchange Offer or do not permit any holder (who is otherwise able to make the representations set forth in the Registration Rights Agreement and acquire the Exchange Notes) of the Notes to participate in the Exchange Offer, a shelf registration statement (the "Shelf Registration Statement") to cover resales of Notes by such holders who satisfy certain conditions relating to and including the provision of information in connection with the Shelf Registration Statement. The Company, the Guarantors and the Initial Purchaser will enter into an Appreciation Notes Registration Rights Agreement in substantially the form attached as Exhibit B hereto (the "Appreciation Notes Registration Rights Agreement") prior to or concurrently with the issuance of the Appreciation Notes. Pursuant to the Appreciation Notes Registration Rights Agreement, under the circumstances and the terms set forth therein, the Company and the Guarantors will agree to file with the Commission: (i) a registration statement on Form S-4 (the "Appreciation Notes Exchange Offer Registration Statement") relating to a registered Appreciation Notes Exchange Offer (as defined in the Appreciation Notes Registration Rights Agreement) for the Appreciation Notes under the Act to offer to the holders of the Appreciation Notes the opportunity to exchange their Appreciation Notes for an issue of notes substantially identical to the Appreciation Notes (except that such notes will not contain restrictions on transfer) that would be registered under the Act (the "Appreciation Exchange Notes"); or (ii) alternatively, in the event that applicable interpretations of the Commission do not permit the Company and the Guarantors to effect the Appreciation Notes Exchange Offer or do not permit any holder (who is otherwise able to make the representations set forth in the Appreciation Notes Registration Rights Agreement and acquire the Appreciation Exchange Notes) of the Appreciation Notes to participate in the Appreciation Notes Exchange Offer, a shelf registration statement (the "Appreciation Notes Shelf Registration Statement") to cover resales of Appreciation Notes by such holders who satisfy certain conditions relating to and including the provision of information in connection with the Appreciation Notes Shelf Registration Statement. The Company has authorized and the issuance to Guarantors will enter into a unit agreement (the Noteholders "Unit Agreement") dated as of the Convertible NotesClosing Date, and upon conversion thereofwith United States Trust Company of New York, as unit agent (the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares"Unit Agent").

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the Initial Purchasers $250,000,000 aggregate original principal amount of $30,000,000its 8 1/4% Senior Subordinated Notes due 2008 (the "Notes"). The Senior Subordinated Secured Convertible obligations of the Company under the Indenture (as hereinafter defined) and the Notes shall will be in unconditionally guaranteed (the form set forth "Guarantees"), on a joint and several basis, by each Subsidiary Guarantor. The Notes and the Guarantees are to be issued pursuant to the Indenture (the "Indenture"), to be dated December 14, 1998, among the Company, The Bank of New York, a New York corporation, as Exhibit 2.1 attached hereto trustee (the "Trustee"), and the Subsidiary Guarantors. The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. Securities." The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment sale of the Convertible Notes in full. The Convertible Notes shall Securities to the Initial Purchasers (the "Offering") will be convertible at any timemade without registration of the Securities under the Securities Act of 1933, as amended (the "Act") and the rules and regulations of the Securities and Exchange Commission (the "Commission") thereunder, in whole or in part, in reliance upon the sole discretion exemption therefrom provided by Section 4(2) of the Noteholder thereofAct. Holders of the Securities will have the benefits of a Registration Rights Agreement to be dated as of December 14, upon such Noteholder's delivery 1998 among the Issuers and the Initial Purchasers (the "Registration Rights Agreement"). In connection with the sale of notice the Securities, the Company has prepared an offering memorandum dated December 7, 1998 (including information incorporated by reference therein, the "Memorandum") setting forth or including a description of the terms of the Securities, the terms of the Offering, a description of the Company and any material developments relating to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on occurring after the date of conversion, the most recent financial statements included therein. The Securities are being issued and sold in connection with the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants repayment of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of certain indebtedness outstanding under the Company's Common Stock senior secured loan facility (as amended, the "Warrant SharesAmended Credit Agreement") exercisable at a price per share among the Company, Canadian Imperial Bank of $.01 (subject to adjustment)Commerce, in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually administrative agent, Merrxxx Xxxital Corporation, as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009documentation agent, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on other financial institutions party thereto, as lenders. This Agreement, the Convertible Note as of Securities, the Conversion Date Exchange Notes (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereofRegistration Rights Agreement), the Private Exchange Notes (as defined in the Registration Rights Agreement), the Registration Rights Agreement and the Warrants, and upon exercise of Indenture are herein collectively referred to as the Warrants the issuance and sale of the Warrant Shares"Offering Documents."

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the Company terms and conditions herein contained, the Parent and the Issuer propose to issue and sell to the Purchaser and the Other Purchasers (as defined below) in a direct private placement an aggregate of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the $40,000,000 aggregate principal amount of $29,995,000 Senior Secured Notes due 2010 of the Issuer (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "“Notes", which terms shall also include any notes delivered in exchange or replacement therefor”), and (ii) Common Stock Purchase Warrants approximately $10,000,000 of shares (the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion“Shares”) of the Company's Parent’s Common Stock Stock, par value $0.0006 per share (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Common Stock”). The Notes shall are to be issued under the indenture dated as of December 12, 2005, as supplemented by the First Supplemental Indenture dated as of December 22, 2005 and the Second Supplemental Indenture thereto dated as of or prior to the Closing Date and as otherwise supplemented or amended from time to time, (Ythe “Indenture”) payable on September 30by and among the Issuer, 2009the Parent, the Subsidiary Guarantors and The Bank of New York, as Trustee (the “Trustee”). The Notes will have the terms set forth in the Indenture and in the “Description of the Notes” attached hereto as Exhibit A, and will be secured obligations of the Issuer, unconditionally guaranteed (Zthe “Guarantees”) bear interest compounded quarterly (based on a 360-day year joint and several basis by the Parent and the Subsidiary Guarantors and secured by pledges of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as all of the Conversion Date stock or other ownership interests held by the Parent and the Issuer in their direct and indirect subsidiaries (but excluding the stock or other ownership interest held by the Parent or the Issuer in any “Unrestricted Subsidiary” (as defined in Section 2.2the Indenture)). The Notes, the Guarantees and the Shares are collectively referred to herein as the “Securities.” The Parent, the Issuer and the Subsidiary Guarantors propose to enter into purchase agreements substantially in the same form as this Agreement with certain other investors (the “Other Purchasers”) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment pursuant to which it expects to complete sales of the Notes in fullSecurities. The Company has authorized Purchaser and the issuance Other Purchasers are hereinafter sometimes collectively referred to as the Noteholders of “Purchasers,” and this Agreement and the Convertible agreements executed by the Other Purchasers are hereinafter sometimes collectively referred to as the “Agreements.” The Agreements, the Notes, and upon conversion thereofthe Shares, the Indenture, the Notes Registration Rights Agreement (as defined below) and the Warrantssecurity and collateral documents contemplated hereby or thereby are sometimes collectively referred to as the “Transaction Documents.” The Securities will be offered and sold to the Purchasers without registration under the Securities Act of 1933, and upon exercise of as amended (the Warrants “Act”), in reliance on an exemption pursuant to Section 4(2) in accordance with Rule 506 under the issuance and Act. In connection with the sale of the Warrant SharesSecurities, the Parent and the Issuer have prepared a Confidential Information Memorandum dated May 10, 2006 (as supplemented, the “Information Memorandum”), setting forth or incorporating by reference a description of the terms of the Securities, the terms of the offering of the Securities, and a description of the business of the Parent and the Issuer. Any references herein to the Information Memorandum shall be deemed to include all amendments and supplements thereto. The Purchasers will be entitled to the benefits of (i) the Notes Registration Rights Agreement, substantially in the form attached hereto as Exhibit B (the “Notes Registration Rights Agreement”), pursuant to which the Issuer, the Parent and the Subsidiary Guarantors shall agree, among other things, to file a registration statement or a pre-effective amendment to an existing registration statement (collectively referred to herein as the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) registering the Exchange Notes (as defined in the Notes Registration Rights Agreement) under the Act; and (ii) the registration rights contained in Section 7 of this Agreement pursuant to which the Parent has agreed, among other things, to file a registration statement with the Commission registering the resale of the Shares by the Purchasers.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $500,000,000 aggregate principal amount of $29,995,000 its 8-1/8% Senior Subordinated Notes due 2007, Series A (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes"" and, which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants together with the guarantee of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock each Guarantor (the "Warrant SharesGuarantee") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "WarrantsSecurities", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture (Ythe "Indenture") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of December 22, 1997 by and among the Conversion Date Company, the Guarantors and The Bank of New York, as trustee (the "Trustee"). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as defined amended (the "Act"), in Section 2.2) until due at reliance on exemptions therefrom. tion of the rate terms of 12% per annumthe Notes, payable in cash quarterly in arrears on March 31the terms of the offering of the Notes, June 30, September 30, a description of the Company and December 31 in each year commencing on any material developments relating to the Conversion Date, Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and at maturity or prior prepayment their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in full. The the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company has authorized agreed, among other things, to file with the issuance Securities and Exchange Commission (the "Commission") under the circumstances set forth therein (i) a registration statement (the "Registration Statement") under the Act relating to the Noteholders Company's 8-1/8% Senior Subordinated Notes due 2007, Series B (the "Exchange Notes"), to be offered in exchange for the Notes or (ii) a shelf registration statement pursuant to Rule 415 under the Act relating to the resale of the Convertible Notes by holders thereof or, if applicable, relating to the resale of debt securities of the Company substantially identical to the Exchange Notes (the "Private Exchange Notes, and upon conversion thereof, ") by the Initial Purchasers pursuant to an exchange of the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Sharesfor Private Exchange Notes.

The Securities. Subject to the terms and conditions herein contained, the Company shall issue and sell to the Initial Purchaser 294,118 Units (each a "Unit" and collectively, the "Units"), each consisting of one share of Amended Series A, Cumulative Convertible Preferred Stock, par value $1.00 per share, of the Company ("Amended Series A Preferred Stock") and one warrant (collectively, the "Warrants") to purchase initially 327 shares of the Company's Common Stock, par value $0.01 per share (the "Common Stock"), at an initial purchase price of $0.2063 per share. The Company has authorized terms of the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 Amended Series A Preferred Stock are set forth in the aggregate original principal amount certificate of $30,000,000the Company (the "151 Certificate") to be filed with the Secretary of State of Delaware pursuant to Section 151 of the Delaware General Corporation Law. A copy of the 151 Certificate, in substantially final form, has been delivered to the Initial Purchaser. The Senior Subordinated Secured Convertible Notes shall be in shares of Common Stock issuable upon conversion of the form set forth as Exhibit 2.1 attached hereto and Amended Series A Preferred Stock are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. Conversion Stock." The Convertible Notes shall (a) Warrants are to be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on issued under a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment Warrant Agreement to be dated as of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into Closing Date (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "NotesWarrant Agreement", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) benefit of the Company's holders from time to time of the certificates evidencing the Warrants. The shares of Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and issuable upon exercise of the Warrants are herein referred to as the issuance "Warrant Shares." The Amended Series A Preferred Stock, the Warrants and the Units are collectively referred to herein as the "Securities." The Securities will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated May 7, 1997 (the "Preliminary Memorandum"), and a final offering memorandum dated May 13, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), setting forth a description of the terms of the Securities, the terms of the offering of the Securities, and a description of the business of the Company and XCL-China. The Initial Purchaser and its direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company shall agree, among other things, (i) to file a shelf registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the resale of the Amended Series A Preferred Stock included in the Units, the Conversion Stock and the Warrant Shares and (ii) to grant certain "piggy-back" registration rights to the holders of the Conversion Stock and the Warrant Shares.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $50,000,000 aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible its 7% Senior Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock due 2014 (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Notes”). The Notes shall will be unconditionally guaranteed (Ythe “Guarantees”) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day monthssenior basis by the Subsidiary Guarantors. The Notes and the Guarantees are collectively referred to herein as the “Securities.” The Securities are to be issued under an indenture (the “Indenture”) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note dated as of March 22, 2004 by and among the Conversion Date Company, the Subsidiary Guarantors and U.S. Bank National Association, as Trustee (the “Trustee”), as amended by the First Supplemental Indenture dated as of July 20, 2004, the Second Supplemental Indenture dated as of November 5, 2004 and the Third Supplemental Indenture to be dated on or prior to the Closing Date. The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum dated November 28, 2005 (the “Preliminary Memorandum”) and a final offering memorandum dated November 28, 2005 (the “Final Memorandum”; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a “Memorandum”) setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. Any reference herein to the Preliminary Memorandum or the Final Memorandum shall be deemed to refer to and include the documents incorporated by reference therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Company and the Subsidiary Guarantors have agreed, among other things, to use their best efforts to file a registration statement (the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) registering the Securities or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance Initial Purchasers $242,500,000 aggregate principal amount at maturity of its Senior Subordinated Secured Convertible Notes due September 30Discount Notes, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall Series A (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture (Ythe "Indenture") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note to be dated as of February 20, 1998 by and between the Conversion Date Company and United States Trust Company of New York, as Trustee (the "Trustee"). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Notes, the Company has prepared a preliminary offering memorandum dated January 27, 1998 (the "Preliminary Memorandum") and a final offering memorandum dated February 13, 1998 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company has agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Notes or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate Act. The Notes are being issued in connection with the consummation of 12the transactions contemplated in the Stock Purchase Agreement, dated as of December 18, 1997 (the "Stock Purchase Agreement") among Tidewater, Inc. ("Tidewater") and the Company, pursuant to which the Company will acquire 100% per annumof the voting securities of Tidewater Compression Service, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on Inc. from Tidewater (the Conversion Date, and at maturity or prior prepayment "Acquisition") for a purchase price of $360 million (the "Purchase Price"). The Company will fund the Purchase Price with (i) the gross proceeds of the Notes in full. The offered hereby; (ii) an aggregate equity contribution of $105 million (the "Equity Contribution") from Universal Compression Holdings, Inc. ("Holdings"), the Company's parent, derived from an $81 million cash contribution from Xxxxxx Xxxxxx Partners III, L.P. ("CHP") (which organized both the Company has authorized and Holdings and is the controlling stockholder of Holdings) and other parties to Holdings (the "Cash Contribution") and $24 million net proceeds from the issuance to the Noteholders of the Convertible Holdings senior discount notes due 2009 ("Holdings Notes"); and (iii) a Term Loan Credit Facility of $75 million and a Revolving Credit Facility of $85 million ($38 million of which will be drawn at the closing of the Acquisition), each with Bankers Trust Company, as agent, and upon conversion thereof, other lending institutions (the "Credit Agreement"). Immediately following the issuance of the Notes and the Warrants, and upon exercise completion of the Warrants Acquisition, the issuance Company will be merged (the "Merger") pursuant to a Merger Agreement (the "Merger Agreement") with and sale of into Tidewater Compression Service, Inc., which will change its name to Universal Compression, Inc. The Stock Purchase Agreement, the Warrant Shares.Credit Agreement and the Merger Agreement are collectively referred to herein as the "Transaction Documents". All references in this Agreement to the "Company" mean Universal Compression, Inc.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $25,000,000 aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible its 7.375% Senior Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock due 2019 (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Notes”). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note are to be issued under that certain Indenture dated as of the Conversion Date January 28, 2011, as supplemented by that certain First Supplemental Indenture dated as of May 6, 2011 and that certain Second Supplemental Indenture dated as of January 15, 2013 (as defined in Section 2.2) until due at supplemented, the rate of 12% per annum“Indenture”), payable in cash quarterly in arrears on March 31by and among the Company, June 30the Guarantors and Xxxxx Fargo Bank, September 30National Association, and December 31 in each year commencing on as Trustee (the Conversion Date, and at maturity or prior prepayment of the Notes in full“Trustee”). The Company has authorized previously issued $250,000,000 in aggregate principal amount of its 7.375% Senior Notes due 2019 under the Indenture (the “Existing Notes”). The Notes constitute an issuance to of “Additional Notes” under the Noteholders of Indenture. Except as otherwise described in the Convertible Notes, and upon conversion thereofPricing Disclosure Package (as defined below), the Notes will have identical terms to the Existing Notes and will be treated as a single class of notes for all purposes under the WarrantsIndenture. The payment of principal, premium, if any, and upon exercise interest on the Notes will be fully and unconditionally guaranteed (the “Guarantees” and, together with the Notes, the “Securities”) on a senior unsecured basis, jointly and severally, by the Guarantors. The Securities will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the Warrants “Act”), in reliance on exemptions therefrom. In connection with the issuance and sale of the Warrant Shares.Securities, the Company and the Guarantors have prepared a preliminary offering memorandum dated November 19, 2014 (the “Preliminary Memorandum”) setting forth or including a description of the terms of the Securities and the terms of the offering of the Securities, a description of the Company and any material developments

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto proposes to issue and are herein referred sell to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall each Purchaser (a) be payable the number of shares of its Series E Cumulative Convertible Preferred Stock (the "Series E Preferred Stock") set forth on September 30the signature page of such Purchaser hereto, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annumwarrant, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, substantially in the form set forth attached hereto as Exhibit 2.1(i) attached hereto A (referred to herein individually as a "Note" and collectively as the "NotesWarrants", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock acquire 50 shares (the "Warrant Shares") exercisable at a price per of the Company's common stock, no par value (the "Common Stock"), for each share of $.01 Series E Preferred Stock purchased. The rights, preferences, privileges and restrictions of the Series E Preferred Stock are set forth in the Form of Certificate of Determination attached hereto as Exhibit B (subject the "Series E Certificate of Determination"). Each share of Series E Preferred Stock shall be, at the option of the holder, convertible into shares (the "Conversion Shares") of Common Stock as provided in the Series E Certificate of Determination. The shares of Series E Preferred Stock and the Warrants are sometimes herein collectively referred to adjustmentas the "Securities". The Securities will be offered and sold to the Purchasers without such offers and sales being registered under the Securities Act of 1933, as amended (together with the rules and regulations of the Securities and Exchange Commission (the "Commission") promulgated thereunder, the "Securities Act"), in reliance on exemptions therefrom. In connection with the form set sale of the Securities, (i) the Company has made available its periodic reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934 since January 1, 2001, and all amendments thereto, and (ii) the Company has prepared an Executive Summary dated January 25, 2002 (the "Executive Summary") and a slide presentation dated January 25, 2002 (the "Slide Presentation") setting forth as Exhibit 2.1(ii) attached hereto (certain information with respect to the Company and the offering of the Securities. These reports, filings and amendments, along with the Executive Summary and Slide Presentation, are collectively referred to herein individually as a "Warrant" and collectively as the "WarrantsDisclosure Documents", . All references in this Agreement to financial statements and schedules and other information which terms is "contained," "included" or "stated" in the Disclosure Documents (or other references of like import) shall also be deemed to mean and include any warrants delivered all such fi- nancial statements and schedules and other information which is incorporated by reference in exchange or replacement therefor)the Disclosure Documents. The Notes shall Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement to be dated as of March 29, 2002 among the parties hereto (Ythe "Registration Rights Agreement") payable on September 30pursuant to which the Company has agreed, 2009among other things, and to file a shelf registration statement (Zthe "Shelf Registration Statement") bear interest compounded quarterly (based on a 360-day year pursuant to Rule 415 under the Securities Act of twelve 30-day months) on 1933 relating to the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as resale of the Conversion Date (as defined in Section 2.2) until due at Shares and the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in fullWarrant Shares by holders thereof. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereofThis Agreement, the Notes and Registration Rights Agreement, the Warrants, and upon exercise the Engagement Letter (the "Engagement Letter") dated as of March 29, 2002 with Roth Capital Partners, LLC (the Warrants "Placement Agent") are herein collectixxxx referred to as the issuance and sale of the Warrant Shares"Basic Documents".

The Securities. Subject to the terms and conditions herein contained, the Trust proposes to issue and sell to the Initial Purchasers 55,000,000 Mandatory Exchangeable Trust Securities of the Trust (the “Firm Securities”) and, at the election of the Initial Purchasers pursuant to their option to purchase referred to in Section 3 hereof, up to 11,000,000 additional Mandatory Exchangeable Trust Securities of the Trust (the “Option Securities”). The Company has authorized Firm Securities and the issuance Option Securities are herein collectively called the “Securities”. Each Security is to be delivered pursuant to an amended and restated trust agreement, dated the date hereof, among Xxxx X. Xxxxxxx, as settlor or trustor, Xxxxxxx X. Xxxxxxx, as the prior trustee, and Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx III and Xxxxx X. X’Xxxxx, as trustees of its Senior Subordinated Secured Convertible Notes due September 30the Trust (the “Trust Agreement”). Each Security will be exchangeable on or, 2009 in certain circumstances, prior to, the first Scheduled Trading Day (as defined in the aggregate original principal amount Pricing Disclosure Package) after June 1, 2019 (the “Exchange Date”) (i) for the relevant exchange property (which will initially be 1.3040 American Depositary Shares (the “ADSs”), each ADS representing one ordinary share, par value US$0.000025 per share (the “Ordinary Shares”), of $30,000,000Alibaba Group Holding Limited, an exempted company with limited liability incorporated in the Cayman Islands (the “Issuer”)) or (ii), following the Shareholder’s (as defined below) election under the forward purchase agreement, to be dated on or prior to the First Closing Date (the “Forward Purchase Agreement”), between the Trust and West Raptor Holdings, LLC (the “Shareholder”), a limited liability company organized under the laws of the State of Delaware and an indirect subsidiary of SoftBank Group Corp., a company incorporated under the laws of Japan (the “Shareholder Parent”), for cash, in each case as described in the Pricing Disclosure Package (as defined below). The Senior Subordinated Secured Convertible Notes shall be in Trust will enter into the form set forth as Exhibit 2.1 attached hereto Forward Purchase Agreement with the Shareholder pursuant to which the Shareholder will agree to sell, and are herein referred the Trust will agree to individually as a "Convertible Note" and collectively as purchase, the "Convertible Notes"number of ADSs deliverable by the Shareholder on, which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall immediately prior to, the Exchange Date, subject to (ai) be payable on September 30, 2009 the Shareholder’s election to cash settle its obligations under the Forward Purchase Agreement and (bii) bear interest compounded quarterly acceleration (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock Shareholder’s obligations under the Forward Purchase Agreement, including at the Shareholder’s election or as a result of certain events. The Shareholder’s obligations under the Forward Purchase Agreement will be secured by a pledge of Ordinary Shares pursuant to the terms of a collateral agreement, to be dated on or prior to the First Closing Date(as defined below), among the Shareholder, U.S. Bank National Association, as Collateral Agent (the "Warrant Shares"“Collateral Agent”) exercisable at a price per share and the Trust (the “Collateral Agreement”). The Securities will be offered and sold to the Initial Purchasers without being registered under the United States Securities Act of $.01 1933, as amended (subject to adjustmentthe “Act”), in reliance on exemptions therefrom. In connection with the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as sale of the Securities, the Trust has prepared a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note preliminary offering circular dated as of May 31, 2016 (the Conversion Date “Preliminary Circular”), setting forth or including a description of the terms of the offering, the Securities, the Trust’s Investment Objective and Policies and a description of the Trust, among other things. Annex A to the Preliminary Circular and the Final Circular (as defined in Section 2.2below) until due at consists of the rate of 12% per annum, payable in cash quarterly in arrears Issuer’s annual report on Form 20-F for the fiscal year ended March 31, June 302016 (including the documents incorporated by reference therein) (such Annex A, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity including any amendment or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereofsupplement thereto, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares“Issuer Disclosure”).

The Securities. The Company has authorized the issuance This Supplemental Indenture hereby establishes a series of its Securities, known as and entitled "6 1/8% Senior Subordinated Secured Convertible Notes due September 30, 2009 in the 2008." The aggregate original principal amount of the Securities shall be limited initially to Two Hundred Million Dollars ($30,000,000200,000,000) (except for Senior Notes authenticated and delivered upon transfer of, or in exchange for, or in lieu of, other Senior Notes); provided that the Company may, without the consent of the Holders, "reopen" the series of Senior Notes so as to increase the aggregate principal amount of the Senior Notes in compliance with the procedures set forth in the Original Indenture, including Section 3.1 and Section 3.3 thereof, and subject to limitations, if any, on the Company's ability to issue Collateral Bonds securing the additional Senior Notes, so long as any such additional Senior Notes have the same tenor and terms as the Senior Notes then Outstanding. The Senior Subordinated Secured Convertible Notes shall be are not subject to repayment at the option of Holders thereof and are not subject to any sinking fund. As provided in the form set forth as Exhibit 2.1 of Senior Notes attached hereto and as Appendix I, the Senior Notes are herein referred subject to individually optional redemption, as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, by the Company prior to the Stated Maturity of the principal thereof on the terms set forth therein. Except as modified in the sole discretion form of the Noteholder Senior Notes, redemptions shall be effected in accordance with Article Twelve of the Original Indenture. The Senior Notes shall have such other terms and provisions as are set forth in the form of the Senior Notes attached hereto as Appendix I (which is incorporated by reference in and made a part of this Supplemental Indenture as if set forth in full at this place). The Senior Notes shall be issuable only in fully registered form and, as permitted by Section 3.1 and Section 3.2 of the Original Indenture, in denominations of $1,000 and integral multiples thereof. The Senior Notes will initially be issued in global form (the "Global Notes") under a book-entry system, upon registered in the name of The Depository Trust Company, as depository ("DTC"), or its nominee, which is hereby designated as "U.S. Depositary" under the Indenture. Further to Section 3.5 of the Original Indenture, any Global Note shall be exchangeable for Senior Notes registered in the name of, and a transfer of a Global Note may be registered to, any Person other than the U.S. Depositary for such Noteholder's delivery of notice to the Company of Senior Note or its intent to convert, into nominee only if (i) such U.S. Depositary notifies the Company that it is unwilling or unable to continue as U.S. Depositary for such Global Note or if at any time such U.S. Depositary ceases to be a clearing agency registered under the Exchange Act, and, in either such case, the Company does not appoint a successor U.S. Depositary within 90 days thereafter, (ii) the Company executes and delivers to the Trustee a Company Order that such Global Note shall be so exchangeable and the transfer thereof so registrable or (iii) there shall have occurred and be continuing an Event of Default or an event which, with the giving of notice or lapse of time, or both, would constitute an Event of Default with respect to the Senior Subordinated Secured Notes. Upon the occurrence in respect of any Global Note of any or more of the conditions specified in clause (i), (ii) or (iii) of the preceding sentence, such Global Note may be exchanged for Senior Notes due September 30, 2009 registered in the aggregate principal amount name of, and the transfer of $29,995,000 such Global Note may be registered to, such Persons (or including Persons other than the U.S. Depositary and its nominees) as such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversionU.S. Depositary, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor)case of an exchange, and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as case of a "Warrant" and collectively as the "Warrants"transfer, which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Sharesdirect.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $100,000,000 aggregate principal amount of $29,995,000 the Company's 12% Senior Subordinated Notes due 2008 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes"). The Notes will be guaranteed (collectively, the "Guarantees") upon consummation of the Merger (as defined below) on a senior subordinated basis by each of ATC's Subsidiaries listed on the signature pages hereof (collectively, and together with any subsidiary that in the future executes a supplemental indenture pursuant to which terms such subsidiary agrees to guarantee the Notes, the "Guarantors"). The Notes and the Guarantees are collectively referred to herein as the "Securities." The Securities are to be issued under an indenture (the "Indenture") dated as of January 29, 1998 by and between the Company and State Street Bank and Trust Company, as trustee (the "Trustee"). The term "Credit Agreement" as used herein shall also include any notes delivered have the meaning provided therefor in exchange or replacement thereforthe Indenture. The Company, Acquisition Holdings, Inc. ("Holdings") and ATC Group Services, Inc. ("ATC") have entered into a Merger Agreement dated as of November 26, 1997 (as in effect on the date hereof, the "Merger Agreement") pursuant to which the Company has offered to purchase (the "Tender Offer"), and pursuant to the terms of that certain Offer to Purchase dated December 4, 1997 (ii) Common Stock Purchase Warrants as in effect on the date hereof, the "Offer to Purchase"), all of the Company for outstanding shares (the purchase (subject to adjustment as provided for therein"Shares") of an aggregate common stock, par value $0.01 per share, of 210.016 ATC. Pursuant to the Merger Agreement, the Company will be merged into and with ATC (or such lower amount determined on the "Merger"), with ATC as the surviving corporation. Upon effectiveness of the Merger (the "Effective Time"), ATC will execute and deliver a pro-rata basis in supplemental indenture (the event of any in part conversion"Supplemental Indenture") to the Indenture, expressly assuming all of the Company's Common Stock obligations under the Indenture. Also at the Effective Time, the Company will cause the Guarantors to execute and deliver the Supplemental Indenture, the Guarantees, this Agreement and the Registration Rights Agreement (as defined below). The Securities will be offered and sold to you without being registered under the Securities Act of 1933, as amended (the "Warrant SharesAct") exercisable at a price per share of $.01 (subject to adjustment), in reliance on exemptions therefrom. In connection with the form set forth as Exhibit 2.1(iisale of the Securities, the Company has prepared a preliminary offering memorandum dated January 2, 1998 (the "Preliminary Memorandum") attached hereto and a final offering memorandum dated January 22, 1998 (the "Final Memorandum," the Preliminary Memorandum and the Final Memorandum each herein being referred to herein individually as a "Warrant" and collectively as the Memorandum"Warrants", which terms shall also include any warrants delivered in exchange ) setting forth or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on including a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as description of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment terms of the Notes in full. The Company has authorized Securities, the issuance terms of the offering of the Securities, descriptions of the Company, Holdings, ATC and its subsidiaries and any material developments relating to the Noteholders Company, Holdings and ATC occurring after the date of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Sharesmost recent historical financial statements included therein.

The Securities. The Subject to the terms and conditions herein -------------- contained, the Company has authorized proposes to issue and sell to the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as Initial Purchasers (the "Convertible NotesOffering", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the $200,000,000 aggregate principal amount of $29,995,000 its 10 1/2% Senior -------- Subordinated Notes due 2009 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor). The Notes will be unconditionally ----- guaranteed (the "Guarantees", and (iitogether with the Notes, the "Securities") Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on ---------- ---------- a pro-rata senior subordinated basis in the event of any in part conversion) by all of the Company's Common Stock subsidiaries (the "Warrant SharesGuarantors" and collectively with the Company, the "Issuers"). The Securities ----------- ------- are to be issued under an indenture (the "Indenture") exercisable at a price per share to be dated as of $.01 --------- April 30, 1999 by and between the Issuers and IBJ Whitehall Bank & Trust Company, as Trustee (subject the "Trustee"). ------- The Securities will be offered and sold to adjustmentthe Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. --- In connection with the form set forth as Exhibit 2.1(ii) attached hereto sale of the Securities, the Company has prepared a preliminary offering memorandum dated April 6, 1999 (the "Preliminary ----------- Memorandum"), and a final offering memorandum dated April 23, 1999 (the "Final ---------- ----- Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein ---------- being referred to herein individually as a "Warrant" Memorandum") relating to the Company, the Guarantors and ---------- the Securities. The Notes are being sold in connection with the Company's tender offer for up to 25.5 million shares of its outstanding common stock, including shares underlying stock options (the "Tender Offer"), pursuant to the Company's offer ------------ to purchase dated February 19, 1999, as amended. The Company and the Guarantors will enter into an agreement (the "Credit Agreement") with Bankers Trust Company, as agent, and certain lenders ----------------- thereto whereby the Company will be provided with a $225 million revolving credit facility and a $125 million term loan. The Company has entered into an agreement with Boss Investment, LLC ("Boss Investment"), an affiliate of Apollo Management, L.P., pursuant to which the Company has agreed to issue and sell to Boss Investment $100 million aggregate principal amount of its 7 1/2% Convertible Junior Subordinated Notes (the "Convertible Subordinated Notes"). The Offering, the Tender Offer, the sale of the Convertible Subordinated Notes and the related borrowings under the Credit Agreement are collectively referred to as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). Transactions." ------------ The Notes shall (Y) payable on September 30, 2009, Initial Purchasers and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as their direct and indirect transferees of the Conversion Date Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the --------- "Registration Rights Agreement"), pursuant to which the Issuers have agreed, ------------------------------ among other things, to file a registration statement (the "Registration ------------ Statement") with the Securities and Exchange Commission (the "Commission") --------- ---------- registering the Securities or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $150,000,000 aggregate principal amount of $29,995,000 its 10% Senior Subordinated Notes due 2008 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall are to be issued under an indenture (Ythe "Indenture") payable on September 30to be dated as of July 31, 20091998 by and among the Company, each of the Guarantors party thereto from time to time, and Norwest Bank Minnesota, National Association, as trustee (the "Trustee"). The Notes are being issued and sold in connection with the recapitalization of the Company (the "Recapitalization") pursuant to the Agreement and Plan of Merger, dated June 23, 1998 (the "Merger Agreement"), between Globe Acquisition Company and Globe Manufacturing Co. (to be renamed Globe Holdings, Inc. in connection with the transactions described below), a Massachusetts corporation ("Globe Holdings"). The Recapitalization will be financed by (i) the proceeds from the issuance of the Notes, (ii) proceeds from an investment by Code, Xxxxxxxx & Xxxxxxx III, L.P. and certain other investors in Globe Holdings, and (Ziii) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on borrowings under the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date Senior Credit Facility (as defined in Section 2.2) until due at the rate Final Memorandum). The Notes will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 12% per annum1933, payable as amended (the "Securities Act"), in cash quarterly in arrears reliance on March 31exemptions therefrom. In connection with the sale of the Notes, June 30the Company has prepared a preliminary offering memorandum dated July 15, September 301998 (the "Preliminary Memorandum"), and December 31 the Company will prepare a final offering memorandum dated July 28, 1998 (the "Final Memorandum"); the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") setting forth or including a description of the terms of the Notes, the terms of the offering of the Notes, a description of the Company and the Company's subsidiary listed in each year commencing on Schedule 1 attached hereto (the Conversion Date, "Subsidiary") and at maturity or prior prepayment any material developments relating to the Company and the Subsidiary occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in full. The the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company has authorized agreed, among other things, to file a registration statement (the issuance "Registration Statement") with the Securities and Exchange Commission (the "Commission") in order to the Noteholders of the Convertible Notes, and upon conversion thereof, register the Notes and or the Warrants, and upon exercise of Exchange Notes (as defined in the Warrants Registration Rights Agreement) under the issuance and sale of the Warrant SharesSecurities Act.

The Securities. Subject to the terms and conditions herein contained, the Company proposes to issue and sell to the Initial Purchaser $88,000,000 aggregate principal amount at maturity (approximately $50,273,037 gross proceeds) of its 13 1/4 % Senior Discount Notes due 2011 (the “Securities”). The Securities are to be issued under an indenture (the “Indenture”) to be dated as of February 4, 2004 by and between the Company and BNY Trust Midwest Company, as Trustee (the “Trustee”). The Securities will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Company has authorized prepared a preliminary offering memorandum dated January 22, 2004 (the issuance “Preliminary Memorandum”) and a final offering memorandum dated January 28, 2004 (the “Final Memorandum”; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a “Memorandum”) setting forth or including a description of the terms of the Securities, a description of the Company and its Senior Subordinated Secured Convertible Notes due September 30, 2009 in subsidiaries and any material developments relating to the aggregate original principal amount Company and its subsidiaries occurring after the date of $30,000,000the most recent historical financial statements included therein. The Senior Subordinated Secured Convertible Notes shall Initial Purchaser and its direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form set forth attached hereto as Exhibit 2.1 attached hereto and are herein referred A (the “Registration Rights Agreement”), pursuant to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent has agreed, among other things, to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on file a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock registration statement (the "Warrant Shares"“Registration Statement”) exercisable at a price per share of $.01 with the Securities and Exchange Commission (subject to adjustment), in the form set forth as Exhibit 2.1(ii“Commission”) attached hereto (referred to herein individually as a "Warrant" and collectively as registering the "Warrants", which terms shall also include any warrants delivered in exchange Securities or replacement therefor). The the Exchange Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate Act. In connection with the offering of 12% per annumthe Securities, payable in cash quarterly in arrears on March 31certain Subsidiaries of the Company will seek an amendment or waiver to (the “Amendment”) the amended and restated credit agreement, June 30dated as of May 23, September 302003, by and December 31 in each year commencing among SportRack, LLC, Valley Industries, LLC, Brink B.V., the other persons as designated as “Credit Parties” on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion signature pages thereof, the Notes and the Warrantsfinancial institutions party thereto as Lenders, including without limitation, Antares Capital Corporation, Xxxxxxx Xxxxx Capital, and upon exercise of General Electric Capital Corporation (the Warrants the issuance and sale of the Warrant Shares“Credit Agreement”).

The Securities. The Company has authorized Subject to the issuance terms and conditions herein contained, the Issuers propose to issue and sell to the Initial Purchaser (the “Offering”) $207,000,000 principal amount at maturity (approximately $150,101,910 gross proceeds) of its 10 3/4% Senior Subordinated Secured Convertible Discount Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor“Notes”). The Notes shall will be issued pursuant to the terms of an indenture (Ythe “Indenture”) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on to be dated the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Closing Date (as defined in Section 2.2) until due at 3 below), by and among the rate Issuers, the Guarantors and The Bank of 12% per annumNew York, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on as trustee (the Conversion Date, and at maturity or prior prepayment of the Notes in full“Trustee”). The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, Issuers’ obligations under the Notes and the Warrants, and upon exercise Indenture will be unconditionally guaranteed (the “Guarantees”) on a senior secured basis by each of the Warrants Guarantors. The Notes and the issuance Guarantees are collectively referred to as the “Securities.” The Securities will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the “Act”), in reliance on exemptions therefrom. In connection with the sale of the Warrant SharesSecurities, the Issuers have prepared a preliminary offering memorandum dated April 29, 2004 (the “Preliminary Memorandum”) and a final offering memorandum dated May 11, 2004 (the “Final Memorandum”; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a “Memorandum”) setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Issuers and the Guarantors and any material developments relating to the Issuers and the Guarantors occurring after the date of the most recent historical financial statements included therein. The Initial Purchaser and its direct and indirect transferees of the Securities will be entitled to the benefits of the Security Documents (as defined in the Final Memorandum) and a registration rights agreement, substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Issuers and the Guarantors will agree to file with the Securities and Exchange Commission (the “Commission”) (a) under the circumstances set forth in the Registration Rights Agreement, a registration statement under the Act relating to a new issue of debt securities with terms identical to the terms of the Securities other than the restrictions on transfer (the “Exchange Securities” which term includes the guarantees related thereto) to be offered in exchange for the Securities (the “Exchange Offer”) and issued under the Indenture or an indenture substantially similar to the Indenture and (b) under certain circumstances set forth in the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 under the Act relating to the resale by certain holders of the Securities. Pursuant to the Security Documents, the Issuers and the Guarantors have agreed, among other things, to grant to Deutsche Bank Trust Company Americas, as collateral agent, (the “Collateral Agent”) for the benefit of the Trustee and the holders of the Securities a second priority security interest in and lien on the Collateral (as defined in the Final Memorandum), subject to certain exceptions and otherwise in accordance with the terms of the Indenture and the Security Documents and as described in the Memorandum.

The Securities. The Company has authorized Subject to the issuance of its Senior Subordinated Secured Convertible Notes due September 30terms and conditions herein contained, 2009 in the Issuer proposes to issue and sell to the Initial Purchasers $115,000,000 aggregate original principal amount of $30,000,000its 8-7/8% Senior Notes due 2005 (the "Notes"). The Senior Subordinated Secured Convertible Notes shall will be in guaranteed (collectively, the form set forth as Exhibit 2.1 attached hereto "Guarantees") on a senior basis by the Parent and on a senior basis by the Subsidiary Guarantor. The Notes and the Guarantees are herein collectively referred to individually herein as the "Securities". The Securities are to be issued under an indenture (the "Indenture") to be dated as of August 1, 1997 by and among the Issuer, the Guarantors and Crestar Bank, as Trustee (the "Trustee"). All of the issued and outstanding capital stock of the Issuer and the Subsidiary Guarantor will be pledged by the Company to the Trustee for the benefit of holders of the Notes. On or prior to the Closing Date (as defined below), the Issuer will execute a new credit facility with a commitment of not less than $170 million among the Issuer and two of its subsidiaries, as borrowers, Deutsche Bank A.G. as agent and Bankers Trust Commercial Corporation as co-agent (the "Global Bank Facility"). The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions therefrom. In connection with the sale of the Securities, the Issuer and the Guarantors have prepared a preliminary offering memorandum dated July 10, 1997 (the "Preliminary Memorandum"), and a final offering memorandum dated July 25, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Convertible NoteMemorandum") setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Global Bank Facility, a description of the Issuer and the Guarantors and any material development relating to the Issuer and the Guarantors occurring after the date of the most recent historical financial statements included therein. The Issuer and the Guarantors understand that the Initial Purchasers propose to make an offering of the Notes only on the terms and in the manner set forth in the Final Memorandum and Section 8 hereof as soon as the Initial Purchasers deem advisable after this Agreement has been executed and delivered, to persons in the United States whom the Initial Purchasers reasonably believe to be qualified institutional buyers ("QIBs") as defined in Rule 144A under the Act, as such rule may be amended from time to time ("Rule 144A"), in transactions under Rule 144A, and to a limited number of other institutional "accredited investors" ("Accredited Investors") as defined in Rule 501(a)(1), (2), (3) and (7) under Regulation D of the Act in private sales exempt from registration under the Act, and outside the United States to certain persons in reliance on Regulation S under the Act. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement to be dated as of the Closing Date (as defined) (the "Registration Rights Agreement"), pursuant to which the Issuer and the Guarantors will agree, among other things, (i) to file with the Securities and Exchange Commission (the "Commission"), under the circumstances set forth therein, a registration statement under the Act (the "Exchange Offer Registration Statement"), relating to Senior Notes due 2005 of the Issuer (the "Exchange Notes") to be offered in exchange (the "Exchange Offer") for the Notes, (ii) as and to the extent required by the Registration Rights Agreement, to file with the Commission 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 Notes, and to use its best efforts to cause such Registration Statements to be declared effective and (iii) to issue and deliver Private Exchange Notes (as defined in the Registration Rights Agreement) pursuant to the Private Exchange (as defined in the Registration Rights Agreement) to any Initial Purchaser holding Notes having the status of an unsold allotment. This Purchase Agreement (this "Agreement"), the Notes, the Guarantees, the Exchange Notes, the Private Exchange Notes, the Indenture and the Registration Rights Agreement are hereinafter referred to collectively as the "Convertible NotesOperative Documents.", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein -------------- contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchasers $250,000,000 aggregate principal amount of $29,995,000 its 12% Senior Subordinated Notes due 2010, Series A (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be unconditionally guaranteed ----- (Ycollectively the "Guarantees") payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as senior subordinated basis by each of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full---------- Subsidiary Guarantors. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the WarrantsGuarantees are collectively referred to herein as the "Securities." The Securities are to be issued under an indenture ---------- (the "Indenture") to be dated as of July 21, 2000 by and upon exercise among the Company, the --------- Subsidiary Guarantors and Bankers Trust Company, as Trustee (the "Trustee"). ------- The Securities will be offered and sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the Warrants "Act"), in reliance on exemptions therefrom. --- In connection with the issuance and sale of the Warrant SharesSecurities, the Company has prepared a preliminary offering memorandum dated June 26, 2000 (the "Preliminary Memorandum") and a final offering memorandum ---------------------- dated July 18, 2000 (the "Final Memorandum"; the Preliminary Memorandum and the ---------------- Final Memorandum each herein being referred to as a "Memorandum") setting forth ---------- or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company and its subsidiaries and any material developments relating to the Company and the Subsidiary Guarantors occurring after the date of the most recent historical financial statements included therein. The Initial Purchasers and their direct and indirect transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the --------- "Registration Rights Agreement"), pursuant to which the Company and the ----------------------------- Subsidiary Guarantors have agreed, among other things, to file a registration statement (the "Registration Statement") with the Securities and Exchange ---------------------- Commission (the "Commission") registering the Notes or the Exchange Notes (as ---------- defined in the Registration Rights Agreement) under the Act.

The Securities. The Company has authorized the issuance of its Senior Subordinated Secured Convertible Notes due September 30, 2009 in the aggregate original principal amount of $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as the "Convertible Notes", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice Subject to the terms and conditions herein -------------- contained, the Company of its intent proposes to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in issue and sell to the Initial Purchaser $100,000,000 aggregate principal amount of $29,995,000 its []% Senior Subordinated Notes, Series A due 2008 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes are to be issued under an indenture ----- (the "Indenture") to be dated as of May 5, 1998 by and between the Company, the --------- Subsidiary Guarantors and American National Bank and Trust Company of Chicago, as Trustee (the "Trustee"). The Notes will be guaranteed on a senior ------- subordinated basis by the Subsidiary Guarantors, pursuant to their guarantee (the "Guarantees"). The Notes and the Guarantees are hereinafter collectively ---------- referred to as the "Securities." Capitalized terms used but not defined herein ---------- shall have the meanings given to such terms in the Indenture. The Notes will be offered and sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (Ythe "Act"), in reliance on exemptions --- therefrom. In connection with the sale of the Notes, the Issuers have prepared a preliminary offering memorandum dated April 20, 1998 (the "Preliminary ----------- Memorandum") payable and a final offering memorandum dated the date hereof (the "Final ---------- ----- Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein ---------- being referred to as a "Memorandum"), each setting forth or including ---------- descriptions of the terms of the Notes, the terms of the Offering (as defined below), the transactions contemplated thereby and hereby (the "Transactions"), the Issuers and any material developments relating to the ------------ Issuers and their Subsidiaries as such term is defined in Section 1-02(x) of Regulation S-X promulgated under the Act (a "Subsidiary") occurring after the ---------- date of the most recent historical financial statements included therein. The Issuers understand that the Initial Purchaser proposes to make an offering of the Notes (the "Offering") only on September 30the terms and in the manner set -------- forth in the Final Memorandum and Section 8 hereof as soon as the Initial Purchaser deems advisable after this Agreement has been executed and delivered, 2009to persons in the United States whom the Initial Purchaser reasonably believes to be qualified institutional buyers ("Qualified Institutional Buyers" or ------------------------------ "QIBs") as defined in Rule 144A under the Act, as such rule may be amended from ---- time to time ("Rule 144A"), in transactions under Rule 144A; to a limited number --------- of other institutional "accredited investors" ("Accredited Investors") as -------------------- defined in Rule 501(a)(1), (2), (3) and (Z7) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as under Regulation D of the Conversion Act in private sales exempt from registration under the Act; and outside the United States to certain persons in reliance on Regulation S under the Act. The Initial Purchaser and any direct and indirect transferees of the Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights --------- ------------------- Agreement"), to be dated the Closing Date (as defined in Section 2.23 below), --------- pursuant to which the Issuers will agree, among other things, to file a registration statement (the "Registration Statement") until due at with the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, Securities and December 31 in each year commencing on ---------------------- Exchange Commission (the Conversion Date, and at maturity or prior prepayment of "Commission") registering the Notes or the Exchange ---------- Notes (as defined in full. The Company has authorized the issuance to Registration Rights Agreement) under the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant SharesAct.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance Initial Purchasers $155,000,000 aggregate principal amount of its Senior Subordinated Secured Convertible Notes, the terms of which will be substantially identical to the Company's 11% Senior Subordinated Notes due September 302005, 2009 which were issued in a registered offering on June 14, 1995 (the aggregate original principal amount of $30,000,000"Notes"). The Senior Subordinated Secured Convertible Notes shall will be in unconditionally guaranteed (the form set forth as Exhibit 2.1 attached hereto "Guarantees") on a joint and sev- 2 -2- eral basis, by the Subsidiary Guarantors. The Notes and the Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible NotesSecurities", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) are to be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for therein) of issued under an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock indenture (the "Warrant SharesIndenture") exercisable at a price per share to be dated March 26, 1997, by and among the Company, the Subsidiary Guarantors and United States Trust Company of $.01 New York, as trustee (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "WarrantsTrustee", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall will be offered and sold to the Initial Purchasers without such offers and sales being registered under the Securities Act of 1933, as amended (Y) payable the "Act"), in reliance on September 30exemptions therefrom. In connection with the sale of the Notes, 2009the Company has prepared a preliminary offering memorandum dated March 1997 and distributed on March 19, 1997 (the "Preliminary Memorandum"), and a final offering memorandum dated March 21, 1997 (Zthe "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum") bear interest compounded quarterly (based on setting forth or including a 360-day year description of twelve 30-day months) the terms of the Notes, the terms of the offering of the Notes, a description of the Company and its subsidiaries and any material developments relating to the Company and its subsidiaries occurring after the date of the most recent historical financial statements included therein. The Company and the Subsidiary Guarantors understand that the Initial Purchasers propose to make an offering of the Notes only on the unpaid principal amount thereof plus any interest owed terms and in arrears the manner set forth in the Memorandum and Section 8 hereof as soon as the Initial Purchasers deem advisable after this Agreement has been executed and delivered, to persons in the United States whom the Initial Purchasers reasonably believe to be qualified institutional buyers ("QIBs") as defined in Rule 144A under the Act, as such rule may be amended from time to time ("Rule 144A"), in transactions under Rule 144A and outside the United States to certain persons in reliance on Regulation S under the Convertible Note as Act. The Initial Purchasers and their direct and indirect transferees of the Conversion Date Notes will be entitled to the benefits of the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"), pursuant to which the Issuers have agreed, among other things, to file (i) a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") registering the Securities or the Exchange Notes (as defined in Section 2.2the Registration Rights Agreement) until due at under the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on Act or (ii) a shelf registration statement pursuant to Rule 415 under the Conversion Date, and at maturity or prior prepayment Act relating to the resale of the Notes in full. The Company has authorized the issuance Securities, by hold- ers thereof or, if applicable, relating to the Noteholders resale of Private Exchange Notes (as defined in the Registration Rights Agreement) by the Initial Purchasers pursuant to an exchange of the Convertible Securities for Private Exchange Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.

The Securities. The Subject to the terms and conditions herein contained, the Company has authorized proposes to issue and sell to the issuance Purchasers the number of its Senior Subordinated Secured Convertible Notes Units (as defined below) stated opposite the respective names thereof on Schedule 1 hereto, each consisting of 1 share of 14-3/4% Redeemable Preferred Stock due September 302008, 2009 in the aggregate original principal amount of par value $30,000,000. The Senior Subordinated Secured Convertible Notes shall be in the form set forth as Exhibit 2.1 attached hereto and are herein referred to individually as a "Convertible Note" and collectively as 1.00 per share (collectively, the "Convertible NotesPreferred Stock", which terms shall also include any notes delivered in exchange or replacement therefor. The Convertible Notes shall (a) be payable on September 30, 2009 and (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003, and at maturity or prior prepayment of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion of the Noteholder thereof, upon such Noteholder's delivery of notice to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and one Warrant (iicollectively, the "Warrants," and, together with the Preferred Stock, the "Units") Common Stock Purchase Warrants of initially to purchase 80.318 shares (the Company for the purchase (subject to adjustment as provided for therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion"Initial Warrant Shares") of the Company's common stock (the "Common Stock"), subject to adjustment which would result in each Warrant being exercisable for 22.645 shares of Common Stock (the "Additional Warrant Shares" and together with the Initial Warrant Shares, the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred event the Company fails to herein individually as a "Warrant" raise net proceeds of at least $50,000,000 through the issue and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year sale of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date its qualified capital stock (as defined in Section 2.2the Warrant Agreement described below)(other than preferred stock) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March or before December 31, June 301998 (the "Warrant Adjustment Date"). Each Purchaser will purchase that amount of Units stated opposite its name on Schedule 1 hereto and will not be responsible for the purchase of any Units to be bought by the other Purchasers hereunder. The Warrants are to be issued under a warrant agreement (the "Warrant Agreement") to be entered into between the Company and Chase Manhattan Bank, September 30as Warrant Agent (the "Warrant Agent"). The Units, the Preferred Stock and December 31 the Warrants are herein collectively referred to as the "Securities." The Securities will be offered and sold to the Purchasers without being registered under the Securities Act of 1933, as amended (the "Act"), in each year commencing reliance on one or more exemptions therefrom. In connection with the Conversion Date, and at maturity or prior prepayment sale of the Notes in fullSecurities, the Company has prepared a preliminary offering memorandum dated June 11, 1997 (the "Preliminary Memorandum") and a final offering memorandum dated July 3, 1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), each setting forth or including a description of the terms of the Securities, the terms of the offering of the Securities, a description of the Company and any material developments relating to the Company occurring after the date of the most recent historical financial statements included therein. The Company has authorized Purchasers and their direct and indirect transferees of the issuance Securities will be entitled to the Noteholders benefits of (i) the Preferred Registration Rights Agreement (the "Preferred Registration Rights Agreement"), among the Company, the Purchasers, BT Securities, Inc. and Alex. Brown & Sons Incorporated (collectively, the "Xxxtixx Xxrchasers"), which will require the Company, among other things, to file with the Securities and Exchange Commission (the "Commission") under the circumstances set forth therein a shelf registration statement (the "Registration Statement") pursuant to Rule 415 under the Act relating to the resale of the Convertible NotesPreferred Stock by Holders thereof and to use its best efforts to cause such registration statement to be declared effective, (ii) a Supplemental Registration Rights Agreement (the "Supplemental Registration Rights Agreement") containing certain demand registration rights and upon conversion thereof(iii) the Warrant Agreement which will require the Company, among other things, to file with the Notes and Commission under the Warrants, and upon exercise Act a registration statement (the "Equity Registration Statement") registering the resale of the Warrants and Warrant Shares, and to use its commercially reasonable efforts to cause such registration statement to be declared effective. This purchase agreement (the issuance and sale of "Agreement"), the Securities, the Warrant SharesAgreement, the Preferred Registration Rights Agreement and the Supplemental Registration Rights Agreement are herein collectively referred to as the "Offering Documents."

The Securities. The Company has authorized Subject to the issuance of its Senior Subordinated Secured Convertible Notes due September 30terms and conditions herein contained, 2009 in the Issuer proposes to issue and sell to the Initial Purchasers $300,000,000 aggregate original principal amount of $30,000,000its 9 1/4% Senior Subordinated Notes due 2007 (the "Notes"). The Senior Subordinated Secured Convertible Notes shall will be in unconditionally guaranteed (the form set forth "Guarantees") on a joint and several basis by each of Sky Chefs, CII, the Additional Guarantors and Caterair (collectively, the "Guarantors"). The Notes and the related Guarantees will be issued pursuant to an Indenture (the "Indenture") by and among the Issuer, the Guarantors and The Bank of New York, as Exhibit 2.1 attached hereto trustee (the "Trustee"). The Notes and the related Guarantees are herein hereinafter referred to individually as a "Convertible Note" and collectively as the "Convertible NotesSecurities." 2 -2- The Securities are being issued and sold in connection with the repayment and retirement of the Issuer's and Caterair's term loan indebtedness under the Credit Agreement, dated as of September 29, 1995, among the Issuer, Caterair, Caterair Holdings, Onex Food Services, Inc. and the lenders named therein (the ", which terms shall also include any notes delivered in exchange or replacement thereforExisting Credit Agreement"). The Convertible Notes shall financing will consist of a senior secured revolving credit agreement among the Issuer, certain other parties and certain lenders (athe "SCIS Credit Agreement") and a senior secured credit agreement among Caterair, the Issuer, certain other parties and certain lenders (the "Caterair Credit Agreement," and together with the SCIS Credit Agreement, the "Senior Bank Financing"). The Securities will be payable offered and sold to you without being registered under the Securities Act of 1933, as amended (the "Act"), in reliance on September 30exemptions therefrom. In connection with the sale of the Securities, 2009 and the Issuer has prepared a preliminary offering memorandum, dated August 7, 1997 (b) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30 and December 31 in each year, commencing September 30, 2003"Preliminary Memorandum"), and at maturity a final offering memorandum, dated August 22, 1997 (the "Final Memorandum," the Preliminary Memorandum and the Final Memorandum each herein being referred to as a "Memorandum"), setting forth or prior prepayment including a description of the Convertible Notes in full. The Convertible Notes shall be convertible at any time, in whole or in part, in the sole discretion terms of the Noteholder thereofSecurities, upon such Noteholder's delivery the terms of notice the offering of the Securities, a description of the Issuer and any material developments relating to the Company of its intent to convert, into (i) Senior Subordinated Secured Notes due September 30, 2009 in the aggregate principal amount of $29,995,000 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) plus any interest owed in arrears on the Convertible Notes on Issuer occurring after the date of conversion, in the form set forth as Exhibit 2.1(i) attached hereto (referred to herein individually as a "Note" and collectively as the "Notes", which terms shall also include any notes delivered in exchange or replacement therefor), and (ii) Common Stock Purchase Warrants of the Company for the purchase (subject to adjustment as provided for most recent historical financial statements included therein) of an aggregate of 210.016 (or such lower amount determined on a pro-rata basis in the event of any in part conversion) of the Company's Common Stock (the "Warrant Shares") exercisable at a price per share of $.01 (subject to adjustment), in the form set forth as Exhibit 2.1(ii) attached hereto (referred to herein individually as a "Warrant" and collectively as the "Warrants", which terms shall also include any warrants delivered in exchange or replacement therefor). The Notes shall (Y) payable on September 30, 2009, and (Z) bear interest compounded quarterly (based on a 360-day year of twelve 30-day months) on the unpaid principal amount thereof plus any interest owed in arrears on the Convertible Note as of the Conversion Date (as defined in Section 2.2) until due at the rate of 12% per annum, payable in cash quarterly in arrears on March 31, June 30, September 30, and December 31 in each year commencing on the Conversion Date, and at maturity or prior prepayment of the Notes in full. The Company has authorized the issuance to the Noteholders of the Convertible Notes, and upon conversion thereof, the Notes and the Warrants, and upon exercise of the Warrants the issuance and sale of the Warrant Shares.