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Purpose of this Prospectus			iii
Industry and Market Data			iii
Special Note Regarding Forward-Looking Statements			iii
Summary			1
Summary of Historical Condensed Consolidated Financial and Other Data			12
Risk Factors			14
About our Exchange Offer			24
Use of Proceeds			32
Capitalization			33
Selected Historical Consolidated Financial Data			34
Management’s Discussion and Analysis of Financial Condition and Results of Operations			37
Business			52
Management			68
Certain Transactions and Related Parties			69
Description of Other Indebtedness			70
Description of the Exchange Notes			72
Certain United States Federal Income Tax Consequences			111
Plan of Distribution			116
Notice to Canadian Residents			117
Legal Matters			118
Experts			118
Incorporation of Certain Documents by Reference			118
Where You Can Find More Information			118
Glossary of Selected Industry Terms			G-1

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	If you do not exchange your Old Notes, they may be difficult to resell.

	Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under the notes.

	•	require us to dedicate a substantial portion of our cash flow from operations to payments in respect of our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, potential acquisition opportunities and other general corporate purposes;
	•	increase the amount of interest expense that we have to pay, because some of our borrowings are at variable rates of interest, which, if interest rates increase, will result in higher interest expense;
	•	increase our vulnerability to adverse general economic or industry conditions;
	•	limit our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate;
	•	limit our ability to borrow additional funds;
	•	restrict us from making strategic acquisitions, introducing new technologies or exploiting business opportunities;

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	•	make it more difficult for us to satisfy our obligations with respect to the notes; and
	•	place us at a competitive disadvantage compared to our competitors that have less debt.

	To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.

	Our operations may be restricted by the terms of our debt, which could adversely affect us and increase our credit risk.

	•	incur or guarantee additional indebtedness and issue preferred stock;
	•	pay dividends or make other distributions;
	•	create liens;
	•	sell assets;
	•	place restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to us;
	•	engage in mergers or consolidations with other entities;
	•	engage in certain transactions with affiliates; and
	•	make certain investments.

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	Our subsidiaries are not guaranteeing the notes. The notes will be effectively subordinated to all future liabilities and claims of creditors of our subsidiaries which do not become guarantors.

	The notes will be unsecured and effectively subordinated to our existing and future secured debt.

	Because we are a holding company, we may have limited access to the cash flow of our subsidiaries to service our indebtedness.

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	We may not be able to fulfill our obligation to purchase the notes upon a change of control and this obligation may discourage a sale or takeover of us.

	Federal and state statutes allow courts, under specific circumstances, to void guarantees and require note holders to return payments received from guarantors.

	•	was insolvent or rendered insolvent by reason of such incurrence; or
	•	was engaged in a business or transaction for which the guarantor’s remaining assets constituted unreasonably small capital; or
	•	intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature.

	•	the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets; or
	•	if the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
	•	it could not pay its debts as they become due.

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	There may not be a liquid market for the notes, and you may not be able to sell your notes at attractive prices or at all.

	Many of the covenants contained in the indenture will terminate if the notes are rated investment grade by both Standard & Poor’s and Moody’s.

	We rely on the oil and gas industry and volatile oil and natural gas prices impact demand for our services.

	•	prevailing oil and natural gas prices,
	•	expectations about future prices,
	•	the cost of exploring for, producing and delivering oil and natural gas,
	•	the sale and expiration dates of available offshore leases,
	•	demand for petroleum products,
	•	current availability of oil and natural gas resources,
	•	the rate of discovery of new oil and natural gas reserves in offshore areas,
	•	local and international political and economic conditions,
	•	technological advances, and
	•	the ability of oil and natural gas companies to generate or otherwise obtain funds for capital.

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	An increase in a supply of offshore support vessels would likely have a negative effect on charter rates for our vessels, which could reduce our earnings.

	•	constructing new vessels,
	•	moving vessels from one offshore market area to another, or
	•	converting vessels formerly dedicated to services other than offshore marine services.

	Government regulation and environmental risks reduce our business opportunities and increase our costs.

	•	oil spills and other matters of environmental protection,
	•	worker health, safety and training,
	•	construction and operation of vessels, and
	•	vessel and port security.

	We are subject to hazards customary for the operation of vessels that could adversely affect our financial performance if we are not adequately insured or indemnified.

	•	catastrophic marine disaster,
	•	adverse sea and weather conditions,
	•	mechanical failure,

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	•	navigation errors,
	•	collision,
	•	oil and hazardous substance spills, containment and clean-up,
	•	labor shortages and strikes,
	•	damage to and loss of drilling rigs and production facilities, and
	•	war, sabotage and terrorism risk.

	Substantially all our revenues are derived from our international operations and those operations are subject to government regulation and operating risks.

	•	legal and government regulatory requirements,
	•	difficulties and costs of staffing and managing international operations,
	•	language and cultural differences,
	•	potential vessel seizure or nationalization of assets,
	•	import-export quotas or other trade barriers,
	•	difficulties in collecting accounts receivable and longer collection periods,
	•	political and economic instability,
	•	imposition of currency exchange controls, and
	•	potentially adverse tax consequences.

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	Our international operations are vulnerable to currency exchange rate fluctuations and exchange rate risks.

	Vessel construction and repair projects are subject to risks, including delays and cost overruns, that could have an adverse impact on our results of operations.

	•	shortages of equipment,
	•	unforeseen engineering problems,
	•	work stoppages,
	•	weather interference,
	•	unanticipated cost increases, and
	•	shortages of materials or skilled labor.

	Our current operations and future growth may require significant additional capital, and our substantial indebtedness could impair our ability to fund our capital requirements.

	Our industry is highly competitive, which depresses vessel prices and utilization and adversely affects our financial performance.

	•	price, service and reputation of vessel operations and crews,
	•	national flag preference,
	•	operating conditions,
	•	suitability of vessel types,
	•	vessel availability,
	•	technical capabilities of equipment and personnel,
	•	safety and efficiency,

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	•	complexity of maintaining logistical support, and
	•	cost of moving equipment from one market to another.

	We are subject to war, sabotage and terrorism risk.

	We depend on key personnel.

	We have identified material weaknesses under the Sarbanes-Oxley Act relating to the effectiveness of our internal controls over financial reporting and we may identify additional material weaknesses in the future.

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	•	the possible disclosure of the existence of additional material weaknesses;
	•	failure to receive the required Section 404 report from our independent registered public accounting firm on a timely basis, or receipt of a report that is qualified as to scope;
	•	the adverse legal consequences, if any, of a failure to comply with the Sarbanes-Oxley Act requirements on a timely basis; and
	•	a possible adverse impact on the markets for our publicly-owned securities related to any such disclosure or failure to deliver or receive reports.

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	•	file a registration statement within 120 days after the issue date of the Old Notes, enabling holders to exchange the Old Notes for publicly registered Exchange Notes with substantially identical terms;
	•	use all commercially reasonable efforts to cause the registration statement to become effective within 270 days after the issue date of the Old Notes;
	•	use all commercially reasonable efforts to consummate the exchange offer within 30 business days of the effective date of the registration statement; and
	•	file a shelf registration statement for the resale of Old Notes if we cannot effect an exchange offer within the time period listed above and in certain other circumstances. See “Description of Our Exchange Notes — Registration Rights; Liquidated Damages.”

	•	cannot rely on these interpretations of the staff of the SEC,
	•	cannot tender your Old Notes in the exchange offer, and
	•	must comply with the registration and prospectus delivery requirements of the Securities Act for any sale or transfer of the Old Notes unless you rely on an exemption from these requirements.

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	•	you are not our affiliate,
	•	you acquired the Exchange Notes in the ordinary course of your business, and
	•	you are not participating, and do not intend to participate, in a distribution of the Exchange Notes.

	•	our acceptance of the Old Notes that you tender will constitute a binding agreement between you and us as described in this prospectus and in the accompanying letter of transmittal.
	•	the terms of the Exchange Notes are identical to the Old Notes except that:

	•	the Exchange Notes will be issued in a transaction registered under the Securities Act;
	•	the Exchange Notes will not be subject to transfer restrictions; and
	•	the Exchange Notes will not have provisions for the payment of liquidated damages.

	•	the Exchange Notes will evidence the same debt as the Old Notes. The indenture that governs the Old Notes will govern the Exchange Notes.
	•	you may tender some or all of your Old Notes in denominations of $1,000 principal amount or any integral multiple of $1,000. For each $1,000 principal amount of Old Notes properly tendered, we will issue $1,000 principal amount of Exchange Notes.
	•	the Exchange Notes, like the Old Notes, will bear interest at a rate of 73/4% per annum and will be payable semiannually in arrears on each January 15 and July 15, commencing on July 15, 2005, to holders of record on the immediately preceding January 1 and July 1. Interest on the notes will accrue from the most recent date to which interest has been paid, or if no interest has been paid,

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		from the date of original issuance. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
	•	as of the date of this prospectus, we had issued $160.0 million in total principal amount of the Old Notes. The exchange offer is not conditioned on any minimum principal amount of Old Notes being tendered.
	•	the exchange offer expires at 5:00 p.m., New York City time, on June 10, 2005, unless we, in our sole discretion, extend it. The term “expiration date” means June 10, 2005, or the latest time and date of an extension.
	•	if we extend the exchange offer, we will give oral or written notice of the extension to the exchange agent. We will notify the holders as described below. During an extension, all Old Notes previously tendered will remain subject to the exchange offer and may be accepted for exchange by us.
	•	we will give prompt oral or written notice to holders of Old Notes of any extension, amendment or termination. If we extend the expiration date, we will issue a press release or other public announcement no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date. Without limiting the manner in which we may choose to make any public announcement, we will have no obligation to publish, advertise or otherwise communicate any public announcement other than by issuing a release to the Dow Jones News Service.
	•	we may amend or terminate the exchange offer, and not accept for exchange any Old Notes that we have not yet accepted, if any of the conditions under the heading “— Certain Conditions to the Exchange Offer” occur.
	•	holders and beneficial owners of Old Notes have no appraisal or dissenters’ rights in connection with the exchange offer.
	•	Old Notes which are not tendered for exchange, or are tendered but not accepted, will remain outstanding and be entitled to the benefits of the indenture, but they will not be entitled to any further registration or exchange rights under the registration rights agreement.
	•	any Old Notes not accepted for exchange for any reason will be returned without expense to the tendering holder as soon as possible after the exchange offer is over.
	•	we intend to conduct the exchange offer as required by the Exchange Act and the SEC’s rules governing unlawful tender practices. This requires us to:

	•	keep the exchange offer open for at least 20 business days;
	•	give 10 days notice of any change in the terms of the exchange offer; and
	•	issue a press release if we extend the exchange offer.

	•	we will determine all questions of validity, form, eligibility and acceptance of Old Notes tendered for exchange, including time of receipt, in our sole discretion. This determination shall be final and binding.

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	•	we reserve the absolute right to reject any Old Notes not properly tendered or not to accept any Old Notes if we or our lawyers believe that acceptance would be unlawful.
	•	we reserve the absolute right to waive any defects or irregularities or conditions of the exchange offer as to any Old Notes either before or after the expiration date. This includes the right to waive the ineligibility of any holder who seeks to tender Old Notes in the exchange offer. Unless we agree to waive any defect or irregularity, it must be cured within a reasonable period of time that we shall determine.
	•	our interpretation of the terms and conditions of the exchange offer as to any Old Notes either before or after the expiration date, including the letter of transmittal and its instructions, shall be final and binding on all parties.
	•	neither we, the exchange agent nor any other person shall be required to give notice of any defect or irregularity with respect to any tender of Old Notes for exchange, nor shall any of us be liable for not giving this notification.

	What to submit and how.

	•	if you do not hold your Old Notes through DTC, deliver a properly completed and signed letter of transmittal, and all other documents required by the letter of transmittal, to the exchange agent at one of the addresses under the heading “— Exchange Agent” before the expiration of the exchange offer, or
	•	if you hold your Old Notes through DTC, comply with DTC’s automated tender offer program procedures, which are described below;

	•	the exchange agent must receive your Old Notes with the letter of transmittal, or
	•	the exchange agent must receive, before the expiration of the exchange offer, a timely book-entry confirmation of Old Notes into the exchange agent’s account at DTC based on the procedure for book-entry transfer described below, or
	•	you must comply with the guaranteed delivery procedures described below.

	How to sign your letter of transmittal and other documents.

	•	by a registered holder of the Old Notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal, or
	•	for the account of an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Exchange Act.

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	•	a member of or participant in the Securities Transfer Agents Medallion Program or the New York Stock Exchange Medallion Signature Program,
	•	a member of a national securities exchange or the National Association of Securities Dealers, Inc.,
	•	a commercial bank or trust company having an office or correspondent in the United States, or
	•	an eligible guarantor institution within the meaning or Rule 17Ad-15 of the Exchange Act.

	•	DTC has received an express acknowledgment from a participant in its automated tender offer program that is tendering Old Notes that are the subject of the book-entry confirmation;
	•	the participant has agreed to be bound by the terms of the letter of transmittal or, in the case of an agent’s message relating to guaranteed delivery, that the participant has agreed to be bound by the applicable notice of guaranteed delivery; and
	•	the agreement may be enforced against the participant.

	Acceptance of Old Notes for Exchange; Delivery of Exchange Notes

	•	if you hold your Old Notes through DTC, a book-entry confirmation that the Old Notes have been transferred into the exchange agent’s account at DTC, and
	•	if you do not hold your Old Notes through DTC, the Old Notes and a properly completed and duly executed letter of transmittal and all other required documents.

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	•	they are not immediately available and you cannot deliver your Old Notes or the letter of transmittal or other required documents to the exchange agent before the exchange offer expires, or
	•	you cannot comply with DTC’s automated tender offer program procedures for book-entry transfer before the exchange offer expires,

	•	the tender is made through an eligible guarantor institution;
	•	before expiration of the exchange offer, the exchange agent receives from the eligible guarantor institution a properly completed and duly executed letter of transmittal, by facsimile transmission, mail or hand delivery, and notice of guaranteed delivery. Any notice of guaranteed delivery must state:

	•	the name and address of the holder of Old Notes,
	•	the amount of Old Notes tendered,
	•	that the tender is being made by guaranteed delivery, and
	•	that within five Nasdaq Stock Market’s National Market System trading days after the date that the notice of guaranteed delivery was signed, the Old Notes or a book-entry confirmation, together with the letter of transmittal and any other documents required by the letter of transmittal, will be deposited by the eligible guarantor institution with the exchange agent; and

	•	the exchange agent receives the Old Notes, or a book-entry confirmation, together with the letter of transmittal and all other documents required by the letter of transmittal, within five Nasdaq Stock Market’s National Market System trading days after the date that the notice of guaranteed delivery was signed.

	•	if you hold Old Notes otherwise than through DTC, the exchange agent must receive a written notice of withdrawal at one of the addresses listed under the heading “— Exchange Agent,” or

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	•	if you hold Old Notes through DTC, you must comply with DTC’s automated tender offer program system requirements for withdrawal.

	•	the name of the person who tendered the Old Notes to be withdrawn,
	•	the Old Notes to be withdrawn, including the principal amount of such Old Notes,
	•	if certificates for Old Notes have been delivered, the name in which the Old Notes are registered, if different from that of the person withdrawing,
	•	if certificates for Old Notes have been delivered or otherwise identified to the exchange agent, the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an eligible guarantor institution, unless the withdrawing holder is an eligible guarantor institution, and
	•	if Old Notes have been tendered by book-entry transfer, the name and number of the account at DTC to be credited with the withdrawn Old Notes. In this case, the notice of withdrawal must otherwise comply with DTC’s automated tender offer program procedures for withdrawal.

	•	the exchange offer would violate applicable law or any applicable interpretation of the staff of the SEC, or
	•	there is or has been threatened any judicial or administrative proceeding that would prevent us from continuing with the exchange offer.

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	By Mail, Hand or Overnight Delivery:
	U.S. Bank National Association
	60 Livingston Avenue
	St. Paul, Minnesota 55107
	Attn: Specialized Finance
	By Facsimile: 651-495-8158
	For Information or Confirmation by Telephone: 800-934-6802
	Delivery to an address or location that is not shown above is not valid delivery.

	•	all registration and filing fees and expenses,
	•	all costs to comply with securities laws,
	•	all printing expenses, and
	•	the fees and expenses of our lawyers and accountants.

	•	We will pay any transfer taxes that apply to the exchange of Old Notes in the exchange offer, unless:

	•	you instruct us to register Exchange Notes in the name of a person other than the registered holder;
	•	you ask us to return Old Notes not tendered or accepted for exchange to a person other than the registered holder; or
	•	the tendered Old Notes are registered in the name of a person other than the person who signed the letter of transmittal.

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	•	you should not recognize taxable gain or loss when you exchange your Old Notes for Exchange Notes;
	•	you will be deemed to have held your Exchange Notes for as long as you held your Old Notes; and
	•	you will have the same tax basis in your Exchange Notes as you had in your Old Notes.

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			As of
			December 31, 2004
			(Dollars in millions)
Cash and cash equivalents			$	17.5
Long-term debt, including current portion:
	Credit Facility(1)			92.0
	Acquisition Facility(2)			8.0
	Other debt(3)			18.2
	7.75% senior notes due 2014 (including a discount of $646)			159.4
	Total long-term debt, including current portion			277.5
Shareholders’ equity(4)				316.2
	Total capitalization		$	593.7

(1)	As of December 31, 2004, there were no borrowings available for general corporate purposes under our Credit Facility.
(2)	As of December 31, 2004, additional borrowings of up to $42 million were available for acquisition purposes under the Acquisition Facility.
(3)	Includes the outstanding indebtedness under the senior secured credit facility of our subsidiary, GulfMark Rederi AS, with Den Norske Bank ASA which relates to vessel acquisitions.
(4)	Includes the net decrease in shareholders’ equity resulting from the debt refinancing costs of $6.5 million ($4.3 million net of taxes), which are comprised of $4.4 million for the payment of tender premiums and $2.1 million from the write-off of unamortized debt issuance costs and unamortized debt discount.

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		Year Ended December 31,
		2000				2001				2002				2003				2004
		(In thousands, except per share amounts and number of vessels)
Operating Data:
Revenues		$	77,702			$	114,063			$	133,919			$	129,900			$	139,312
Direct operating expenses			34,060				43,403				58,007				69,836				71,239
Drydock expense(a)			—				—				—				—				8,966
Bareboat charter expense			6,661				8,931				9,287				6,505				1,410
General and administrative expenses			6,328				7,623				10,027				10,801				15,666
Depreciation and amortization			12,613				15,327				21,414				28,031				26,137
Operating income			18,040				38,779				35,184				14,727				15,894
Interest expense			(12,239	)			(12,770	)			(12,149	)			(12,988	)			(17,243	)
Interest income			1,508				1,201				1,211				238				276
Debt refinancing costs			—				—				—				—				(6,524	)
Gain on sale of assets			3,651				—				181				16				2,282
Other income (expense), net			3				(1,501	)			2,493				(1,267	)			1,517
Income tax (provision) benefit			(3,056	)			12,213				(2,959	)			(192	)			6,476
Income before cumulative effect of change in accounting principle		$	7,907			$	37,922			$	23,961			$	534			$	2,678
Cumulative effect on prior years of change in accounting principle — net of $773 related tax effect(a)			—				—				—				—				(7,309	)
Net income (loss)		$	7,907			$	37,922			$	23,961			$	534			$	(4,631	)
Amounts per common share (basic):
Income before cumulative effect of change in accounting principle		$	0.48			$	2.31			$	1.25			$	0.03			$	0.13
Cumulative effect on prior years of change in accounting principle			—				—				—				—			$	(0.36	)
Net income (loss)		$	0.48			$	2.31			$	1.25			$	0.03			$	(0.23	)
Weighted average common shares (basic)			16,326				16,388				19,132				19,919				19,938
Amounts per common share (diluted):
Income before cumulative effect of change in accounting principle		$	0.47			$	2.26			$	1.22			$	0.03			$	0.13
Cumulative effect on prior years of change in accounting principle			—				—				—				—			$	(0.36	)
Net income (loss)		$	0.47			$	2.26			$	1.22			$	0.03			$	(0.23	)
Weighted average common shares (diluted)(b)			16,652				16,806				19,566				20,272				19,938
Statement of Cash Flows Data:
Cash provided by operating activities(c)		$	12,028			$	37,535			$	34,872			$	20,150			$	25,561
Cash used in investing activities			(3,880	)			(80,363	)			(88,299	)			(91,575	)			(40,404	)
Cash provided by financing activities(c)			110				31,526				39,720				68,646				23,005
Effect of exchange rate changes on cash			(2,178	)			(812	)			1,192				1,707				1,032
Other Data:
Adjusted EBITDA(d)		$	30,653			$	54,106			$	56,598			$	42,758			$	42,031
Cash dividends per share			—				—				—				—				—
Total vessels in fleet(e)			47				51				55				53				52
Average number of owned or chartered vessels(f)			33.6				38.0				43.5				46.8				45.6
Ratio of earnings to fixed charges(g)			1.83				2.75				2.68				0.93				0.72

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		As of December 31,
		2000				2001				2002				2003				2004
Balance Sheet Data:
Cash and cash equivalents		$	34,785			$	22,671			$	9,619			$	8,336			$	17,529
Vessels and equipment including construction in progress, net			182,628				262,364				379,208				485,502				538,978
Total assets			263,914				352,051				486,547				575,501				632,718
Long-term debt(g)			130,097				180,669				165,233				236,589				258,022
Total stockholders’ equity			97,587				133,392				254,779				292,128				316,157

(a)		See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of the change in accounting principle we adopted relating to drydock expenditures effective as of January 1, 2004.
(b)		Earnings per share is based on the weighted average number of shares of common stock and common stock equivalents outstanding.
(c)		Includes purchase of vessels and equipment and expenditures for drydocking. Effective with the second quarter of 2004, we have reclassified drydocking expenditures, which relate to periodic Classification Society and regulatory requirements for certification of our vessels, in our statements of cash flows to operating activities. Prior to this reclassification we presented such expenditures in investing activities. This reclassification neither increased nor decreased cash or cash equivalents. Amounts shown as expenditures for capital and drydocking costs include the following amounts (in thousands) for drydocking: $2,360, $4,878, $6,231, and $7,480 for the years ended December 31, 2000, 2001, 2002 and 2003, respectively.
(d)		EBITDA is defined as net income (loss) before cumulative effect of change in accounting principle, interest expense, interest income, income tax (benefit) provision, debt refinancing costs, and depreciation and amortization. Adjusted EBITDA is calculated by adjusting EBITDA for certain items that we believe are non-cash or unusual, consisting of: (i) gain on sale of assets; (ii) loss from unconsolidated ventures; (iii) minority interest; and (iv) other (income) expense, net. EBITDA and Adjusted EBITDA are not measurements of financial performance under GAAP and should not be considered as an alternative to cash flow data, a measure of liquidity or an alternative to operating income or net income as indicators of our operating performance or any other measures of performance derived in accordance with GAAP. EBITDA and Adjusted EBITDA are presented because we believe they are used by security analysts, investors and other interested parties in the evaluation of companies in our industry. However, because EBITDA and Adjusted EBITDA are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, EBITDA and Adjusted EBITDA as presented may not be comparable to other similarly titled measures used by other companies or comparable for other purposes.

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	The following table summarizes the calculation of EBITDA and Adjusted EBITDA for the periods indicated.

		Year Ended December 31,
		2000				2001				2002				2003				2004
		(In thousands)
Net income (loss)		$	7,907			$	37,922			$	23,961			$	534			$	(4,631	)
Cumulative effect of change in accounting principle			—				—				—				—				7,309
Interest expense			12,239				12,770				12,149				12,988				17,243
Interest income			(1,508	)			(1,201	)			(1,211	)			(238	)			(276	)
Debt refinancing costs			—				—				—				—				6,524
Income tax (benefit) provision			3,056				(12,213	)			2,959				192				(6,476	)
Depreciation and amortization			12,613				15,327				21,414				28,031				26,137
EBITDA			34,307				52,605				59,272				41,507				45,830
Adjustments:
Gain on sale of assets			(3,651	)			—				(181	)			(16	)			(2,282	)
Other (income) expense, net(i)			(3	)			1,501				(2,493	)			1,267				(1,517	)
Adjusted EBITDA		$	30,653			$	54,106			$	56,598			$	42,758			$	42,031

	(i)	Includes foreign currency transaction adjustments.

(e)		Includes managed vessels in addition to those that are owned and chartered at the end of the applicable period.
(f)		Average number of vessels is calculated based on the aggregate number of vessel days available during each period divided by the number of calendar days in such period. Includes owned and bareboat chartered vessels only, and is adjusted for additions and dispositions occurring during each period.
(g)		Our ratios of earnings to fixed charges are calculated by dividing earnings by fixed charges for the period indicated, where “earnings” is defined as consolidated income or loss from continuing operations plus income taxes, minority interest and fixed charges, except capitalized interest; and “fixed charges” is defined as consolidated interest on indebtedness, including capitalized interest, amortization of debt discount and issuance cost, and the estimated portion of rental expense deemed to be equivalent to interest. Because we have no preferred stock issued and outstanding, dividends relating to preferred stock are not included in the calculation of fixed charges.
(h)		Excludes current portion of long-term debt.

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	Change in Accounting Principle

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			2003				2002				2001				2000
Net Income as reported			$	534			$	23,961			$	37,922			$	7,907
Net Income pro forma				588				24,023				36,089				7,722
Earnings per share:
	Basic — as reported		$	0.03			$	1.25			$	2.31			$	0.48
	Basic — pro forma			0.03				1.26				2.20				0.47
	Diluted — as reported			0.03				1.22				2.26				0.47
	Diluted — pro forma			0.03				1.23				2.15				0.46

	Valuation Allowances

	Deferred Costs

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	Long-Lived Assets and Goodwill

	Income Taxes

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	Commitments and Contingencies

	Comparison of the Fiscal Years Ended December 31, 2004 and December 31, 2003

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		Year Ended December 31,
										Increase
		2004				2003				(Decrease)
		(Dollars in thousands)
Average Rates Per Day Worked(a)(b):
North Sea-Based Fleet(c)		$	11,862			$	11,042			$	820
Southeast Asia-Based Fleet			5,179				5,075				104
Americas-Based Fleet			12,137				11,707				430
Overall Utilization(a)(b):
North Sea-Based Fleet(c)			80.9	%			78.3	%			2.6	%
Southeast Asia-Based Fleet			82.2	%			83.8	%			(1.6	)%
Americas-Based Fleet			91.6	%			92.8	%			(1.2	)%
Average Owned or Chartered Vessels(a)(d):
North Sea-Based Fleet			29.4				30.8				(1.4	)
Southeast Asia-Based Fleet			11.6				12.0				(0.4	)
Americas-Based Fleet			4.6				4.0				0.6
Total			45.6				46.8				(1.2	)

(a)		Includes all owned or bareboat chartered vessels. Managed vessels are not included.
(b)		Average rates per day worked is defined as total charter revenues divided by number of days worked. Overall utilization rate is defined as the total number of days worked divided by the total number of days of availability in the period.
(c)		Revenues for vessels in our North Sea fleet are primarily earned in British pounds (£) and have been converted to U.S. dollars ($) at the average exchange rate ($/£) for the periods indicated. The average exchange rates for the years ended December 31, 2004, and 2003 were £ = $1.83 and £ = $1.63, respectively. The North Sea-Based Fleet includes certain vessels working in India.
(d)		Adjusted for vessel additions and dispositions occurring during each period.

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	Comparison of the Fiscal Years Ended December 31, 2003 and December 31, 2002

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		Year Ended December 31,
										Increase
		2003				2002				(Decrease)
		(Dollars in thousands)
Average Rates Per Day Worked(a)(b):
North Sea-Based Fleet(c)		$	11,042			$	10,839			$	203
Southeast Asia-Based Fleet			5,075				4,744				331
Americas-Based Fleet			11,707				10,229				1,478
Overall Utilization(a)(b):
North Sea-Based Fleet(c)			78.3	%			94.2	%			(15.9	)%
Southeast Asia-Based Fleet			83.8	%			82.4	%			1.4	%
Americas-Based Fleet			92.8	%			94.8	%			(2.0	)%
Average Owned or Chartered Vessels(a)(d):
North Sea-Based Fleet			30.8				28.6				2.2
Southeast Asia-Based Fleet			12.0				11.7				0.3
Americas-Based Fleet			4.0				3.2				0.8
Total			46.8				43.5				3.3

(a)		Includes all owned or bareboat chartered vessels. Managed vessels are not included.
(b)		Average rates per day worked is defined as total charter revenues divided by number of days worked. Overall utilization rate is defined as the total number of days worked divided by the total number of days of availability in the period.
(c)		Revenues for vessels in our North Sea fleet are primarily earned in British pounds (£) and have been converted to U.S. dollars at the average exchange rate ($/£) for the periods indicated. The average exchange rates for the years ended December 31, 2003, and 2002 were £ = $1.63 and £ = $1.50, respectively. The North Sea-Based Fleet includes certain vessels working in India.
(e)		Adjusted for vessel additions and dispositions occurring during each period.

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	Operating Income by Operating Segment

		Year Ended December 31,
		2004				2003				2002
		(In thousands)
North Sea		$	10,591			$	5,547			$	28,392
Southeast Asia			6,230				8,657				8,074
Americas			5,942				4,652				3,046
Total Reportable Segment Operating Income			22,763				18,856				39,512
Other			(6,869	)			(4,129	)			(4,328	)
Total Reportable Segment and Other Operating Income		$	15,894			$	14,727			$	35,184

	North Sea Region:

		Year Ended December 31,
		2004				2003				2002
		(In thousands)
Revenues		$	103,190			$	96,120			$	106,651
Operating expenses			71,818				68,038				60,304
Depreciation and amortization expense			20,781				22,535				17,955
Operating income		$	10,591			$	5,547			$	28,392

	Comparison of Fiscal Year Ended December 31, 2004 and December 31, 2003

	Comparison of Fiscal Year Ended December 31, 2003 and December 31, 2002

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		Year Ended December 31,
		2004				2003				2002
		(In thousands)
Revenues		$	17,505			$	17,907			$	16,197
Operating expenses			8,810				6,438				5,893
Depreciation and amortization expense			2,465				2,812				2,230
Operating income		$	6,230			$	8,657			$	8,074

	Comparison of Fiscal Year Ended December 31, 2004 and December 31, 2003

	Comparison of Fiscal Year Ended December 31, 2003 and December 31, 2002

		Year Ended December 31,
		2004				2003				2002
		(In thousands)
Revenues		$	18,617			$	15,873			$	11,071
Operating expenses			9,925				8,676				6,917
Depreciation and amortization expense			2,750				2,545				1,108
Operating income		$	5,942			$	4,652			$	3,046

	Comparison of Fiscal Year Ended December 31, 2004 and December 31, 2003

	Comparison of Fiscal Year Ended December 31, 2003 and December 31, 2002

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	•	At any time before July 15, 2007, we may redeem up to 35% of the 7.75% senior notes with net cash proceeds of certain equity offerings, as long as at least 65% of the aggregate principal amount of the 7.75% senior notes issued pursuant to the indenture remains outstanding after the redemption.
	•	Prior to July 15, 2009, we may redeem all or part of the 7.75% senior notes by paying a make-whole premium, plus accrued and unpaid interest and, if any, liquidation damages.
	•	The 7.75% senior notes may be callable beginning on July 15 of 2009, 2010, 2011, and 2012 and thereafter at redemption prices of 103.875%, 102.583%, 101.292% and 100% of the principal amount plus accrued interest.

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		2005				2006				2007				2008				2009				Thereafter
Repayment of Long-Term Debt		$	19.5			$	21.0			$	26.4			$	51.3			$	—			$	160.0
Newbuild Program Commitments			4.4				—				—				—				—				—
Non-Cancelable operating leases			0.3				0.3				0.3				0.3				0.3				1.3
Total		$	24.2			$	21.3			$	26.7			$	51.6			$	0.3			$	161.3

	•	the cost of using hedging instruments in relation to the risks of currency fluctuations;
	•	the propensity for adjustments in British pound-denominated vessel day rates over time to compensate for changes in the purchasing power of British pounds as measured in U.S. dollars;
	•	the level of U.S. dollar-denominated borrowings available to us; and
	•	the conditions in our U.S. dollar-generating regional markets.

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	Interest Rate Sensitivity

	Exchange Rate Sensitivity

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							Bareboat
			Owned				Chartered				Managed				Total
			Vessels				Vessels				Vessels				Fleet
January 1, 2004				47				1				8				56
	Newbuild Program			1				—				—				1
	Vessel Purchase			1				—				—				1
	Vessel Sales			(4	)			—				—				(4	)
	Vessel Additions			—				—				1				1
	Vessel Returns			—				(1	)			(2	)			(3	)
December 31, 2004				45				0				7				52
	Newbuild Program			2				—				—				2
March 31, 2005				47				0				7				54

	•	Platform Supply Vessels, or PSVs, serve drilling and production facilities and support offshore construction and maintenance work. They are differentiated from other offshore support vessels by their cargo handling capabilities, particularly their large capacity and versatility. PSVs utilize space on deck and below deck and are used to transport supplies such as fuel, water, drilling fluids, equipment and provisions. PSVs range in size from 150’ to 200’. Large PSVs, or LgPSVs, range up to 300’ in length, with a few vessels somewhat larger, and are particularly suited for supporting large concentrations of offshore production locations because of their large, clear after deck and below deck capacities. The majority of the LgPSVs we operate function primarily in this classification but are also capable of service in construction support.
	•	Anchor Handling, Towing and Supply Vessels, or AHTS, are used to set anchors for drilling rigs and tow mobile drilling rigs and equipment from one location to another. In addition, these vessels typically can be used in limited supply roles when they are not performing anchor handling and towing services. They are characterized by shorter after decks and special equipment such as towing winches. Vessels of this type with less than 10,000 brake horsepower, or BHP, are referred to as small AHTS vessels, or SmAHTS, while AHTS vessels in excess of 10,000 BHP are referred to as large AHTS vessels, or LgAHTS. The most powerful North Sea Class AHTS vessels have up to 25,000 BHP. All our AHTS vessels can also function as PSVs.
	•	Construction Support Vessels are vessels such as pipe-laying barges or specially designed vessels, such as pipe carriers, used to transport the large cargos of material and supplies required to support the construction and installation of offshore platforms and pipelines. A large number of our LgPSVs also function as pipe carriers. Our North Sea fleet has the distinction of being one of the only significant concentration of pipe carrier capable vessels outside of Scandinavian control.
	•	Standby Rescue Vessels, or Stby, perform a safety patrol function for an area and are required for all manned locations in the United Kingdom sector of the North Sea. These vessels typically remain on station to provide a safety backup to offshore rigs and production facilities and carry special equipment to rescue personnel. They are equipped to provide first aid and shelter and, in some cases, also function as supply vessels.

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	•	Crewboats, or Crew, transport personnel and cargo to and from production platforms and rigs. Older crewboats (early 1980s build) are typically 100’ to 120’ in length and are designed for speed and to transport personnel. Newer crewboat designs are generally larger, 130’ to 185’ in length and can be longer with greater cargo carrying capacities. They are used primarily to transport cargo on a time-sensitive basis. Vessels in this category are often called fast supply vessels, or FSV. We do not currently operate any vessels in this category.
	•	Specialty Vessels, or SpV, generally have special features to meet the requirements of specific jobs. The special features can include large deck spaces, high electrical generating capacities, slow controlled speed and varied propulsion thruster configurations, extra berthing facilities and long-range capabilities. These vessels are primarily used to support FPSOs, diving operations, ROVs, survey operations and seismic data gathering, as well as oil recovery, oil spill response and well stimulation. Some of our owned vessels frequently provide specialty functions, and two managed vessels are currently chartered for specialty functions.
	•	Utility Vessels are typically 90’ to 150’ in length and are used to provide limited crew transportation, some transportation of oilfield support equipment and, in some locations, standby functions. We do not currently operate any vessels in this category.

	The North Sea Market

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	The Southeast Asia Market

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	The Americas Market

	Other Markets

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Vessel

Cost

Vessel

Type

Delivery Date

(millions)

UT 755L (Highland Fortress)

PSV

July 12, 2001

$

14.0

UT 745 (Highland Navigator)

PSV

February 27, 2002

18.8

UT 745 (North Mariner)

PSV

February 28, 2002

19.7

UT 755 (Highland Bugler)

PSV

October 15, 2002

12.8

UT 722L (Highland Courage)

AHTS

December 12, 2002

30.8

UT 755L (Highland Eagle)

PSV

March 20, 2003

14.9

UT 755 (Highland Monarch)

PSV

July 2, 2003

12.9

UT 722L (Highland Valour)

AHTS

July 2, 2003

30.3

UT 722L (Highland Endurance)

AHTS

December 5, 2003

30.2

UT 719-2 (Austral Abrolhos)

SpV

September 6, 2004

24.0

Coloso

AHTS

March 9, 2005

11.0

Titan

AHTS

March 18, 2005

11.0

Total Delivered Vessel Cost

$

230.4

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				Type								Length				BHP		DWT
Fleet		Vessel		(a)		Flag		Delivery				(feet)				(b)		(c)
NORTH SEA BASED
		Highland Bugler		LgPSV		UK			2002				221			5,450		3,115
		Highland Champion		LgPSV		UK			1979				265			4,800		3,910
		Highland Citadel		LgPSV		UK			2003				236			5,450		3,200
		Highland Drummer		LgPSV		UK			1997				221			5,450		3,115
		Highland Eagle		LgPSV		UK			2003				236			5,450		3,200
		Highland Fortress		LgPSV		UK			2001				236			5,450		3,200
		Highland Monarch		LgPSV		UK			2003				221			5,450		3,115
		Highland Navigator		LgPSV		UK			2002				275			9,600		4,250
		Highland Pioneer		LgPSV		UK			1983				224			5,400		2,500
		Highland Piper		LgPSV		UK			1996				221			5,450		3,115
		Highland Pride		LgPSV		UK			1992				265			6,600		3,080
		Highland Rover		LgPSV		UK			1998				236			5,450		3,200
		Highland Star		LgPSV		UK			1991				265			6,600		3,075
		North Challenger		LgPSV		Norway			1997				221			5,450		3,115
		North Fortune		LgPSV		Norway			1983				264			6,120		3,366
		North Mariner		LgPSV		Norway			2002				275			9,600		4,400
		North Prince		LgPSV		UK			1978				259			6,000		2,717
		North Traveller		LgPSV		Norway			1998				221			5,450		3,115
		North Truck		LgPSV		Norway			1983				265			6,120		3,370
		North Vanguard		LgPSV		Norway			1990				265			6,600		4,000
		Safe Truck		LgPSV		UK			1996				221			5,450		3,115
		Highland Courage		AHTS		UK			2002				260			16,320		2,750
		Highland Endurance		AHTS		UK			2003				260			16,320		2,750
		Highland Valour		AHTS		UK			2003				260			16,320		2,750
		North Crusader		AHTS		Panama			1984				236			12,000		2,064
		Clwyd Supporter		SpV		UK			1984				266			10,700		1,350
		Highland Spirit		SpV		UK			1998				202			6,000		1,800
		Highland Sprite		SpV		UK			1986				194			3,590		1,442
		Sefton Supporter		SpV		UK			1971				250			1,620		1,219
		Sentinel		SpV		Norway			1979				266			4,600		4,141
SOUTHEAST ASIA BASED
		Highland Guide		LgPSV		Panama			1999				218			4,640		2,800
		Highland Legend		PSV		Panama			1986				194			3,600		1,442
		Highland Patriot		LgPSV		Panama			1982				233			4,800		2,649
		Sea Diligent		SmAHTS		Panama			1981				192			4,610		1,219
		Sea Eagle		SmAHTS		Panama			1976				185			3,850		1,215
		Sea Endeavor		SmAHTS		Panama			1981				191			3,900		1,000
		Sea Explorer		SmAHTS		Panama			1981				192			5,750		1,500
		Sea Searcher		SmAHTS		Panama			1976				185			3,850		1,215
		Sem Courageous		SmAHTS		Malaysia			1981				191			3,900		1,220
		Sem Valiant		SmAHTS		Malaysia			1981				191			3,900		1,220
AMERICAS BASED
		Austral Abrolhos(d)		AHTS		Brazil			2004				215			7,100		2,000
		Highland Scout		LgPSV		Panama			1999				218			4,640		2,800
		Highland Warrior		LgPSV		Panama			1981				265			5,300		4,049
		North Stream		LgPSV		Norway			1998				276			9,600		4,585
		Seapower		SpV		Panama			1974				222			7,040		1,205
		Coloso(e)		SmAHTS		Mexico			2005				196			5,916		1,674
		Titan(e)		SmAHTS		Mexico			2005				196			5,916		1,674

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(a)		Legend:		LgPSV — Large platform supply vessel		AHTS — Anchor handling, towing and supply vessel
				PSV — Platform supply vessel		SmAHTS — Small anchor handling, towing and supply vessel
				SpV — Specialty vessel, including towing and oil spill response

(b)		Brake horsepower.
(c)		Deadweight tons.
(d)		The Austral Abrolhos is subject to an annual right of its charterer to purchase the vessel during the term of the charter at a purchase price in the first year of $26.75 million declining to an adjusted purchase price of $12.9 million in the thirteenth year. The charter commenced May 2, 2003 when a front runner vessel began the charter and, subject to the charterer’s right to extend, terminates May 2, 2016.
(e)		Mobilizing to Mexico.
		The table above does not include seven managed vessels.

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		As of March 1, 2005								As of March 1, 2004
		2005 Vessel				2006 Vessel				2004 Vessel				2005 Vessel
		Days				Days				Days				Days
North Sea Based Fleet			61.3	%			40.6	%			39.3	%			37.9	%
Southeast Asia Based Fleet			59.9	%			12.7	%			34.1	%			13.4	%
Americas Based Fleet			96.6	%			78.5	%			89.9	%			55.7	%
Overall Fleet			65.8	%			40.3	%			43.2	%			32.9	%

	•	catastrophic marine disaster;
	•	adverse sea and weather conditions;
	•	mechanical failure;

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	•	navigation errors;
	•	collision;
	•	oil and hazardous substance spills, containment and clean up;
	•	labor shortages and strikes;
	•	damage to and loss of drilling rigs and production facilities; and
	•	war, sabotage and terrorism risks.

	•	foreign currency exchange fluctuations or imposition of currency exchange controls;
	•	legal and governmental regulatory requirements;
	•	potential vessel seizure or nationalization of assets;
	•	import-export quotas or other trade barriers;
	•	difficulties in collecting accounts receivable and longer collection periods;
	•	political and economic instability;
	•	potentially adverse tax consequences;
	•	difficulties and costs of staffing and managing international operations; and
	•	language and cultural differences.

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	Period Ended as of December 31, 2004

	Disclosure Controls and Procedures

	Management’s Annual Report on Internal Control over Financial Reporting

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	Remediation of the Material Weaknesses in Internal Control over Financial Reporting

	•	Financial statement close process. We have enhanced our corporate accounting function by creating and filling several new positions, including those of Accounting Manager and Assistant Controller-Financial Reporting, to provide greater review and analysis of financial results at both the corporate and subsidiary levels. In addition, the newly hired staff also bring experience in international financial statement preparation, as well as skills related to the review and analysis of complex accounting transactions in large multi-national companies. We also hired an outside consultant to, among other things, evaluate and assist us in establishing improved controls over the process associated with intercompany transactions. The consultant will assist in the training of the new and existing personnel in the execution of the controls and processes so established.
	•	Translation and transaction effects of foreign currency exchange. We have engaged an outside consultant to analyze the foreign currency impact of our intercompany and third party transactions. In addition, the consultant will also train our staff to identify, segregate, analyze and measure the foreign currency impact on these transactions in the future. We are also in the process of reviewing the capability of our system to automate the calculation and recording of foreign currency effects at the transaction level. These steps will enable the appropriate measurement of the foreign currency translation and transaction impact on the consolidated financial statements.
	•	Taxes related to new Brazilian operations. We have hired a Corporate Tax Manager, an individual that has over ten years experience with an accounting firm, separate from our independent registered public accounting firm, in international tax matters with a variety of multi-national clients. This individual will analyze and monitor the related taxes in all the taxing jurisdictions in which we operate. We have in the past used, and we intend to continue to use, third-party tax service providers for the more complex areas of our income tax accounting. The addition to the staff will enable an appropriate level of research, analysis and review of complex international tax issues related to our existing and future tax jurisdictions.

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	Report of our Independent Registered Public Accounting Firm

	•	our foreign tax provision in Norway,
	•	our allowance for bad debts, and
	•	our accrued liabilities related to indirect labor costs in the North Sea.

	•	Foreign Tax Provision. We have engaged an outside tax advisor separate from our independent registered public accounting firm to assist us with the tax considerations resulting from our multinational operations. We have subscribed to an online accounting research tool, which will be

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		utilized to research complex accounting issues. A part-time Assistant Controller has been replaced with a full-time employee. With these steps we took steps to remediate the deficiencies in our foreign tax provision close process. We continue to remediate this deficiency in light of the new material weakness identified for the period ending December 31, 2004 relating to our new Brazilian operations.
	•	Allowance for Bad Debts. We have developed a written corporate policy regarding the allowance for doubtful accounts receivables for significantly aged receivables that the Audit Committee has approved and that we have implemented as of December 31, 2004. This more formalized policy ensures there is a critical review of our aged accounts receivable to evaluate the collectibility of our receivables and to establish appropriate allowances for bad debt. The newly adopted policy formalizes a previous practice of reviewing each account receivable that is six months old or more to determine whether, under the facts and circumstances, an allowance for bad debt should be established. In addition, the new policy, unlike previous practice, mandates that a reserve for bad debt must be established if an account receivable is outstanding a year or more. The amount of such reserve to be established by management is based on the facts and circumstances relating to the particular customer. Our previous practice did not require that a reserve for bad debt be established if an account receivable was outstanding one year or more unless management believed it was appropriate under the facts and circumstances. Since our exposure to foreign government-owned and controlled oil companies, as well as companies that provide logistics, construction or other services to oil and gas companies, may result in longer payment terms, management intends to continue to meet with customers that have significant aged receivables to assess the recovery of all receivables. We have implemented this policy and believe the allowance for bad debt control deficiency has been resolved.
	•	Indirect Labor Costs. The material weakness occurred as a result of a lack of processes in place to reconcile accruals against our actual indirect labor costs. We have revised our processes to include a reconciliation of our accruals to actual indirect labor costs incurred at the end of each reporting period. These accruals will be reviewed and reconciled on an on-going basis. We now believe the indirect labor cost control deficiency has been resolved.

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Name		Age				Current Position
Peter I. Bijur			62			Director
David J. Butters			64			Chairman of the Board
Bruce A. Streeter			56			President and Chief Operating Officer, Director
Marshall A. Crowe			84			Director
Louis S. Gimbel, 3rd			76			Director
Sheldon S. Gordon			69			Director
Robert B. Millard			54			Director
Edward A. Guthrie			60			Executive Vice President — Finance, Chief Financial Officer, Secretary and Treasurer
John E. Leech			52			Executive Vice President — Operations
Carla S. Mashinski			42			Controller and Assistant Secretary

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	Multi-Currency Capacity

	Available Amount

	Interest and Fees

	Prepayments

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	Repayments

	Covenants and Other Matters

	•	engage in mergers or consolidations outside of the corporate group structure;
	•	sell or dispose of assets in excess of 15% of the consolidated book value of assets; and
	•	undertake any business other than the business we currently conduct.

	•	transfer its shares; or
	•	sell or dispose of the assets securing the loan agreements.

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	•	engage in mergers or consolidations outside of our current corporate group structure;
	•	sell or dispose of assets in excess of 15% of the consolidated book value of asset; and
	•	undertake any business other than the business we currently conduct.

	•	The Exchange Notes will be registered under the Securities Act. Therefore, the Exchanges Notes will be free from transfer restrictions that apply to the Old Notes; and
	•	The Old Notes require us to file SEC registrations and to pay specified penalties for delay. The Exchange Notes do not have these provisions.

	•	will be general unsecured obligations of the Company;
	•	will rank pari passu in right of payment with all current or future Senior Indebtedness of the Company, including borrowings under the Credit Agreement;
	•	will be senior in the right of payment to all Subordinated Indebtedness of the Company issued in the future, if any;
	•	will be effectively subordinated to all existing and future Indebtedness and liabilities, including trade payables, of non-Guarantor Subsidiaries; and

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	•	will be effectively subordinated to all of the Company’s and its Subsidiaries secured Indebtedness to the extent of the value of the assets securing such obligations.

	•	the Company (including its Subsidiaries) had total Indebtedness outstanding of $277.5 million, excluding trade payables, accrued liabilities and intercompany indebtedness;
	•	excluding trade payables, accrued liabilities and intercompany indebtedness, the Company’s Subsidiaries had indebtedness of $118.2 million outstanding, all of which was secured; and
	•	the Company had an additional $42.0 million available for borrowing on a secured basis under the Acquisition Facility and none under the Credit Facility.

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Year		Percentage
2009			103.875%
2010			102.583%
2011			101.292%
2012 and thereafter			100.000%

	Change of Control

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	Asset Sales

	(i) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and
	(ii) at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents; provided that, for purposes of this provision, the amount of each of the following shall be deemed to be cash:

	(a) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet), of the Company or any Restricted Subsidiary of the Company (other than contingent liabilities and liabilities that are by their terms subordinated to the notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability;
	(b) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received) within 270 days of the consummation of such Asset Sale;
	(c) any Capital Stock or assets of the kind referred to in clauses (b), (c) or (d) of the last paragraph of the covenant described under this caption; and
	(d) accounts receivables of a business retained by the Company of any of its Restricted Subsidiaries following the sale of such business; provided that (i) such accounts receivables are not more than 60 days past due and (ii) do not have a payment date greater than 90 days from the date of the invoice creating such accounts receivable.

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	Restricted Payments

	(i) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company);
	(ii) purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company;
	(iii) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness or the Subsidiary Guarantees, except (x) a payment of interest or principal at Stated Maturity and (y) intercompany Indebtedness between the Company and any of its Restricted Subsidiaries; or
	(iv) make any Restricted Investment

	(a) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;
	(b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock”; and
	(c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company or any of its Restricted Subsidiaries after the Issue Date (excluding Restricted Payments permitted by clauses (ii), (iii), (iv), (v), (vi), (vii), (viii) or (ix) of the next succeeding paragraph), is less than the sum of:

	(i) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from July 1, 1998 to the end of the Company’s most recently ended

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	fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
	(ii) 100% of the aggregate net proceeds received by the Company (including the Fair Market Value of non-cash proceeds less issuance costs) from the issue or sale, in either case, since July 1, 1998 of (A) Equity Interests of the Company (other than Disqualified Stock), or (B) Disqualified Stock or debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or Disqualified Stock or convertible or exchangeable debt securities) sold to a Restricted Subsidiary of the Company and other than Disqualified Stock or debt securities that have been converted or exchanged into Disqualified Stock), plus
	(iii) in case any Unrestricted Subsidiary has been redesignated a Restricted Subsidiary pursuant to the terms of the Indenture or has been merged, consolidated or amalgamated with or into, or transfers or conveys assets to or is liquidated into, the Company or a Restricted Subsidiary and provided that no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof, the lesser of (A) the book value (determined in accordance with GAAP) at the date of such redesignation, combination or transfer of the aggregate Investments made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary (or of the assets transferred or conveyed, as applicable) and (B) the Fair Market Value of such Investment in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable), in each case as determined in good faith by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a resolution of such Board of Directors and, in each case, after deducting any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or with the assets so transferred or conveyed, plus
	(iv) to the extent not already included in Consolidated Net Income for such period, without duplication, any Restricted Investment that was made after the Issue Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (A) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (B) the initial amount of such Restricted Investment.

	(i) the payment of any dividend or the consummation of any irrevocable redemption of debt within 60 days after the date of declaration of the dividend or giving of any such redemption notice, as the case may be, if at the date of declaration or notice, such payment would have complied with the provisions of the Indenture;
	(ii) the redemption, repurchase, retirement, defeasance or other acquisition of any Subordinated Indebtedness or Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than any Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (c)(ii) of the preceding paragraph;
	(iii) the defeasance, redemption, repurchase or other acquisition of Subordinated Indebtedness with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
	(iv) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its common Equity Interests on a pro rata basis;
	(v) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any employee or

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	director of the Company (or any of its Subsidiaries), or any former employee or director of the Company (or any of its Subsidiaries) issued pursuant to any management equity plan or stock option plan or any other management or employee benefit plan, agreement or trust; provided, however, that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests pursuant to this clause (v) shall not exceed $2.0 million in any twelve-month period;
	(vi) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company issued in accordance with the terms of the indenture to the extent such dividends are included in the definition of “Fixed Charges”;
	(vii) repurchases of Equity Interests deemed to occur upon the cashless exercise of stock options;
	(viii) reasonable and customary directors’ fees to the members of the Company’s Board of Directors, provided that such fees are consistent with past practice; and
	(ix) other Restricted Payments since the Issue Date in an aggregate amount not to exceed $10.0 million; provided, that, with respect to clauses (ii), (iii), (v), (vi), (vii) and (ix) above, no Default or Event of Default shall have occurred and be continuing immediately after such transaction.

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	Incurrence of Indebtedness and Issuance of Preferred Stock

	(i) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness and letters of credit pursuant to one or more Credit Facilities (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company thereunder) in an aggregate principal amount at any one time outstanding under this clause (i) not to exceed the greater of $100.0 million or 15% of Consolidated Tangible Assets;
	(ii) the incurrence by the Company and the Guarantors of Indebtedness represented by the notes (but not additional notes) and the Subsidiary Guarantees;
	(iii) Indebtedness outstanding on the Issue Date;
	(iv) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, Indebtedness that was permitted by the Indenture to be incurred;
	(v) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) if the Company or any Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinate to the payment in full of all Obligations with respect to the notes and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary and (B) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be;
	(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Purchase Money Indebtedness (or Capital Lease Obligations), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace Purchase Money Indebtedness incurred pursuant to this clause (vi);

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	(vii) the incurrence by the Company or any of its Restricted Subsidiaries of obligations in the ordinary course of business under (A) trade letters of credit which are to be repaid in full not more than one year after the date on which such Indebtedness is originally incurred to finance the purchase of goods by the Company or a Restricted Subsidiary of the Company; (B) standby letters of credit issued for the purpose of supporting (1) workers’ compensation liabilities of the Company or any of its Restricted Subsidiaries, or (2) performance, payment, deposit or surety obligations of the Company or any of its Restricted Subsidiaries; and (C) bid, advance payment and performance bonds and surety bonds of the Company and its Restricted Subsidiaries, and refinancings thereof;
	(viii) the incurrence by the Company or any of its Restricted Subsidiaries of (x) Financial Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk (including with respect to any floating rate Indebtedness that is permitted by the terms of the Indenture to be outstanding), and (y) Currency Hedging Obligations in connection with the conduct of the Permitted Business in currencies other than the U.S. dollar, and, in the case of each of clauses (x) and (y) not for speculative purposes and incurred in the ordinary course of business consistent with prudent business practices;
	(ix) the guarantee by the Company or any Restricted Subsidiary of the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this covenant; provided that the guarantee of any Indebtedness under this clause (ix) by a Restricted Subsidiary of the Company that ceases to be a Restricted Subsidiary shall be deemed a Restricted Investment at the time such Restricted Subsidiary’s status terminates in an amount equal to the maximum principal amount so guaranteed, for so long as, and to the extent that, such guarantee remains outstanding;
	(x) the issuance by a Restricted Subsidiary of the Company of preferred stock to the Company or to any of its Restricted Subsidiaries; provided, however, that any subsequent event or issuance or transfer of any Equity Interests that results in the owner of such preferred stock ceasing to be the Company or any of its Restricted Subsidiaries or any subsequent transfer of such preferred stock to a Person, other than the Company or one of its Restricted Subsidiaries, shall be deemed to be an issuance of preferred stock by such Subsidiary that was not permitted by this clause (x);
	(xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days;
	(xii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of guarantees, indemnities, holdbacks or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of any business, assets or Capital Stock of the Company or any Restricted Subsidiary; provided that such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary;
	(xiii) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant; provided, in each case, that the amount thereof is included in Fixed Charges of the Company as accrued; and
	(xiv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other clause of this paragraph) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed $30.0 million.

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	Liens

	Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

	(i) (x) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits; provided that the priority of any preferred stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on Capital Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock, or (y) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;
	(ii) make loans or advances to the Company or any of its Restricted Subsidiaries; or
	(iii) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries,

	(a) Indebtedness outstanding on the Issue Date;
	(b) the Indenture and the notes;
	(c) the Credit Facilities as in effect on the Issue Date and any future Liens that may be permitted to be granted under any other provisions of the Indenture;
	(d) applicable law or any applicable rule, regulation or order of any court or governmental authority;
	(e) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except with respect to Indebtedness incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person or such

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	Person’s subsidiaries, so acquired, provided that in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred;
	(f) restrictions of the nature described in clause (iii) above by reason of customary non-assignment provisions in contracts, agreements, and leases entered into in the ordinary course of business and consistent with past practices;
	(g) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (iii) above on the property so acquired;
	(h) any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;
	(i) agreements relating to secured Indebtedness otherwise permitted to be incurred pursuant to the covenants described under the Indebtedness otherwise permitted to be incurred pursuant to the covenants described under the captions “— Incurrence of Indebtedness and Issuance of Preferred Stock” and “— Liens” that limit the right of the debtor to dispose of assets securing such Indebtedness;
	(j) Permitted Refinancing Indebtedness in respect of Indebtedness referred to in clause (a), (b), (c), (e) and (g) of this paragraph, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive than those contained in the agreements governing the Indebtedness being refinanced;
	(k) any encumbrance or restriction contained in contracts for sales of assets or Capital Stock of a Restricted Subsidiary permitted under “— Repurchase at the Option of Holders — Asset Sales” with respect to the assets or Capital Stock of a Restricted Subsidiary to be sold pursuant to such contract;
	(l) encumbrances or restrictions contained in agreements entered into in connection with Hedging Obligations permitted from time to time under the Indenture;
	(m) any encumbrance or restriction existing under any agreement that extends, renews, refinances or replaces the agreements containing the encumbrances or restrictions in the foregoing clauses (a) and (e), provided that the terms and conditions of any such encumbrances or restrictions are not materially more restrictive than those contained in such agreement; and
	(n) provisions with respect to the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale leaseback agreements, stock sale agreements and other similar agreements entered into in the ordinary course of business.

	Merger, Consolidation, or Sale of Assets

	(i) the Company is the surviving corporation or the entity or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia;

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	(ii) the entity or Person formed by or surviving any such consolidation or merger (if other than the Company) or the entity or Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company under the notes and the Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;
	(iii) immediately before and after such transaction no Default or Event of Default shall have occurred; and
	(iv) except in the case of a merger of the Company with or into a Restricted Subsidiary, the Company or the entity or Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made will, at the time of such transaction and after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, (x) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock” or (y) have a Fixed Charge Coverage Ratio that is no less than the Fixed Charge Coverage Ratio of the Company immediately prior to such transaction.

	Transactions with Affiliates

	(i) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and
	(ii) the Company delivers to the Trustee:

	(a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, a resolution of its Board of Directors set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (i) above; and
	(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $20.0 million, an opinion as to the fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an Independent Financial Advisor.

	(1) any employment agreement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and consistent with the past practice of the Company or such Restricted Subsidiary, as the case may be;
	(2) transactions between or among the Company and/or its Restricted Subsidiaries;
	(3) transactions with a Person that is an Affiliate of the Company solely because the Company owns an Equity Interest in, or controls, such Person;
	(5) Restricted Payments that are permitted by the covenant described above under the caption “— Restricted Payments”;

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	(6) advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business and consistent with past practices;
	(7) maintenance in the ordinary course of business of customary benefit programs or arrangements for employees, officers or directors, including vacation plans, health and life insurance plans, deferred compensation plans and retirement or savings plans and similar plans;
	(8) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements or stock option or stock ownership plans approved by the Board of Directors;
	(9) fees and compensation paid to, and indemnity provided on behalf of, officers, directors or employees of the Company or any of its Restricted Subsidiaries, as determined by the Board of Directors of the Company or of any such Restricted Subsidiary, to the extent such fees and compensation are reasonable and customary as determined by the Board of Directors of the Company or such Restricted Subsidiary;
	(10) transactions between the Company and its Restricted Subsidiaries, on the one hand, and any Permitted Holders, on the other, for the purposes of providing investment banking, financial advisory, banking and other financial services, to the extent such fees and compensation to such Permitted Holders in such transactions are reasonable and customary as determined by the Board of Directors of the Company or such Restricted Subsidiary; and
	(11) the performance of obligations of the Company or any of its Restricted Subsidiaries under the terms of any written agreement to which the Company or any of its Restricted Subsidiaries is a party as in effect on the Issue Date.

	Business Activities

	Reports

	Termination of Certain Covenants

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	(a) “— Incurrence of Indebtedness and Issuance of Preferred Stock”;
	(b) “— Restricted Payments”;
	(c) “— Transactions with Affiliates”;
	(d) “— Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries”;
	(e) “— Business Activities”; and
	(f) “— Repurchase at the Option of Holders — Asset Sales,”

	(a) “— Liens”;
	(b) “— Reports”;
	(c) “— Merger, Consolidation, or Sale of Assets”; provided, however, that the Company will no longer be subject to clause (iv) of such provision;
	(d) “— Repurchase at the Option of Holders — Change of Control”; and
	(e) “— Subsidiary Guarantees.”

	(i) default for 30 days in the payment when due of interest on, or Liquidated Damages with respect to, the notes;
	(ii) default in payment when due of the principal of or premium, if any, on the notes;
	(iii) failure by the Company or any of its Restricted Subsidiaries for 30 days after notice from the Trustee or Holders of 25% of the outstanding principal amount of notes to comply with the provisions described under the caption “— Repurchase at the Option of Holders”;
	(iv) failure by the Company or any of its Restricted Subsidiaries (other than the provisions expressly set forth in clause (iii) above) for 60 days after notice from the Trustee or the Holders of 25% of the outstanding principal amount of notes to comply with any of its other agreements in the Indenture, the notes or the Subsidiary Guarantees;
	(v) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, which default (a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”) or (b) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates without duplication $5.0 million or more and such default shall not have been cured or acceleration rescinded within five business days after such occurrences;

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	(vi) failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $15.0 million (excluding amounts covered by insurance), which judgments are not paid, discharged or stayed for a period of 60 days;
	(vii) certain events of bankruptcy or insolvency with respect to the Company or any of its Restricted Subsidiaries that constitute Significant Subsidiaries or any group of Restricted Subsidiaries, that taken together, would constitute a Significant Subsidiary; and
	(viii) except as permitted by the Indenture, any Subsidiary Guarantee of a Restricted Subsidiary that constitutes a Significant Subsidiary or group of Restricted Subsidiaries, that taken together, would constitute a Significant Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee (other than by reason of the termination of the Indenture or the release of any such Subsidiary Guarantee in accordance with the Indenture).

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	(i) reduce the principal amount of notes whose Holders must consent to an amendment, supplement or waiver;
	(ii) reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption of the notes (other than provisions relating to the covenants described above under the caption “— Repurchase at the Option of Holders”);
	(iii) reduce the rate of or change the time for payment of interest or Liquidated Damages on any note;
	(iv) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest or Liquidated Damages, if any, on the notes (except a rescission of acceleration of the notes by the Holders of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration);
	(v) make any note payable in money other than that stated in the notes;
	(vi) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of notes to receive payments of principal of or premium, if any, or interest or Liquidated Damages, if any, on the notes;

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	(vii) waive a redemption payment with respect to any note (other than a payment required by one of the covenants described above under the caption “— Repurchase at the Option of Holders”); or
	(viii) make any change in the foregoing amendment and waiver provisions.

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	(1) upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the Initial Purchasers with portions of the principal amount of the Global Notes; and
	(2) ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes).

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	(1) any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or
	(2) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.

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	(1) DTC (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes and the Company fails to appoint a successor depositary or (b) has ceased to be a clearing agency registered under the Exchange Act;
	(2) the Company, at its option, notifies the trustee in writing that it elects to cause the issuance of the Certificated Notes; or
	(3) there has occurred and is continuing a Default or Event of Default with respect to the notes.

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	(a) required to file the Exchange Offer Registration Statement; or
	(b) permitted to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy; or

	(a) it is prohibited by law or Commission policy from participating in the Exchange Offer; or
	(b) it may not resell the notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales; or
	(c) it is a broker-dealer and owns notes acquired directly from the Company or an affiliate of the Company,

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	(a) the date on which such note has been exchanged by a Person other than a broker-dealer for an Exchange Note in the Exchange Offer and entitled to be resold to the public by such Person without complying with the prospectus delivery requirements of the Securities Act;
	(b) the date on which such note has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement; or
	(c) the date on which such note is eligible to be distributed to the public pursuant to Rule 144(k) under the Securities Act,

	(i) the Company will file an Exchange Offer Registration Statement with the Commission on or prior to 120 days after the Issue Date;
	(ii) the Company will use all commercially reasonable efforts to have the Exchange Offer Registration Statement declared effective by the Commission on or prior to 270 days after the Issue Date;
	(iii) unless the Exchange Offer would not be permitted by applicable law or Commission policy, the Company will:

	(a) commence the Exchange Offer; and
	(b) use all commercially reasonable efforts to issue on or prior to 30 business days, or longer, if required by the federal securities laws, after the date on which the Exchange Offer Registration Statement was declared effective by the Commission, notes in exchange for all notes tendered prior thereto in the Exchange Offer; and

(iv) if obligated to file the Shelf Registration Statement, the Company will use all commercially reasonable efforts to file the Shelf Registration Statement with the Commission on or prior to 30 days after such filing obligation arises and to cause the Shelf Registration to be declared effective by the Commission on or prior to the later of (a) 270 days after such obligation arises and (b) 270 days after the Issue Date.

	(i) the Company fails to file any of the registration statements required by the registration rights agreement on or before the date specified for such filing;
	(ii) any of such registration statements is not declared effective by the Commission on or prior to the date specified for such effectiveness (the “Effectiveness Deadline”);
	(iii) the Company fails to consummate the Exchange Offer within 30 business days after the Exchange Offer Registration Statement is declared effective by the Commission; or
	(iv) the Shelf Registration Statement or the Exchange Offer Registration Statement is declared effective but thereafter ceases to be effective or fails to be usable for its intended purposes during the periods specified in the registration rights agreement, (each such event referred to in clauses (i) through (iv) above, a “Registration Default”)

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	(i) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person; or
	(ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person; provided that, in each case, such Indebtedness was not incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Restricted Subsidiary of such specified Person, or such encumbered asset being acquired by such Person.

	(a) the present value at such Redemption Date of (i) the redemption price of the note at July 15, 2009 (such redemption price being set forth in the table appearing above under the caption “— Optional Redemption”) plus (ii) all required interest payments due on the note through July 15,

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	2009 (excluding accrued but unpaid interest) computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over
	(b) the principal amount of the note.

	(i) the sale, lease, conveyance or other disposition of any assets or rights (including, without limitation, by way of a sale and leaseback) other than in the ordinary course of business consistent with past practices (provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries, taken as a whole, will be governed by the covenants described above under the captions “— Repurchase at the Option of Holders — Change of Control” and “— Certain Covenants — Merger, Consolidation, or Sale of Assets” and not by the provisions of the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales”); and
	(ii) the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company’s Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a single transaction or a series of related transactions:

	(a) that have a Fair Market Value in excess of $5.0 million; or
	(b) for Net Proceeds in excess of $5.0 million; provided that the following will not be deemed to be Asset Sales:

	(A) a transfer of assets by the Company to a Restricted Subsidiary of the Company or by a Restricted Subsidiary of the Company to the Company or to another Restricted Subsidiary of the Company;
	(B) an issuance or sale of Equity Interests by a Restricted Subsidiary of the Company to the Company or to another Restricted Subsidiary of the Company;
	(C) (x) a Permitted Investment or (y) a Restricted Payment that is permitted by the covenant described above under the caption “— Certain Covenants — Restricted Payments”;
	(D) any disposition of assets resulting from the enforcement or foreclosure of Liens permitted to be incurred under the covenant described above under the caption “— Certain Covenants — Liens”;
	(E) any disposition of assets in trade or exchange for assets of comparable Fair Market Value related to the Permitted Business of the Company, provided that (x) in any such trade or exchange with a Fair Market Value in excess of $20.0 million, the Company shall obtain an opinion or report from a nationally recognized investment banking firm, appraisal firm or other valuation expert confirming that the assets received by the Company and the Restricted Subsidiaries in such trade or exchange have a fair market value of at least the fair market value of the assets so traded or exchanged and (y) any cash or Cash Equivalent received by the Company or a Restricted Subsidiary in connection with such trade or exchange (net of direct costs relating to such transaction) shall be treated as Net Proceeds of an Asset Sale and shall be applied in the manner set forth in the covenant described under the caption “— Repurchase at the Option of Holders — Asset Sales”;
	(F) the sale or lease of equipment, inventory, accounts receivable, services or other assets in the ordinary course of business or the sale of inventory to any joint venture, in which the Company owns, directly or indirectly, at least 50% of the Equity Interest, for resale by such joint venture to its customers in the ordinary course of business;
	(G) the sale or disposition of cash or Cash Equivalents;
	(H) the sale of assets by the Company or any of its Restricted Subsidiaries for the purpose of sale to a customer where the sale proceeds are recorded in the Company’s

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	consolidated financial statements as operating income in accordance with generally accepted accounting principles in the United States; and
	(I) sales of damaged, worn-out or obsolete equipment or assets that, in the Company’s reasonable judgment, are either (x) no longer used or (y) no longer useful in the business of the Company or its Restricted Subsidiaries.

	(i) in the case of a corporation, corporate stock;
	(ii) in the case of an association or business entity, any and all shares, interests, participation, rights or other equivalents (however designated) of corporate stock;
	(iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
	(iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

	(i) United States dollars;
	(ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than one year from the date of acquisition;
	(iii) certificates of deposit and Eurodollar time deposits with maturities of not more than one year from the date of acquisition, bankers’ acceptances with maturities of not more than one year from the date of acquisition and overnight bank deposits, in each case with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thompson Bank Watch Rating of “B” or better or any commercial bank organized under the laws of any other country that is a member of the OECD and has total assets in excess of $500.0 million;
	(iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above;
	(v) commercial paper having the highest rating obtainable from Moody’s or S&P with maturities of not more than one year from the date of acquisition;
	(vi) deposits available for withdrawal on demand with any commercial bank not meeting the qualifications specified in clause (iii) above, but which is organized under the laws of (a) any country that is a member if the OECD and has total assets of $50.0 million or (b) any other country in which the Company or any Restricted Subsidiary maintains an office or is engaged in any Permitted Business, provided that, in either case, (A) all such deposits are required to be made in such accounts in the ordinary course of business, (B) such deposits do not exceed at any one time $2.0 million in the aggregate and (C) no funds so deposited remain on deposit in such bank for more than 30 days; and
	(vii) investments in money market funds substantially all of whose assets comprise securities or deposits of the types described in clauses (i) through (v) above.

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	(i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a “Group”) together with any Affiliates thereof (whether or not otherwise in compliance with the provisions of the Indenture), other than Permitted Holders, unless immediately following such sale, lease, exchange or other transfer in compliance with the Indenture such assets are owned, directly or indirectly, by the Company or a Restricted Subsidiary of the Company;
	(ii) the approval by the holders of Capital Stock of the Company of any plan or proposal for the liquidation or dissolution of the Company (whether or not otherwise in compliance with the provisions of the Indenture);
	(iii) the acquisition in one or more transactions, of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of Voting Securities of the Company by any Person or Group, other than Permitted Holders, that either (A) beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, at least 50% of the Company’s then outstanding Voting Securities entitled to vote on a regular basis for the Board of Directors of the Company, or (B) otherwise has the ability to elect, directly or indirectly, a majority of the members of the Company’s Board of Directors, including, without limitation, by the acquisition of revocable proxies for the election of directors; or
	(iv) the first day on which a majority of the members of the Company’s Board of Directors are not Continuing Directors.

	(i) an amount equal to any extraordinary, unusual or non-recurring expenses or losses (including, whether or not otherwise includable as a separate item in the statement of Consolidated Net Income for such period, losses on sales of assets outside of the ordinary course of business) plus any net loss realized in connection with an Asset Sale (to the extent such losses were deducted in computing such Consolidated Net Income), plus
	(ii) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was included in computing such Consolidated Net Income, plus
	(iii) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net payments (if any) pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income, plus
	(iv) depreciation and amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation and amortization were deducted in computing such Consolidated Net Income, plus
	(v) all extraordinary, unusual or non-recurring items of loss or expense, minus
	(vi) all extraordinary, unusual or non-recurring items of gain or revenue; minus
	(vii) non-cash items increasing such Consolidated Net Income for such period,

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	(i) the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Restricted Subsidiary;
	(ii) the Net Income (but not loss) of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;
	(iii) the cumulative effect of a change in accounting principles shall be excluded; and
	(iv) each of the following shall be excluded: (a) any increased amortization, depreciation or cost of sales resulting from the write-up of assets pursuant to Accounting Principles Board Opinion Nos. 16 and 17; (b) the amortization of any Intangible Assets (including amortization attributable to goodwill and financing costs and including amortization of finance costs relating to the issuance of the notes); (c) any non-recurring charges relating to any premium or penalty paid, write off of deferred financing costs or other financial recapitalization charges in connection with redeeming or retiring any Indebtedness prior to or at its Stated Maturity; and (d) any non-cash non-recurring charge arising out of the restructuring or consolidation of the operations of any Persons or businesses either alone or together with such Person or any Restricted Subsidiary of such Person.

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	(i) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation or duplication, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any

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	deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net payments (if any) pursuant to Hedging Obligations);
	(ii) the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period;
	(iii) any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such guarantee or Lien is called upon); and
	(iv) all dividend payments, whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests payable solely in Equity Interests of the Company (other than Disqualified Stock), in each case, on a consolidated basis and in accordance with GAAP.

	(i) acquisitions that have been made by the Company or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated without giving effect to clause (iii) of the proviso set forth in the definition of Consolidated Net Income,
	(ii) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded,
	(iii) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the referent Person or any of its Restricted Subsidiaries following the Calculation Date and
	(iv) whenever pro forma effect is to be given to an acquisition or disposition, the amount of income or earnings related thereto (including the incurrence of any Indebtedness and any pro forma expense and cost reductions that have occurred or are reasonably expected to occur, regardless of whether those expense and cost reductions could then be reflected in pro forma financial statements in accordance with Regulation S-X as promulgated by the Commission or any regulation or policy of the Commission related thereto) shall be reasonably determined in good faith by one of the Company’s financial or accounting officers.

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	(i) any Investment in the Company or in a Restricted Subsidiary of the Company;
	(ii) any Investment in Cash Equivalents or deposit accounts maintained in the ordinary course of business consistent with past practices;
	(iii) any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment (i) such Person becomes a Restricted Subsidiary of the Company or (ii) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company;
	(iv) any Restricted Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales”;
	(v) any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company;
	(vi) any Investment received in settlement of debts, claims or disputes owed to the Company or any Restricted Subsidiary of the Company that arose out of transactions in the ordinary course of business;
	(vii) any Investment received in connection with or as a result of a bankruptcy, workout or reorganization of any Person;
	(viii) advances and extensions of credit in the nature of accounts receivable arising from the sale or lease of goods or services or the licensing of property in the ordinary course of business;
	(ix) other Investments by the Company or any Restricted Subsidiary of the Company in any Person having an aggregate Fair Market Value (measured as of the date each such Investment is made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (i) (net of returns of capital, dividends and interest paid on Investments and sales, liquidations and redemptions of Investments), not to exceed 5% of Consolidated Tangible Assets;
	(x) Investments in the form of intercompany Indebtedness or guarantees of Indebtedness of a Restricted Subsidiary of the Company permitted under clauses (v) and (ix) of the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”;

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	(xi) Investments arising in connection with Financial Hedging Obligations or Currency Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing or hedging currency or interest rate risk (including with respect to any floating rate Indebtedness that is permitted by the terms of the Indenture to be outstanding) in connection with the conduct of the business of the Company and its Subsidiaries and not for speculative purposes;
	(xii) guarantees (including Subsidiary Guarantees) of Indebtedness permitted under the covenant described above under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”;
	(xiii) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;
	(xiv) loans or advances made to employees made in the ordinary course of business consistent with past practices of the Company or such Restricted Subsidiary not to exceed $2.0 million at any one time outstanding; and
	(xv) Investments in any Permitted Joint Venture having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (o) that are at the time outstanding, not to exceed $15.0 million.

	(i) Liens in favor of the Company or any Restricted Subsidiary;
	(ii) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company;
	(iii) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition;
	(iv) Liens existing on the Issue Date of the Indenture and any extensions or renewals thereof, provided that such extension or renewal of such Liens does not extend to or cover any other property or assets of the Company or any Restricted Subsidiary;
	(v) statutory Liens (other than any Lien imposed by ERISA) or landlords and carriers’, warehouseman’s, mechanics’, suppliers’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business;
	(vi) Liens for taxes, assessments, government charges or claims not yet due and payable or which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and if a reserve or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made therefor;
	(vii) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security;
	(viii) Liens created or deposits made to secure the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of a like nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money);

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	(ix) easements, rights-of-way, licenses, covenants reservations, restrictions and other similar charges or encumbrances not interfering in any material respect with the business of the Company or any Restricted Subsidiary incurred in the ordinary course of business;
	(x) any attachment or judgment Lien, unless the judgment it secures shall not, within 60 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 60 days after the expiration of any such stay;
	(xi) any other Liens imposed by operation of law which do not materially affect the Company’s or any Guarantor’s ability to perform its obligations under the notes, the Subsidiary Guarantees and the Indenture;
	(xii) rights of banks to set off deposits against debts owed to said bank;
	(xiii) Liens upon specific items of inventory or other goods and proceeds of the Company or its Restricted Subsidiaries securing the Company’s or any Restricted Subsidiary’s obligations in respect of bankers’ acceptances issued or created for the account of any such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
	(xiv) Liens securing reimbursement obligations with respect to letters of credit which encumber documents and other property relating to such letters of credit and the products and proceeds thereof entered into in the ordinary course of business consistent with past practices;
	(xv) Liens to secure Purchase Money Indebtedness or other purchase money obligations incurred for the purpose of financing all or a part of the purchase price or cost of construction or improvement of property, plant or equipment used in the Permitted Business and acquired, constructed or improved after the Issue Date, provided that (1) the principal amount of Indebtedness secured by such Liens shall not exceed 100% of the lesser of cost or Fair Market Value of the property or assets so acquired, constructed or improved plus transaction costs related thereto, (2) such Liens shall not encumber any other property or assets of the Company or any Restricted Subsidiary (other than the charters or other contracts relating solely to such property or assets, and the proceeds therefrom and accessions and upgrades thereto) and (3) such Liens shall attach to such property or assets within 270 days of the date of the completion of the construction or acquisition of such property or assets;
	(xvi) Liens to secure any Permitted Refinancing Indebtedness incurred to refinance any Indebtedness secured by any Lien referred to in the foregoing clauses (ii), (iii), (iv) and (xv), provided, however, that such new Lien shall be limited to all or part of the same property that secured the original Lien (provided that such Liens may extend to after-acquired property, including any assets or Capital Stock of any subsequently formed or acquired Subsidiary, if such original Lien included such property or assets as collateral);
	(xvii) Liens in favor of customs and revenue authorities to secure payment of customs duties in connection with the importation of goods in the ordinary course of business and other similar Liens arising in the ordinary course of business;
	(xviii) leases or subleases granted to third Persons in ordinary course of business consistent with past practices not interfering with the ordinary course of business of the Company or its Restricted Subsidiaries;
	(xix) deposits made in the ordinary course of business to secure liability to insurance carriers, and Liens on the proceeds of insurance granted to insurance carriers solely to secure the payment of financed premiums;
	(xx) Liens in favor of a trustee under any indenture securing amounts due to the trustee in connection with its services under such indenture;
	(xxi) Liens under licensing agreements for use of intellectual property entered into in the ordinary course of business;

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	(xxii) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed $15.0 million at any one time outstanding and that (a) are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary course of business) and (b) do not in the aggregate materially detract from the value of the property or materially impair the use thereof in the operation of business by the Company or such Restricted Subsidiary;
	(xxiii) any attachment or judgment Lien not constituting an Event of Default under clause (vi) of the first paragraph of the section described under the caption “— Events of Default and Remedies”;
	(xxiv) Liens securing Hedging Obligations related to Indebtedness permitted under the Indenture; and
	(xxv) Liens of the Company and any Restricted Subsidiary securing Indebtedness under Credit Facilities that are permitted by the terms of the Indenture.

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	(i) all Indebtedness of the Company and its Restricted Subsidiaries outstanding under Credit Facilities and Hedging Obligations related thereto at such time; and
	(ii) all other outstanding Indebtedness of the Company or any of its Restricted Subsidiaries, unless the instrument under which such Indebtedness is incurred expressly provides that such Indebtedness is subordinated to the notes or Subsidiary Guarantees, if applicable.

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	•	The discussion applies to you only if you bought Old Notes in the initial offering and you exchange them for the Exchange Notes in the exchange offer.
	•	The discussion applies to you only if you hold your notes as capital assets (that is, for investment purposes), and you are not a person in a special tax situation, such as a financial institution, a partnership or other pass-through entity, an insurance company, a regulated investment company, an expatriate, a dealer in securities or currencies, a person holding the notes as a hedge against currency risks, as a position in a “straddle” or “integrated transaction” or as part of a “hedging” or “conversion” transaction for tax purposes, or a person whose functional currency is not the U.S. Dollar.
	•	The discussion is included for general information only and does not address tax consequences that depend upon your particular tax situation.
	•	The discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury Regulations promulgated thereunder, and published rulings and judicial decisions now in effect. Those authorities may be changed, possibly with retroactive effect, in which case the U.S. federal income tax consequences may be different from those discussed below.
	•	The discussion does not address state, local or foreign law or any federal tax consequences other than income tax consequences (except for the limited discussion of certain federal estate tax consequences to non-U.S. holders).
	•	We have not requested a ruling from the Internal Revenue Service (“IRS”) on the tax consequences of owning the notes. As a result, the IRS could disagree with portions of this discussion.

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	Taxation of interest

	Sale, exchange, redemption or other taxable disposition of notes

	•	You will have taxable gain or loss equal to the difference between the amount received by you (to the extent such amount does not represent accrued but unpaid interest not previously includible in income, which will be taxable as ordinary income) and your adjusted tax basis in the Exchange Note.
	•	Your adjusted tax basis in an Exchange Note generally will equal the cost to you of the Old Note.
	•	Your gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if you held the Exchange Note for more than one year. For purposes of determining whether the Exchange Note has been held for more than one year, the time period in which the Old Notes exchanged therefor will be included in the determination. For an individual, the maximum tax rate on long-term capital gains is 15%. The deductibility of capital losses is subject to limitations.

	Withholding tax on payments of principal and interest on notes

	•	you do not actually or constructively own 10% or more of the total combined voting power of all our voting stock;
	•	you are not a controlled foreign corporation that is directly or indirectly related to us through stock ownership;
	•	you are not a bank receiving interest pursuant to a loan agreement entered into in the ordinary course of your trade or business; and
	•	either

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	•	you are the beneficial owner of the Exchange Note and you certify to the applicable payor or its agent, under penalties of perjury, that you are not a United States person and provide your name and address on a signed IRS Form W-8BEN (or a suitable substitute form), or
	•	a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business (a “financial institution”) and certifies under penalties of perjury that such an IRS Form W-8BEN (or suitable substitute form) has been received from you by it or by a financial institution between it and you and furnishes the payor with a copy thereof.

	Gain on taxable disposition of the notes

	•	you are an individual present in the U.S. for 183 days or more in the year of such disposition and certain other requirements are met, in which case you will be subject to a 30% U.S. federal income tax (or lower applicable tax treaty rate) on the excess of such gains plus all other U.S. source capital gains for the same taxable year over your U.S. source capital losses for such taxable year; or
	•	the gain is effectively connected with your conduct of a trade or business in the U.S. (and, if a tax treaty applies, is attributable to a U.S. permanent establishment), in which case, except to the extent otherwise provided under an applicable tax treaty, such gain generally will be taxed on a net income basis in the same manner as a U.S. holder with respect to such gain on disposition of an Exchange Note. In addition, if you are a foreign corporation, you may also be subject to a branch profits tax at a rate of 30% (or lower applicable tax treaty rate).

	U.S. federal estate tax

	•	you should not recognize a taxable gain or loss as a result of exchanging your notes for the exchange notes;

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	•	the holding period of the exchange notes you receive should include the holding period of the notes you exchange; and
	•	the adjusted tax basis of the exchange notes you receive should be the same as the adjusted tax basis of the notes you exchanged determined immediately before the exchange.

	U.S. holders

	Non-U.S. holders

	•	is a U.S. person,
	•	derives 50 percent or more of its gross income for certain periods from the conduct of a trade or business in the U.S.,
	•	is a “controlled foreign corporation” for U.S. federal income tax purposes, or
	•	is a foreign partnership that at any time during its taxable year is 50 percent or more (by income or capital interest) owned by U.S. persons or is engaged in the conduct of a U.S. trade or business,

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	•	all registration and filing fees and expenses,
	•	all costs to comply with securities laws,
	•	all printing expenses, and
	•	all costs of our lawyers and accountants.

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	1. the purchaser is entitled under applicable provincial securities laws to purchase the notes without the benefit of a prospectus qualified under those securities laws;
	2. where required by law, the purchaser is purchasing as principal and not as agent; and
	3. the purchaser has reviewed the text above under Resale Restrictions.

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	•	Our Annual Report on Form 10-K/ A for the fiscal year ended December 31, 2004 filed on April 26, 2005.
	•	Our Proxy Statement on Schedule 14A filed on April 21, 2005.
	•	Our Current Reports on Form 8-K filed on January 28, 2005 and April 1, 2005.
	•	All documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus and prior to the termination of this offering.

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G-1

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G-2

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G-3

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