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ADS TACTICAL, S-1/A Filing

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                                              As filed with the Securities and Exchange Commission on April 6, 2011
                                                                                                                                            Registration No. 333-172118

                                                     UNITED STATES
                                         SECURITIES AND EXCHANGE COMMISSION
                                                                         Washington, D.C. 20549



                                                                     AMENDMENT NO. 1
                                                                          TO

                                                                             FORM S-1
                                                             REGISTRATION STATEMENT
                                                          UNDER THE SECURITIES ACT OF 1933

                                                                    ADS TACTICAL, INC.
                                                             (Exact name of registrant as specified in its charter)


                         Delaware                                                     5091                                              27-1083344
                 (State or other jurisdiction of                          (Primary Standard Industrial                                 (I.R.S. Employer
                incorporation or organization)                            Classification Code Number)                                 Identification No.)


                                                               621 Lynnhaven Parkway, Suite 400
                                                                 Virginia Beach, Virginia 23452
                                                                         (757) 481-7758
                                                   (Address, including zip code, and telephone number, including area code,
                                                                  of registrant‟s principal executive offices)


                                                                        Charles M. Salle
                                                                        General Counsel
                                                                       ADS Tactical, Inc.
                                                               621 Lynnhaven Parkway, Suite 400
                                                                 Virginia Beach, Virginia 23452
                                                                         (757) 481-7758
                                     (Name, address, including zip code, and telephone number, including area code, of agent for service)

                                                                                Copies to :


                             Kirk A. Davenport, Esq.                                                              Richard Sandler, Esq.
                              Ian D. Schuman, Esq.                                                              Davis Polk & Wardwell LLP
                             Latham & Watkins LLP                                                                 450 Lexington Avenue
                                885 Third Avenue                                                                New York, New York 10017
                            New York, New York 10022                                                                   (212) 450-4000
                                  (212) 906-1200

         Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration
    statement.


        If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities
    Act of 1933, check the following box. 

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and
    list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities
    Act registration statement number of the earlier effective registration statement for the same offering. 

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities
    Act registration statement number of the earlier effective registration statement for the same offering. 
    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):

Large accelerated filer                                                                               Accelerated filer 

Non-accelerated filer  (Do not check if a smaller reporting company)                                  Smaller reporting company 

                                                 CALCULATION OF REGISTRATION FEE


                          Title of Each Class of                                 Proposed Maximum Aggregate                 Amount of Registration
                        Securities to be Registered                                   Offering Price(1)(2)                       Fee(2)(3)
Common Stock, par value $0.01 per share                                                  $100,000,000                              $11,610

 (1) Includes shares of common stock issuable upon exercise of the underwriters‟ option to purchase additional shares of common stock.

 (2) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act.

 (3) Previously paid.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
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     The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement
     filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and we are not
     soliciting any offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

         PROSPECTUS (Subject to Completion)

         Issued April 6, 2011


                                                                               Shares




                                                               Common Stock


         This is an initial public offering of shares of common stock by ADS Tactical, Inc. We are offering       shares of our
         common stock in this offering and the selling stockholders named in this prospectus are offering        shares of our
         common stock. We will not receive any proceeds from the sale of shares to be offered by the selling stockholders.




         Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial
         public offering price per share of our common stock will be between $     and $      . We will apply to have our
         common stock approved for listing on the New York Stock Exchange under the symbol “ADSI.”




         Investing in our common stock involves risks. See “Risk Factors” beginning on page 10.



                                                                    Price $    a Share




                                                                                       Underwriting                                  Proceeds to
                                                                    Price to           Discounts and           Proceeds to           the Selling
                                                                    Public             Commissions            the Company           Stockholders


         Per Share                                              $                  $                      $                     $
         Total                                                  $                  $                      $                     $


         We and the selling stockholders have granted the underwriters a 30-day option to purchase up to an aggregate
         of       additional shares of common stock on the same terms set forth above. If the underwriters exercise the option in full,
         the total underwriting discounts and commissions payable by us and the selling stockholders will be $ , the total proceeds,
         before expenses, to us will be $     and the total proceeds, before expenses, to the selling stockholders will be $ . See the
         section of this prospectus entitled “Underwriters.”
The Securities and Exchange Commission and state securities regulators have not approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.

The underwriters expect to deliver the shares to purchasers on or about   , 2011.




J.P. Morgan                                                                                 Morgan Stanley
      , 2011
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OPERATIONAL EQUIPMENT & LOGISTICS SOLUTIONS
                                                   TABLE OF CONTENTS


                                                                                                                        Page

Market and Industry Information                                                                                             ii
Trademarks and Tradenames                                                                                                   ii
Non-GAAP Financial Measures                                                                                                 ii
Prospectus Summary                                                                                                          1
Risk Factors                                                                                                               10
Forward-Looking Statements                                                                                                 28
Use of Proceeds                                                                                                            30
Dividend Policy                                                                                                            31
Capitalization                                                                                                             32
Dilution                                                                                                                   34
Selected Consolidated Financial and Other Data                                                                             35
Management‟s Discussion and Analysis of Financial Condition and Results of Operations                                      38
Business                                                                                                                   55
Management                                                                                                                 69
Compensation Discussion and Analysis                                                                                       72
Executive Compensation                                                                                                     76
Principal and Selling Stockholders                                                                                         86
Certain Relationships and Related Party Transactions                                                                       87
Description of Certain Indebtedness                                                                                        91
Description of Capital Stock                                                                                               95
Shares Eligible for Future Sale                                                                                            99
Material United States Federal Income Tax Considerations for Non-United States Holders of Our
   Common Stock                                                                                                           101
Underwriters                                                                                                              104
Legal Matters                                                                                                             109
Experts                                                                                                                   109
Where You Can Find More Information                                                                                       109
Index to Financial Statements                                                                                             F-1
  EX-4.2
  EX-10.3
  EX-10.15
  EX-10.16
  EX-10.17
  EX-10.18
  EX-10.19
  EX-23.2




    We have not authorized anyone to provide any information other than that contained in this prospectus or in any free
writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can
provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and
seeking offers to buy, our common stock only in jurisdictions where offers and sales are permitted. The information
contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this
prospectus or any sale of our common stock.

    Until       , 2011 (25 days after the date of this prospectus), all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer‟s
obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.
i
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                                                  MARKET AND INDUSTRY INFORMATION

             We obtained the industry and market data in this prospectus from our own research and from information released by the
         Department of Defense, including the Fiscal Year 2011 Budget Request and annual budget press releases. Although we are
         not aware of any misstatements contained in the information released by the Department of Defense, there can be no
         assurances as to the accuracy or completeness of such third-party information. While we believe that the information
         released by the Department of Defense is reliable, we have not independently verified the data contained therein. In addition,
         while we believe that the results and estimates from our internal research are reliable, such results and estimates have not
         been verified by any independent source. Moreover, the Department of Defense may, in the future, alter the manner in which
         it gathers data regarding the markets in which we operate our business. As a result, you should carefully consider the
         inherent risks and uncertainties associated with the industry and market data contained in this prospectus, including those
         discussed under the heading “Risk Factors.”

                                                      TRADEMARKS AND TRADENAMES

             We own or have rights to trademarks and/or tradenames that we use in connection with the operation of our business.
         Certain trademarks and/or tradenames are subject to registrations or applications to register with the United States Patent and
         Trademark Office, while others are not subject to registration but protected by common law rights. These registered and
         unregistered marks include our company, product and website names and logos used herein. Each trademark, tradename or
         service mark by any other company appearing in this prospectus belongs to its owner and is used under permission or license
         from its owner. Some of the trademarks we own or have the right to use include ADS (words and design), OFFICIAL
         GENIII ECWCS (words and design) and WARRIOR EXPO. We also sell products under a number of licensed brands,
         including COMBAT MEDICAL SYSTEMS. Solely for convenience, trademarks, service marks and tradenames referred to
         in this prospectus may appear without the ® , tm or SM symbols, but such references are not intended to indicate, in any way,
         that we will not assert to the fullest extent under applicable law, our rights or the right of the applicable licensor to these
         trademarks, service marks and tradenames.

                                                      NON-GAAP FINANCIAL MEASURES

             EBITDA, as presented in this prospectus, is a supplemental measure of our performance that is not required by, or
         presented in accordance with, generally accepted accounting principles in the United States, or “GAAP.” We define
         EBITDA as net income before interest expense, provision for income taxes and depreciation and amortization. EBITDA
         should not be considered as an alternative to net income as a measure of performance. We believe that EBITDA is a useful
         financial metric to assess our operating performance from period to period by excluding certain items that we believe are not
         representative of our core business, as well as for providing a comparison of our operating performance to that of other
         companies in our industry. Because EBITDA is not determined in accordance with U.S. GAAP and is susceptible to varying
         calculations, EBITDA, as presented, may not be comparable to other similarly titled measures presented by other companies.

             EBITDA has limitations as an analytical tool and you should not consider it in isolation, or as a substitute for analysis of
         our results as reported under GAAP.

             Some of these limitations are:

              •     it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

              •     it does not reflect changes in, or cash requirements for, our working capital needs;

              •     it does not reflect the interest expense or cash requirements necessary to service interest or principal payments on
                    our debt;

              •     it does not reflect any cash income taxes that we may be required to pay;

              •     it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;

              •     assets are depreciated or amortized over differing estimated useful lives and often have to be replaced in the future,
                    and EBITDA does not reflect any cash requirements for such replacements; and

              •     other companies in our industry may calculate EBITDA measures differently than we do, limiting its usefulness as a
                    comparative measure.


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                                                               PROSPECTUS SUMMARY

                  This summary highlights important information regarding our business and the offering contained elsewhere in this
             prospectus. Please review this prospectus in its entirety, including “Risk Factors,” “Selected Consolidated Financial and
             Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our
             consolidated financial statements and the related notes, before you decide to invest. Unless otherwise noted or as the context
             otherwise requires, the terms “company,” “ADS,” “we,” “us” and “our” refer to ADS Tactical, Inc., a Delaware
             corporation, our operating subsidiaries, including Atlantic Diving Supply, Inc., MAR-VEL International, Inc. and the
             consolidated variable interest entities. Unless otherwise noted in this prospectus, any statements with respect to the number
             of items we offer and the number of our customers, vendors and preferred vendors are made as of December 31, 2010. Some
             of the statements in this prospectus constitute forward-looking statements. See “Forward-Looking Statements .”


                                                                    ADS Tactical, Inc.

             Our Company

                 We believe we are a leading provider of value-added logistics and supply chain solutions specializing in tactical and
             operational equipment. We drive sales between a fragmented base of vendors and a decentralized group of customers by
             tailoring our solutions to meet their needs. Most of our approximately 4,000 active customers (in the past 24 months) are
             within the Department of Defense and the Department of Homeland Security. Our business model is adaptable and scalable
             to serve other domestic and foreign government agencies. Through our vendor network, we offer our customers access to
             over 160,000 items, which we combine with our broad suite of value-added supply chain management services. Our flexible
             operating model allows us to maintain an asset-light, low-inventory business. We believe our value proposition has allowed
             us to drive the growth in demand for the products and related services we offer while building upon the strength of our
             market position, as evidenced by the compound annual growth rate of our net sales, net income and EBITDA from 2006 to
             2010 of 61%, 84% and 80%, respectively.

                Our customers need the products we offer for ongoing training and to be prepared for a variety of peacetime operations
             and missions at home and abroad. The products we offer include apparel, expeditionary equipment, optical equipment,
             communications equipment, emergency medical supplies, lighting, eyewear and other items from approximately 1,400 active
             vendors (in the past 24 months) such as Camelbak, FLIR, Hunter Defense Technologies, L-3 Communications, Oakley and
             SureFire. Most of the products we distribute require regular replacement due to wear and tear and technological
             advancements. We combine the distribution of our products with our value-added supply chain management services, which
             enable us to streamline the procurement process for our customers by anticipating their product needs, to achieve on-time
             and accurate delivery and to provide in one place a selection of products to meet specific tactical and operational
             requirements. Our value-added supply chain management services include kitting and assembly, custom sourcing, training,
             product research and development and quality assurance and quality management systems.

                 We seek to be a critical partner to each of our customers and vendors. Our value proposition is driven by the combination
             of three key factors:

                    •   Deep-Rooted Customer Relationships. By utilizing our logistics solutions and access to our broad portfolio of
                        contractual procurement vehicles, our customers may save time and money, which generates repeat business and
                        fosters deep relationships with our customers.

                    •   Strategic Vendor Alliances. Our vendors are able to leverage our experienced sales force, product knowledge,
                        customer relationships and access to contractual procurement vehicles to drive demand for their products and reach a
                        customer base that may otherwise be difficult for them to access independently.

                    •   Broad Portfolio of Contractual Procurement Vehicles. Our contractual procurement vehicles provide multiple
                        channels through which our customers can purchase, and our vendors can sell, any of the over 160,000 items we
                        offer without the need for time-consuming individual contracts or open-market bid


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                        processes. Our contractual procurement vehicles give our vendors access to customers they may not independently
                        have and enable the U.S. government to realize increased procurement efficiencies.


             Our Market Opportunity

                 We believe our addressable market is approximately $100 billion, of which our current market share is approximately
             1%. Our primary customers include U.S. government agencies whose funds come from, among other sources, the
             Readiness & Support portion of the Operation & Maintenance budget, which is allocated from the larger Department of
             Defense base budget. According to the Department of Defense‟s 2011 budget projections, from 2011 through 2015, the
             Operations & Maintenance budget‟s share of the total Department of Defense base budget is expected to increase, with an
             expected compound annual growth rate of approximately 5%, compared to 3% for the Department of Defense base budget.
             We believe the Operation & Maintenance budget is stable and growing because it funds ongoing military readiness and
             training and thus is not driven by active and ongoing conflicts.

                 The need for our capabilities and services developed over the last decade, as the U.S. government began to shift away
             from standardized products and equipment built to government specifications, towards readily available, commercial
             off-the-shelf products and equipment. In addition, over the same period, the Department of Defense‟s focus has shifted away
             from developing large-scale weapons platforms for use in conflicts with other major world powers and towards equipping
             personnel to engage in ground-based, irregular warfare against asymmetric threats. Finally, the role of the U.S. military is
             expanding beyond the scope of its traditional national defense function. We believe that the following trends will increase
             the demand for our tactical and operational equipment and value-added supply chain management services:

                    •   Continuous Commitment to Operational Readiness and Troop Modernization. The U.S. Army has transitioned to a
                        model that rotates units between three levels of deployment readiness—“preparation,” “eligible” and “available.” As
                        new units rotate into each level of readiness, they are issued new and modernized equipment.

                    •   Broader Array of Mission Objectives. Increasingly, the branches of the U.S. military are called upon to undertake
                        missions beyond the scope of their traditional national defense functions, such as assistance with disaster relief,
                        border patrol and nation-building.

                    •   Need for Tightly Integrated and Specialized Equipment. The Department of Defense is focused on ensuring that
                        each soldier is properly equipped with state-of-the art equipment. Consequently, the average spend-per-soldier has
                        increased historically and is expected to continue to grow.

                    •   Need for Increased Manpower to Counter Asymmetrical Threats. The threat of simultaneous, irregular conflicts
                        requires significant numbers of trained and properly equipped troops ready to deploy on short notice.

                    •   Increasing Importance of Expeditionary Warfare Units. The U.S. Army, the U.S. Air Force and the U.S. Navy
                        reorganized to increase the effectiveness and availability of their expeditionary warfare units, which are mobile and
                        self-sufficient units that operate away from established bases and are able to deploy quickly.


             Our Competitive Strengths

                    The following competitive strengths differentiate us from our competitors and are critical to our continued success:

                Deep-Rooted Customer Relationships. We aim to be a one-stop-shop for our customers‟ tactical and operational
             equipment needs by streamlining the procurement process and providing value-added supply chain management services.
             Many of our customers have come to depend on us to manage the procurement process for them and to introduce them to
             new products and provide insight as to those products best-suited to their particular needs. Our ability to establish, sustain
             and grow these relationships would be difficult and expensive for any one competitor to replicate.


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                 Value-Added Supply Chain Solutions. We are able to effectively manage and coordinate a fragmented supply chain to
             provide complete and on-time delivery of products to our customers at attractive prices. We tailor our services to provide
             efficient and compelling solutions to meet our customers‟ needs and requirements. By reducing complexities and increasing
             efficiencies in their procurement processes, we believe we are a critical partner to our customers.

                Scalable Infrastructure. Our recent investment in scalable infrastructure and operations gives us the capacity to build
             upon our past performance with minimal future capital expenditures. As a result of our asset-light operating model, we
             generate significant free cash flow (calculated as cash flow from operations minus capital expenditures) and have relatively
             low capital expenditures and working capital requirements. For example, for the year ended December 31, 2010,
             approximately 51% of our net sales were from orders shipped directly from the vendor.

                 Extensive Vendor Relationships and Preferred Vendor Program. We are the primary avenue into the government sales
             channel for many of our vendors as a result of our familiarity with the complexities of government procurement and our
             access to customers in U.S. government agencies. As a result, new vendors seek to establish relationships with us, allowing
             us to continue to expand the breadth of products we offer, which is critical to our customer base. We are able to
             competitively bid on opportunities as a result of the preferential terms and support we receive from our preferred vendors.

                 Broad Portfolio of Contractual Procurement Vehicles. Our access to a broad portfolio of contractual procurement
             vehicles makes the sale and procurement process easier and faster for both our customers and our vendors. We use the term
             “contractual procurement vehicle” to refer to a type of government contract that is awarded to a limited number of suppliers,
             authorizing those suppliers to compete for specific purchase orders from different government entities. Contractual
             procurement vehicles do not commit the government to buy a set amount of goods or services, but instead, allow the supplier
             to sell certain goods or services to the government under the particular contract it holds. Obtaining the type of contractual
             procurement vehicles used by our customers requires a demonstrated track record of past performance, which makes our
             portfolio of contractual procurement vehicles difficult to replicate.

                 Experienced Sales Force. A substantial portion of our sales personnel have extensive military experience. Their
             comprehensive capabilities, including the valuable feedback regarding products they provide to both customers and vendors
             and their ability to identify suitable contractual procurement vehicles, enhance our key relationships while ensuring superior
             customer service.

                 Dedicated and Capable Management Team. With substantial operational experience and functional knowledge, our
             senior management team has successfully led the formation and development of our business model and overseen significant
             growth in our net sales and EBITDA.

             Our Growth Strategy

                Further Penetrate our Primary Customer Base. Our primary customer base is fragmented and characterized by a
             decentralized procurement process. Our sales force currently calls on only a small percentage of the purchasing decision
             makers at both the program and unit levels of the U.S. military. We expect to increase sales to our existing customers and
             add new customers within our primary customer base using the following key growth strategies:

                    •   Continue to Expand our Sales Force. We intend to expand the size of our sales force. In 2010, we increased the
                        overall size of our sales force by 48 representatives, representing a 41% increase from 2009 fiscal year end. With
                        additional sales representatives, we believe we can replicate our prior unit-level successes in currently underserved
                        units.

                    •   Expand our Product Offerings. We continue to expand the breadth of our product offerings as we strive to meet the
                        constantly changing needs of our customers. Our sales force continuously evaluates our customers‟ needs in order to
                        design solutions to meet those needs and drive demand for the products and related services we offer. We then work
                        directly with our vendor partners to increase the


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                        breadth and quality of our available product lines specifically based on our customers‟ needs. This approach is
                        designed to ensure that we offer the latest and best available commercial off-the-shelf products.

                    •   Increase Demand for our Value-Added Supply Chain Solutions. We intend to further develop and drive demand for
                        our customer-centric, value-added supply chain solutions and to focus on expanding our kitting and assembly and
                        large integration programs. These solutions increase the readiness and effectiveness of our customers, which we
                        believe will increase demand for the products and related services we offer.

                Increase the Number, Size and Scope of our Contractual Procurement Vehicles. In order to enhance the flexibility
             provided by our existing portfolio of contractual procurement vehicles, we will continue to compete strategically for new
             contractual procurement vehicles. We are actively pursuing a number of opportunities to obtain contractual procurement
             vehicles that are currently in the development stage.

                Add New Categories of Customers Outside of our Traditional Markets. We believe that we are well positioned to forge
             new relationships by targeting potential customers that we do not currently serve or who are not yet material to our
             operations, including the Department of Homeland Security and other federal agencies. Furthermore, we believe there are
             opportunities to provide the products and related services we offer in the U.S.-assisted equipping of allied foreign militaries
             and security services.

                Pursue Selected Acquisitions. We may supplement our organic growth by pursuing selected acquisitions aimed at
             augmenting our contractual procurement vehicle portfolio, broadening and diversifying our customer base, expanding our
             product offerings and vendor network or increasing our geographic presence.

             Recent Developments

                 On March 25, 2011, in a transaction exempt from registration under the Securities Act, we issued $275.0 million of
             11.00% senior secured notes due 2018, which we refer to as the “senior secured notes.” Concurrently with the closing of the
             offering of the senior secured notes, we amended and restated our senior secured revolving credit facility to, among other
             things, permit the offering of the senior secured notes and to permit distributions to our stockholders. The proceeds from the
             offering of the senior secured notes, along with amounts drawn from our senior secured revolving credit facility, were used
             (1) to make a distribution of $217.1 million to our stockholders, (2) to repay our 2010 senior secured term loan facility,
             which we refer to as our “term loan facility,” (3) to pay cash bonuses, which we refer to as “transaction bonuses,” to certain
             members of our senior management in an amount not to exceed $9.0 million, $6.6 million of which was paid upon
             consummation of the offering of the senior secured notes and the remainder of which will be paid upon the earlier of (x) the
             consummation of this offering and (y) December 31, 2011 and (4) to pay related transaction fees and expenses. In this
             prospectus, we refer to the offering of the senior secured notes, the prepayment of our term loan facility, the distribution to
             our stockholders, the amendment and restatement of our senior secured revolving credit facility, the payment of the
             transaction bonuses and the payment of fees and expenses in connection with the foregoing transactions collectively as the
             “refinancing transactions.” See “Description of Certain Indebtedness.”

             Risk Factors

                 An investment in our common stock involves substantial risks and uncertainties. We are subject to a number of risks,
             including risks that may prevent us from achieving our business objectives or may adversely affect our business, results of
             operations and financial condition. See “Risk Factors” beginning on page 10 for a discussion of the material risks that
             prospective purchasers should consider before investing in our common stock. Some of the more significant risks relating to
             our business include, among others:

                    •   our business is dependent on maintaining our relationships with our customers and developing relationships with
                        new customers;

                    •   we are a government contractor and rely on U.S. government entities for substantially all of our sales;

                    •   the government contract representing approximately 19% of our total net sales for the year ended December 31,
                        2010 is currently in the final year of its five-year term and the government contract representing approximately 44%
                        of our total net sales for the same period is up for renewal in March 2012;


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                    •   our business is dependent on maintaining our relationships with key vendors and developing relationships with new
                        vendors;

                    •   we are dependent on the performance of our vendors in meeting the needs of our customers;

                    •   we are subject to extensive laws and regulations as a result of our status as a government contractor and as a result of
                        the products we sell and the business we conduct abroad;

                    •   we are dependent on receiving distributions from our subsidiaries due to our status as a holding company;

                    •   we are exempt from certain corporate governance requirements as a result of our status as a “controlled company”
                        within the meaning of the New York Stock Exchange rules;

                    •   upon completion of this offering, the selling stockholders will continue to own a majority of our common stock and
                        therefore will continue to have significant influence over matters submitted to a stockholder vote; and

                    •   our substantial indebtedness could adversely affect our financial flexibility and our competitive position.



             Additional Information

                 We were originally incorporated in Virginia in 1997. We are currently a subchapter S corporation under the rules and
             regulations of the Internal Revenue Service. As a result, income taxes attributable to our federal and state income are payable
             by our stockholders. Distributions have been paid to stockholders to fund their tax obligations related to their ownership of
             ADS Tactical, Inc.

                In connection with this offering, we will convert to a subchapter C corporation. In connection with our conversion from a
             subchapter S corporation to a subchapter C corporation, we will record a tax benefit (estimated to be approximately
             $500,000 as if the conversion occurred on December 31, 2010) to recognize deferred taxes.

                 Our principal executive offices are located at 621 Lynnhaven Parkway, Suite 400, Virginia Beach, Virginia 23452. Our
             telephone number is (757) 481-7758. Our website address is http://www.adsinc.com . Information on our website is not
             considered part of this prospectus.


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                                                                         The Offering

             Issuer                                            ADS Tactical, Inc.

             Shares of common stock offered by us                     shares.

             Shares of common stock offered by the
               selling stockholders                                   shares.

             Common stock to be outstanding after this
              offering                                                shares.

             Use of proceeds                                   We estimate that the net proceeds to us from this offering, after deducting
                                                               underwriting discounts and estimated offering expenses, will be
                                                               approximately $      (or approximately $       million if the underwriters
                                                               exercise their over-allotment option in full), assuming the common stock is
                                                               offered at $    per share, the midpoint of the range set forth on the cover page
                                                               of this prospectus. We intend to use the net proceeds from this offering (1) to
                                                               make a final distribution of $   million to our existing stockholders in
                                                               connection with the termination of our S corporation status, (2) to exercise
                                                               our option to redeem up to 35% of our senior secured notes and (3) to the
                                                               extent any proceeds remain, to repay a portion of the amounts outstanding
                                                               under our senior secured revolving credit facility. We will not receive any
                                                               proceeds from the sale of shares of our common stock by the selling
                                                               stockholders. See “Use of Proceeds.”

             Risk factors                                      See “Risk Factors” and other information included in this prospectus for a
                                                               discussion of factors you should carefully consider before deciding to invest
                                                               in shares of our common stock.

             Listing                                           We will apply to have our common stock listed on the New York Stock
                                                               Exchange under the trading symbol “ADSI.”

                    Except as otherwise indicated, all information in this prospectus:

                    •   excludes option grants expected to occur concurrently with the consummation of this offering and all shares reserved
                        for future issuance pursuant to our 2011 Equity Incentive Award Plan;

                    •   gives effect to the filing of our amended and restated certificate of incorporation, effecting a     -for-1 stock split
                        with respect to our common stock, which will occur prior to the effective date of the registration statement of which
                        this prospectus is a part; and

                    •   assumes no exercise by the underwriters of their option to purchase         additional shares from us and the selling
                        stockholders in this offering. See “Principal and Selling Stockholders.”


                                                                            6
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                                                 Summary Consolidated Financial and Other Data

                 The following tables summarize the consolidated financial and other data for our business, as well as certain pro forma
             information that gives effect to our conversion from a subchapter S corporation to a subchapter C corporation as if it
             occurred on January 1 of each period. You should read this summary consolidated financial and other data in conjunction
             with “Use of Proceeds,” “Capitalization,” “Selected Consolidated Financial and Other Data,” “Management‟s Discussion
             and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related
             notes, all included elsewhere in this prospectus.

                 We derived the consolidated statements of operations data for the years ended December 31, 2008, 2009 and 2010 from
             our audited consolidated financial statements. Our audited consolidated financial statements as of December 31, 2009 and
             2010 and for the fiscal years ended December 31, 2008, 2009 and 2010 have been included elsewhere in this prospectus.


                                                                                                            Year Ended
                                                                                                           December 31,
                                                                                            2008                2009                  2010
                                                                                                (In thousands, except per share data)


             Consolidated Statements of Operations Data:
             Net sales                                                                  $ 660,535          $ 932,177           $    1,330,840
             Costs and Expenses:
                Cost of goods sold                                                          572,992            809,117              1,166,391
                Selling, general and administrative                                          44,323             60,897                 80,945
                Intangible asset impairment                                                      —               2,996                     —
             Income from operations                                                          43,220             59,167                 83,504
             Interest income                                                                    225                 84                    127
             Interest expense (1)                                                            (1,481 )           (1,401 )               (5,388 )
             Net income                                                                      41,964              57,850                 78,243
             Net income attributable to common stockholders                             $    42,010        $     57,709        $        77,282

             Pro Forma Data (unaudited):
             Pro forma provision for income taxes (2)                                   $    16,594        $     22,795        $        30,913
             Pro forma net income (1)(3)                                                     25,416              34,914                 46,369
             Pro forma earnings per common share (3) :
               Basic
               Diluted
             Weighted average common shares outstanding:
               Basic
               Diluted
             Other Data:
             Net cash provided by operating activities                                  $    15,893        $     35,291        $        31,742
             Net cash used in investing activities                                          (14,888 )            (6,586 )               (2,947 )
             Net cash provided by (used in) financing activities                                492             (29,547 )              (27,340 )
             Depreciation and amortization                                                    2,049               2,140                    974
             Sales representatives at end of period (4)                                          87                 118                    166
             Capital expenditures                                                             8,297               9,181                  3,387
             EBITDA (5)                                                                      45,269              61,307                 84,478




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                                                                                                                As of December 31, 2010
                                                                                                               Actual
                                                                                                             As Adjusted         Pro Forma
                                                                                                                 (6)                    (6)
                                                                                                                       (In thousands)


             Consolidated Balance Sheet Data (unaudited):

             Cash and cash equivalents                                                                     $       2,810
             Working capital                                                                                      48,416
             Total debt                                                                                          381,825
             Total stockholders‟ equity (deficit)                                                               (210,052 )


              (1) Reflects historical interest expense. Annual interest expense is expected to increase from historical interest expense by
                  approximately $30 million as a result of the refinancing transactions. After further giving effect to the use of proceeds
                  from this offering, assuming our common stock is offered at $        per share, the midpoint of the range set forth on the
                  cover page of this prospectus, annual interest expense is expected to increase from historical interest expense by
                  approximately $        million, assuming redemption of up to 35% of our senior secured notes, the maximum amount
                  permitted to be redeemed under the senior secured notes indenture, and $        million to repay a portion of the
                  amounts remaining outstanding under our senior secured revolving credit facility. See “Prospectus Summary —
                  Recent Developments” and “Management‟s Discussion and Analysis — Liquidity and Capital Resources.”

              (2) We historically have been treated as a subchapter S corporation for U.S. federal income tax purposes. As a result, our
                  income has not been subject to U.S. federal income taxes or state income taxes in those states where S corporation
                  status is recognized. In general, the corporate income or loss of a subchapter S corporation is allocated to its
                  stockholders for inclusion in their personal federal income tax returns and state income tax returns in those states
                  where S corporation status is recognized. In connection with this offering, we will convert from a subchapter S
                  corporation to a subchapter C corporation. Pro forma provision for income taxes reflects combined federal and state
                  income taxes on a pro forma basis, as if we had been taxed as a subchapter C corporation, using an effective tax rate of
                  39.5% for 2008 and 2009 and an effective tax rate of 40.0% for 2010.

              (3) Reflects historical income before income taxes less the pro forma provision for income taxes. Does not give pro forma
                  effect to the refinancing transactions or the use of proceeds and additional common shares resulting from this offering.

              (4) Does not include those members of our sales force who primarily serve our state and local law enforcement customers,
                  which were 10, 14 and 14 members of our sales force as of December 31, 2008, 2009 and 2010, respectively, because
                  these members perform fundamentally different functions in the sales process than the other members of our sales
                  force. See “Management‟s Discussion and Analysis of Financial Condition and Results of Operations — Components
                  of Our Consolidated Statements of Operations — Net Sales.”

              (5) We define EBITDA as net income before interest expense, provision for income taxes and depreciation and
                  amortization. EBITDA is not a measure of financial performance under U.S. GAAP and should not be considered as
                  an alternative to net income as a measure of performance. Because EBITDA is not a measurement determined in
                  accordance with U.S. GAAP and is susceptible to varying calculations, EBITDA, as presented, may not be comparable
                  to other similarly titled measures presented by other companies. We believe that EBITDA is a useful financial metric
                  to assess our operating performance from period to period by excluding certain items that we believe are not
                  representative of our core business, as well for providing a comparison of our operating performance to that of other
                  companies in our industry.

                    We use EBITDA in a number of ways, including:

                    •   for planning and budgeting purposes;

                    •   to evaluate the effectiveness of our business strategies;

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                    •   in communications with our board of directors concerning our consolidated financial performance; and

                    •   to determine management‟s compensation.

                    The following table reconciles net income, the most directly comparable GAAP financial measure, to EBITDA:


                                                                                                                Year Ended
                                                                                                                December 31,
                                                                                                    2008             2009           2010
                                                                                                               (In thousands)


             Net income                                                                          $ 41,964        $ 57,850        $ 78,243
             Interest expense, net(a)                                                               1,256           1,317           5,261
             Depreciation and amortization                                                          2,049           2,140             974
             EBITDA(b)                                                                           $ 45,269        $ 61,307        $ 84,478




              (a) Interest expense, net for the year ended December 31, 2010 includes amortization of deferred financing costs of
                  $537,143.

              (b) For the year ended December 31, 2009, EBITDA was negatively impacted by a write off of approximately
                  $3.0 million related to our acquisition of MAR-VEL International, Inc. See “Management‟s Discussion and Analysis
                  of Financial Condition and Results of Operations — Acquisition of MAR-VEL International, Inc.” In addition, for the
                  year ended December 31, 2010, EBITDA was negatively impacted by costs consisting principally of legal, accounting
                  and other professional fees incurred in connection with this offering and the pursuit of other strategic opportunities and
                  financings.

                 EBITDA has limitations as an analytical tool and you should not consider it in isolation, or as a substitute for analysis of
             our results as reported under GAAP. See “Non-GAAP Financial Measures.”

              (6) Actual as adjusted balance sheet data reflects the refinancing transactions described under “— Recent Developments.”
                  Pro forma balance sheet data reflects the refinancing transactions described under “— Recent Developments” and
                  further assumes that the net proceeds to us from this offering, after deducting underwriting discounts and estimated
                  offering expenses, will be approximately $       (assuming no exercise by the underwriters of their over-allotment
                  option), assuming the common stock is offered at $       per share, the midpoint of the range set forth on the cover page
                  of this prospectus and gives effect to the use of proceeds from this offering (1) to make a final distribution of
                  $     million to our existing stockholders in connection with the termination of our S corporation status, (2) to exercise
                  our option to redeem up to 35% of our senior secured notes and (3) to the extent any proceeds remain, to repay a
                  portion of the amounts outstanding under our senior secured revolving credit facility. See “Use of Proceeds” and
                  “Capitalization.”


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                                                               RISK FACTORS

             Purchasing our common stock in this offering involves a high degree of risk. You should carefully consider the following
         factors, in addition to the other information contained in this prospectus, in deciding whether to invest in our common stock.
         This prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results may differ
         significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include
         those discussed below.


         Risks Related to Our Business

         If we are unable to maintain our relationships with our customers or are unable to develop relationships with new
         customers, it could adversely affect our operating performance and our ability to generate cash flow to fund our
         operations.

            Sales of the products and related services we offer to our five largest customers amounted to 47% of our net sales for the
         year ended December 31, 2010. For the year ended December 31, 2010, our three largest customers were the U.S. Army‟s
         Natick Soldier Systems, the United States Army Research, Development and Engineering Command, and the Defense
         Supply Center Philadelphia, which generated approximately 24%, 8% and 6% of our sales, respectively.

             Among the key factors in maintaining our relationships with federal government agencies is our performance on
         individual contracts and purchase orders and the strength of our professional reputation. The loss of, or deterioration in, our
         relations with one or more of our significant customers or our inability to develop relationships with new customers would
         adversely affect our business, results of operations and financial condition.


         We rely on U.S. government entities for substantially all of our sales. A loss of or a failure to obtain new contractual
         procurement vehicles could adversely affect our operating performance and our ability to generate cash flow to fund our
         operations.

             We generate substantially all of our sales from contracts with the U.S. government and its agencies, primarily the
         agencies and offices within the Department of Defense. For the year ended December 31, 2010, approximately 97% of our
         net sales were derived directly or indirectly from sales to U.S. government agencies, including approximately 88% to
         agencies and offices within the Department of Defense. We expect that Department of Defense contracts will continue to be
         our primary source of sales for the foreseeable future. The continuation and renewal of our existing government contracts
         and new government contracts are, among other factors, contingent upon the availability of adequate funding for various
         U.S. government agencies, including the Department of Defense. The loss or significant curtailment of our material
         government contracts, or our failure to renew existing contracts or enter into new contracts would adversely affect our
         business, results of operations and financial condition.

              Total sales under our Special Operational Equipment Tailored Logistics Support Program, or “Spec Ops TLS,” contract
         amounted to approximately 44% of our total net sales for the year ended December 31, 2010, respectively. Total sales under
         our Generation III Extended Cold Weather Clothing System, or “GEN III,” contract amounted to approximately 19% of our
         total net sales for the year ended December 31, 2010. Our GEN III contract typically contributes an equal amount to our
         sales each month. Sales under our three federal supply schedules with the U.S. General Services Administration aggregated
         approximately 9% of our total net sales for the year ended December 31, 2010, respectively. Sales under one or more of
         these contracts could end for a number of reasons, including the completion of the customer‟s requirements, the completion
         or early termination of our current contract, the consolidation of our work into another contract where we are not the holder
         of that contract, or the loss of a competitive bid for the follow-on work related to our current contract. For example, our GEN
         III contract is currently in the final year of its five-year term and our Spec Ops TLS contract, which was recently renewed for
         an additional one-year period, is up for another option year renewal in March 2012. If the GEN III contract or the Spec Ops
         TLS contract is not continued, or if they are re-competed and awarded to another bidder, we would no longer have any sales
         under these contracts.


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         The occurrence of any of these events could adversely affect our business, results of operations and financial condition.

         Changes in the spending policies or budget priorities of the U.S. government, and the Department of Defense in
         particular, or delays in the passage of the U.S. government budget, could cause us to lose sales.

              Changes in U.S. government spending could affect our operating performance and lead to an unexpected loss of sales.
         The loss or significant reduction in funding by the Department of Defense for any of the large programs in which we
         participate could also result in a material decrease to our future sales, earnings and cash flows. Congress usually appropriates
         funds to procuring agencies, such as the Department of Defense, who then allocate funds for a given program or contract on
         a September 30 fiscal year basis, even though contract periods of performance may extend over many years. Consequently,
         at the beginning of a program, the contract may be only partially funded, with additional monies committed to the contract
         by the procuring agency only as appropriations are made by Congress for future fiscal years. The factors that could impact
         U.S. government spending and reduce our federal government contracting business include:

              •     policy and/or spending changes implemented by the current administration;

              •     a significant decline in, or reallocation of, spending by the U.S. government, in general, or by the Department of
                    Defense, in particular;

              •     changes, delays or cancellations of U.S. government programs, requirements or policies;

              •     the adoption of new laws or regulations that affect companies that provide services to the U.S. government;

              •     U.S. government shutdowns or other delays in the government appropriations process;

              •     curtailment of the U.S. government‟s outsourcing of procurement and logistics services to private contractors;

              •     changes in the political climate, including with regard to the funding or operation of the products and related
                    services we offer;

              •     developments in Iraq or Afghanistan, including the sustained withdrawal of troops, or other geopolitical
                    developments that affect demand for our services and the products we offer; and

              •     general economic conditions, including a slowdown in the economy or unstable economic conditions in the United
                    States or in the countries in which we operate.

             These or other factors could cause U.S. government agencies to reduce their purchases under our contracts, to exercise
         their right to terminate our contracts in whole or in part, or decline to exercise options to renew our contracts.

             A delay in the passage of the U.S. government‟s budget could delay procurement of the services and solutions we
         provide and have an adverse effect on our future sales. In years when the U.S. government does not complete its budget
         process before the end of its fiscal year on September 30, government operations are typically funded pursuant to a
         “continuing resolution” that authorizes agencies of the U.S. government to continue to operate, but does not authorize new
         spending initiatives. When the U.S. government operates under a continuing resolution, government agencies may delay or
         cancel funding we expect to receive from customers on work we are already performing and new initiatives and programs
         are likely to be delayed or cancelled, which could materially adversely affect our business, results of operations and financial
         condition.


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         Federal government contracts contain provisions giving government customers a variety of rights that are unfavorable to
         us, including the ability to terminate a contract at any time for convenience.

            Federal government contracts contain provisions and are subject to laws and regulations that give the government rights
         and remedies not typically found in commercial contracts. These provisions may allow the government to:

              •     terminate existing contracts for convenience, as well as for default;

              •     reduce orders under contracts or subcontracts;

              •     cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become
                    unavailable;

              •     decline to exercise an option to renew a multi-year contract;

              •     suspend or debar us from doing business with the federal government or with a governmental agency;

              •     prohibit future procurement awards with a particular agency as a result of a finding of an organizational conflict of
                    interest based upon prior related work performed for the agency that would give a contractor an unfair advantage
                    over competing contractors;

              •     subject the award of contracts to protest by competitors, which may require the contracting agency or department to
                    suspend our performance pending the outcome of the protest;

              •     claim rights in products and systems produced by us; and

              •     control or prohibit the export of the products and related services we offer.

             If the U.S. government terminates a contract for convenience, we may recover only our incurred or committed costs,
         settlement expenses and profit on work completed prior to the termination. If the government terminates a contract for
         default, we may not even recover those amounts and instead may be liable for excess costs incurred by the government in
         procuring undelivered items and services from another source. Our contracts with foreign governments generally contain
         similar provisions relating to termination at the convenience of the customer.

             Some of our U.S. government contracts have an initial term of two years with multiple option periods, exercisable at the
         discretion of the government at previously negotiated prices. The government is not obligated to exercise any option under a
         contract. Furthermore, the government is typically required to open all programs to competitive bidding and, therefore, may
         not automatically renew a contract. In addition, at the time of completion of any of our government contracts, the contract is
         frequently required to be re-opened to competitive bidding.

             If one of our government customers were to unexpectedly terminate, cancel or decline to exercise an option to renew one
         or more of our significant contracts or programs, our failure to replace sales generated from such contracts would result in
         lower sales and have an adverse effect on our earnings, which would adversely affect our business, results of operations and
         financial condition.

         We depend on our relationships with key vendors. If we are not able to maintain these relationships, our net sales,
         profitability and growth prospects could be adversely affected.

             The success of our business depends to a large extent on our strategic relationships with key vendors and our ability to
         maintain a sufficient supply of products to meet our customers‟ needs. In 2010, our top ten vendors accounted for
         approximately 52% of the products we purchased for resale, and no vendor accounted for over 11% of the products we
         purchased for resale. Our relationships with our vendors can be terminated by either party at any time. If we lost a vendor
         and were unable to substitute products from another vendor, it would adversely affect our business, results of operations and
         financial condition.
   Additionally, we have instituted a preferred vendor program, comprised of approximately 300 vendors in an effort to
secure preferential terms and support. We rely on these preferred vendor relationships in order to improve the likelihood of
winning bids for new contractual procurement vehicles, to win orders under existing


                                                             12
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         contractual procurement vehicles. In the event that we are unable to maintain those preferred vendor relations, the loss of
         preferential terms and support would adversely affect our business, results of operations and financial condition.

         If our vendors do not meet our needs or expectations, or those of our customers, our business would suffer.

             The success of our business depends on our reputation for providing logistics and supply chain solutions. The products
         we provide to customers are purchased from approximately 1,400 active vendors (in the past 24 months). We do not
         manufacture any of the products we provide to our customers and we rely on third-party vendors to deliver the products that
         we sell to our clients. As a result, we do not directly control the manufacturing or availability of the products provided by
         our vendors. If our vendors do not meet our needs or expectations, or those of our customers, our professional reputation
         may be damaged and our business would be harmed.

              Supply interruptions could arise from shortages of raw materials, labor disputes or weather conditions affecting vendors‟
         production, transportation disruptions, or other reasons beyond our control. We may have disputes with our vendors arising
         from, among other things, the quality of products and services or customer concerns about the vendor. If any of our vendors
         fail to timely meet their contractual obligations or have regulatory compliance or other problems, our ability to fulfill our
         obligations may be jeopardized. Economic downturns can adversely affect a vendor‟s ability to manufacture or deliver
         products. Further, vendors may also be enjoined from manufacturing and distributing products to us as a result of litigation
         filed by third parties, including intellectual property litigation. If we were to experience difficulty in obtaining certain
         products, there could be an adverse effect on our results of operations and on our customer relationships and our reputation.
         Additionally, our key vendors could also increase pricing of their products, which could negatively affect our ability to win
         contracts by offering competitive prices, which, in turn, would adversely affect our business, results of operations and
         financial condition.


         We generate substantially all of our sales from contracts awarded through competitive procurement processes, which can
         impose significant costs upon us and negatively impact our results of operations and financial condition.

            We generate substantially all of our sales from federal government contracts that are awarded through a competitive
         procurement process. Competitive procurement imposes significant costs and presents a number of risks to us, including:

              •     the substantial cost and managerial time and effort that we spend to prepare bids and proposals for contracts that
                    may not be awarded to us and schedules that may not be used; and

              •     the expense and delay that we may face if our competitors protest or challenge our contract awards, and the risk that
                    any such protest or challenge could result in the rebidding of offers, or in termination, reduction or modification of
                    the awarded contract.

             The government contracts for which we compete typically have multiple option periods, and if we fail to win a contract
         or fail to perform under a contract, we generally will be unable to compete again for that contract for several years. Because
         of the nature of our business, we could lose contracts to competitors during recompete periods. Additionally, some contracts
         reach the end of their terms as projects are completed, funding is terminated or the contract ceiling is reached. If we fail to
         win new contracts, receive renewal options or continue with an existing contract upon recompetition, it may result in
         additional costs and expenses and loss of sales, and we will not have an opportunity to compete for these contract
         opportunities again until such contracts expire.


         Many of our U.S. government customers spend their procurement budgets through multiple-award contracts, under
         which we are required to compete among the awardees for post-award orders. Failure to win post-award orders could
         affect our ability to increase our sales.

            The U.S. government can select multiple winners under multiple-award contracts, federal supply schedules and other
         agency-specific indefinite quantity and indefinite delivery contracts, as well as award subsequent purchase orders among
         such multiple winners. This means that there is no guarantee that these


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         indefinite quantity and indefinite delivery, multiple-award contracts will result in the actual orders equal to the ceiling value
         under the contract, or result in any actual orders. We are only eligible to compete for work (purchase orders and delivery
         orders) as an awardee pursuant to government-wide acquisition contracts already awarded to us. Our failure to compete
         effectively in this procurement environment could reduce our sales, which would adversely affect our business, results of
         operations and financial condition.


         Our failure to comply with a variety of complex procurement rules and regulations could damage our reputation and
         result in our being liable for penalties, including termination of our U.S. government contracts, disqualification from
         bidding on future U.S. government contracts, suspension or debarment from U.S. government contracting.

            We must comply with laws and regulations relating to the formation, administration and performance of
         U.S. government contracts, which affect how we do business with our customers and may impose added costs on our
         business. Some significant laws and regulations that affect us include:

              •     the Federal Acquisition Regulation, or “FAR,” and supplements, which regulate the formation, administration and
                    performance of U.S. government contracts;

              •     the Truth in Negotiations Act, which requires certification and disclosure of cost and pricing data in connection with
                    certain contract negotiations;

              •     the Civil False Claims Act, which provides for substantial civil penalties for violations, including for submission of
                    a false or fraudulent claim to the U.S. government for payment or approval;

              •     the Procurement Integrity Act, which requires evaluation of ethical conflicts surrounding procurement activity and
                    establishing certain employment restrictions for individuals who participate in the procurement process; and

              •     the Small Business Act and the Small Business Administration, or the “SBA,” size status regulations, which regulate
                    eligibility for performance of government contracts which are set-aside for, or a preference is given in the evaluation
                    process if awarded to, specific types of contractors such as small businesses and minority-owned businesses.

             The FAR and many of our U.S. government contracts contain organizational conflicts of interest clauses that may limit
         our ability to compete for or perform certain other contracts. Organizational conflicts of interest arise when we engage in
         activities that provide us with an unfair competitive advantage. A conflict of interest issue that precludes our competition for
         or performance on a significant program or contract could harm our prospects and negative publicity about a conflict of
         interest issue could damage our reputation.

            Any failure to comply with applicable laws and regulations could result in contract termination, damage to our
         reputation, price or fee reductions or suspension or debarment from contracting with the government, each of which could
         materially adversely affect our business, results of operations and financial condition.

            In addition, the U.S. government may revise existing contract rules and regulations or adopt new contract rules and
         regulations at any time and may also face restrictions or pressure regarding the type and amount of services it may obtain
         from private contractors. Congressional legislation and initiatives dealing with mitigation of potential conflicts of interest,
         procurement reform and shifts in the buying practices of U.S. government agencies resulting from those proposals could
         have adverse effects on government contractors, including us. Any of these changes could impair our ability to obtain new
         contracts or renew contracts under which we currently perform when those contracts are eligible for recompetition. Any new
         contracting methods could be costly or administratively difficult for us to implement, which would adversely affect our
         business, results of operations and financial condition.


         Our growth strategy requires us to hire qualified employees in order to expand our sales force. If we fail to attract and
         retain skilled personnel, our ability to maintain and grow our business could be limited.

             Our business involves the development of tailored solutions for our customers, a process that relies heavily upon the
         expertise and services of our employees. Our continued success depends on our ability to recruit and retain highly trained
         sales personnel who preferably have military experience and who work well
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         with our military and federal civilian government customers. Many of our sales personnel are former members of the
         military and have specific knowledge of and experience with our federal government customers‟ operations, and we obtain
         some of our contracts based on that knowledge and experience. The loss of services of key personnel could impair our ability
         to win new business. Competition for personnel in the military industry is intense, and recruiting, training and retention costs
         place significant demands on our resources. If we are unable to recruit and retain a sufficient number of qualified employees,
         in particular, highly trained sales personnel, our ability to maintain and grow our business would be limited.


         Our business is subject to reviews, audits and price adjustments by the U.S. government, which, if resolved unfavorably to
         us, would adversely affect our business, results of operations and financial condition.

             U.S. government agencies, including the Department of Defense and others, routinely audit and review a contractor‟s
         performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and
         procurement laws, regulations and standards. Based on the results of such audits, the auditing agency is authorized to adjust
         our unit prices if the auditing agency does not find them to be “fair and reasonable.” The auditing agency is also authorized
         to require us to refund any excess proceeds we received on a particular item over its final adjusted unit price.

             The Department of Defense, in particular, also reviews the adequacy of, and compliance with, our internal control
         systems and policies, including our purchasing, accounting, financial capability, pricing, labor pool, overhead rate and
         management information systems. Our failure to obtain an “adequate” determination of our various accounting and
         management internal control systems from the responsible U.S. government agency could significantly and adversely affect
         our business, including our ability to bid on new contracts and our competitive position in the bidding process. Failure to
         comply with applicable contracting and procurement laws, regulations and standards could also result in the
         U.S. government imposing penalties and sanctions against us, including suspension of payments and increased government
         scrutiny that could delay or adversely affect our ability to invoice and receive timely payment on contracts or perform
         contracts, or could result in suspension or debarment from competing for contracts with the U.S. government. In addition, we
         could suffer serious harm to our reputation if allegations of impropriety were made against us, whether or not true.

              If, as the result of an adverse audit finding, we were suspended or prohibited from contracting with the U.S. government,
         or any significant U.S. government agency, if our reputation or relationship with U.S. government agencies was impaired or
         if the U.S. government otherwise ceased doing business with us or significantly decreased the amount of business it does
         with us, it would adversely affect our business, results of operations and financial condition.


         Our sales will be adversely affected if we fail to receive renewal or follow-on contracts.

             Renewal and follow-on contracts are important because our contracts are typically for fixed terms. The typical term of
         our contracts with the U.S. government is between one and two base years, with three to four option years following. In
         particular, our GEN III contract is currently in the final year of its five-year term and our Spec Ops TLS contract, which was
         recently renewed for an additional one-year period, is up for another option year renewal in March 2012. If the GEN III
         contract or the Spec Ops TLS contract is not continued, or if they are re-competed and awarded to another bidder, we would
         no longer have any sales under these contracts. The loss of sales from our possible failure to obtain renewal or follow-on
         contacts would adversely affect our business, results of operations and financial condition.


         Our sales abroad to U.S. customers and to certain foreign customers expose us to risks associated with operating
         internationally.

             Our sales abroad to non-U.S. customers outside of the United States currently generate a limited portion of our total net
         sales. However, as we seek to expand internationally and increase our sales to foreign


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         governments and allied militaries, our international business operations may be subject to additional and different risks than
         our domestic business, including the following:

              •     compliance with the Arms Export Control Act and Export Administration Regulations, or “EAR”;

              •     compliance with the U.S. Foreign Corrupt Practices Act, or “FCPA,” and equivalent foreign regulations;

              •     compliance with the International Traffic in Arms Regulations, or “ITAR”;

              •     compliance with the trade sanctions laws and regulations administered by the U.S. Department of the Treasury‟s
                    Office of Foreign Assets Control, or “OFAC”;

              •     the burden and cost of compliance with foreign laws, treaties and technical standards and changes in those
                    regulations;

              •     contract award and funding delays;

              •     potential restrictions on transfers of funds;

              •     import and export duties and value added taxes;

              •     transportation delays and interruptions;

              •     uncertainties arising from foreign local business practices and cultural considerations; and

              •     potential military conflicts and political risks.

             Failure to comply with U.S. government laws and regulations applicable to transactions abroad would have an adverse
         impact on our business with the U.S. government and could expose us to administrative, civil or criminal penalties, and/or
         suspension and debarment from U.S. government contracting. Failure to comply with applicable foreign laws and
         regulations could also have an adverse impact on our business abroad and could expose us to non-U.S. administrative, civil
         or criminal penalties. Additionally, these risks related to international operations may expose us to potentially significant
         contract losses.

             In some countries, there is increased chance for economic, legal or political changes that may adversely affect the
         performance of our services, sale of our products or repatriation of our profits. We do not know the impact that these
         regulatory, geopolitical and other factors may have on our business in the future and any of these factors would adversely
         affect our business, results of operations and financial condition.

         We may not be able to receive the necessary licenses required for us to sell our export-controlled products overseas. In
         addition, the loss of our registration as either an exporter or a broker under ITAR would adversely affect our business,
         results of operations and financial condition.

             U.S. government agencies, primarily the Directorate of Defense Trade Controls within the State Department and the
         Bureau of Industry Security within the U.S. Department of Commerce, must license every shipment of export-controlled
         products that we export. These licenses are required due to both the products we export and to the foreign customers we
         service. If we do not receive a license for an export-controlled product, we cannot ship that product. We cannot be sure of
         our ability to gain any licenses required to export our products, and failure to receive a required license would eliminate our
         ability to make that sale. A delay in obtaining the necessary licenses to sell our export-controlled products abroad could
         result in delayed deliveries and delayed recognition of revenue, which could cause us reputational damage and could result
         in a customer‟s decision not to do business with us in the future.

             In addition to obtaining a license for each of our exports outside of the United States, we are also required to maintain a
         standing registry under ITAR as both a broker and an exporter. We operate as a broker when we facilitate sales between a
         foreign party shipping products directly to a buyer outside the United States or to a foreign customer. We operate as an
         exporter when we ship products to our customers outside the United States. If we were to lose our registration as either a
broker or an exporter under ITAR, we would not be able to facilitate international sales or sell export-controlled products
abroad, respectively, which would adversely affect our business, results of operations and financial condition.


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         We are subject to laws and regulations concerning our international operations, including export restrictions, U.S.
         economic sanctions and the FCPA. If we are not in compliance with applicable legal requirements, we may be subject to
         civil or criminal penalties and other remedial measures, which would adversely affect our business, results of operations
         and financial condition.

             Our international operations are subject to laws and regulations restricting our international operations, including
         activities involving restricted countries, organizations, entities and persons that have been identified as unlawful actors or
         that are subject to U.S. economic sanctions. To the extent that we operate outside the United States, we are subject to the
         FCPA, which prohibits U.S. companies and their intermediaries from bribing foreign officials for the purpose of obtaining or
         keeping business or otherwise obtaining favorable treatment, and other laws concerning our international operations. Any
         violations of these laws and regulations, including any resulting fines, penalties or restrictions on export activities (including
         other U.S. laws and regulations as well as local laws), would adversely affect our reputation and the market for our shares,
         and may require certain of our investors to disclose their investment in our company under certain state laws. If we are not in
         compliance with export restrictions, U.S. economic sanctions or other laws and regulations that apply to our international
         operations, we may be subject to civil or criminal penalties and other remedial measures, which could adversely affect our
         business, results of operations and financial condition.

         Misconduct of our employees, agents and business partners, including security breaches, could result in reputational
         damage, could subject us to fines and penalties and could cause us to lose our ability to contract with the U.S.
         government.

             Misconduct, fraud or other improper activities by our employees, agents or business partners could have a significant
         adverse impact on our business and reputation, particularly because we are a U.S. government contractor. Such misconduct
         could include the failure to comply with U.S. government procurement regulations, regulations regarding the protection of
         classified information, legislation regarding the pricing of labor and other costs in U.S. government contracts, regulations on
         lobbying or similar activities, environmental laws and any other applicable laws or regulations. Misconduct involving data
         security lapses resulting in the compromise of personal information or the improper use of our customers‟ sensitive or
         classified information could result in remediation costs, regulatory sanctions against us and serious harm to our reputation.
         Other examples of potential misconduct include falsifying time records and violations of the Anti-Kickback Act or the
         FCPA. Although we have implemented policies, procedures and controls to prevent and detect these activities, these
         precautions may not prevent all misconduct and as a result, we could face unknown risks or losses. Our failure to comply
         with applicable laws or regulations or misconduct by any of our employees, agents or business partners could result in
         reputational damage, could subject us to fines and penalties, suspension or debarment from contracting with the
         U.S. government and loss of security clearance, any of which would adversely affect our business, results of operations and
         financial condition.

         The loss of one or more members of our senior management team could impair our relationships with U.S. government
         customers and our ability to compete, and could disrupt the management of our business.

             We believe that our success depends on the continued contributions of the members of our senior management team. Our
         senior management team has extensive industry experience, and the relationships and reputation that members of our senior
         management team have established and maintain with U.S. government personnel contribute to our ability to maintain good
         customer relations and to identify new business opportunities. The loss of the services of one or more of our senior
         executives could impair our ability to identify and secure new contracts, to maintain good customer and vendor relations and
         to otherwise manage our business, any of which would adversely affect our business, results of operations and financial
         condition.


         We may face difficulties as we expand our operations into countries in which we have limited operating experience.

            We provide operational equipment and logistics solutions to foreign governments and militaries and to our
         U.S. government customers who are operating abroad. We intend to continue expanding our global


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         footprint, which may involve expanding into countries other than those in which we currently operate. Our business outside
         of the United States is subject to various risks, including:

              •     changes in economic and political conditions in the United States and abroad;

              •     compliance with international and domestic laws and regulations and any changes therein;

              •     wars, civil unrest, acts of terrorism and other conflicts;

              •     natural disasters;

              •     changes in tariffs, trade restrictions, trade agreements and taxations;

              •     difficulties in managing or overseeing foreign operations;

              •     limitations on the repatriation of funds because of foreign exchange controls;

              •     less developed and less predictable legal systems than those in the United States; and

              •     intellectual property laws of countries which do not protect our intellectual property rights to the same extent as the
                    laws of the United States.

             The occurrence or consequences of any of these factors may restrict our ability to operate in the affected region and/or
         decrease the profitability of our operations in that region. As we expand our business in foreign countries, we will become
         exposed to increased risk of loss from foreign currency fluctuations and exchange controls as well as longer accounts
         receivable payment cycles. We have limited control over these risks, and if we do not correctly anticipate changes in
         international economic and political conditions, we may not alter our business practices in time to avoid adverse effects on
         our business, results of operations and financial condition.

         If we are unable to manage our growth, our business could be adversely affected.

             We have grown and expanded significantly in recent years. Our net sales grew at a compound annual growth rate of 61%
         from 2006 to 2010 and have we have significantly expanded our employee base, including increasing the weighted average
         number of personnel in our sales force from 57 to 134 between 2007 and 2010. To date, we have relied primarily upon
         organic growth for this expansion, rather than growth through acquisitions. Our future results will depend upon our ability to
         continue to grow organically or to demonstrate the ability to successfully identify and integrate non-dilutive acquisitions. We
         anticipate that we will continue to expand our workforce, primarily through continued expansion of our sales team, and our
         operations, which will place significant demands on our management, as well as on our administrative, operational, and
         financial resources. If we are unable to expand our operational, financial, and management information systems in a manner
         that supports our growth, or are unable to attract, motivate and manage a skilled workforce, we may not be able to continue
         to satisfy our customer demands. If we expand our business too rapidly in anticipation of increased customer demand that
         does not materialize, or in order to compete for contractual procurement vehicles that we are not awarded, the increase in our
         operating expenses could exceed our revenue growth and as a result decrease our net income. If we are unable to manage our
         growth, our business, results of operations or financial condition could be adversely affected.

         We may no longer be able to participate in the federal government’s small business programs which may affect our
         business and our sales.

             We are currently classified as a small business under certain provisions of the Small Business Administration
         regulations. Under our current employee count we are eligible to compete for government contracts set aside for businesses
         designated under certain North American Industry Classification Systems (“NAICS”) codes as small businesses with fewer
         than 500 employees. To calculate the number of our employees under the Small Business Administration regulations, we
         determine the average number of individuals employed on a full-time and part-time basis (including employees of any
         “affiliates” as defined in accordance with Small Business Administration regulations) based upon the number of employees
         in each pay period for the preceding twelve calendar months. As of December 31, 2010, pursuant to this calculation, we had
         413 employees.
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             Although we believe we currently meet the applicable standard for certain small business contracts, if we or our affiliates
         significantly increase the number of our respective employees, we could lose eligibility for new government contracts and
         other awards that are set aside for small businesses under certain NAICS codes. While we have also successfully competed
         for a number of contractual procurement vehicles that are not set aside for small businesses, our Spec Ops TLS contract,
         which accounted for approximately 44% of our total net sales for the year ended December 31, 2010, was awarded to us
         pursuant to a NAICS code designating a small business as having fewer than 500 employees.

            If we are no longer classified as a small business, or if our status as a small business is successfully challenged, we may
         need to modify our competitive strategy going forward in order maintain our rate of government contracts wins, and if not
         successful, our business, results of operations or financial condition could be adversely affected.

         Our failure to obtain and maintain necessary security clearances may limit our ability to perform classified work for
         government customers, which could cause us to lose business.

             Some government contracts require us to maintain facility security clearances and require some of our employees to
         maintain individual security clearances. A number of our employees maintain a top secret clearance level. Obtaining and
         maintaining security clearances for employees involves a lengthy process, and it is difficult to identify, recruit and retain
         employees who already hold security clearances. If our cleared employees lose or are unable to timely obtain security
         clearances or we lose a facility clearance, our U.S. government customers may terminate the contract or decide not to renew
         it upon its expiration. As a result, to the extent we cannot obtain or maintain the required security clearances for a particular
         contract, or we fail to obtain them on a timely basis, we may not generate the sales anticipated from the contract, which
         could harm our operating results. To the extent we are not able to obtain facility security clearances or engage employees
         with the required security clearances for a particular contract, we will be unable to perform that contract and we may not be
         able to compete for or win new awards for similar work.


         Some of our officers and directors have significant ownership interests in other companies, which could cause conflicts
         of interests that result in our not acting on opportunities on which we would otherwise act.

             Some of our officers and directors have significant ownership interests, individually and collectively, in several
         companies with which we have entered into material transactions. The ownership of our directors and officers in these
         companies could create, or appear to create, conflicts of interest with respect to matters involving both us and those
         companies, which could have different implications for those companies than they do for us. As a result, we may not pursue
         certain opportunities on which we would otherwise act. See “Certain Relationships and Related Party Transactions.”


         Our management team has limited experience managing a public company, and regulatory compliance may divert its
         attention from the day-to-day management of our business.

            The individuals who now constitute our management team have limited experience managing a publicly-traded company
         and limited experience complying with the increasingly complex laws pertaining to public companies. Our management
         team may not successfully or efficiently manage our transition into a public company that will be subject to significant
         regulatory oversight and reporting obligations under federal securities laws. In particular, these new obligations will require
         substantial attention from our senior management and divert their attention away from the day-to-day management of our
         business, which could adversely affect our business, results of operations and financial condition.


         We may not be able to identify suitable acquisition candidates, effectively integrate newly acquired businesses or achieve
         expected profitability from acquisitions.

             We have in the past acquired additional businesses and may in the future choose to supplement our organic growth by
         pursuing strategic acquisitions aimed at augmenting our contractual procurement vehicle portfolio, broadening and
         diversifying our customer base, expanding our product offerings and vendor network or increasing our geographic presence.
         There can be no assurance that suitable candidates for


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         acquisitions can be identified or, if suitable candidates are identified, that acquisitions can be completed on acceptable terms,
         if at all. Even if suitable candidates are identified, any future acquisitions may entail a number of risks that could adversely
         affect our business and the market price of our common stock, including the integration of the acquired operations, diversion
         of management‟s attention, risks of entering markets in which we have limited experience, adverse short-term effects on our
         reported operating results, the potential loss of key employees of acquired businesses and risks associated with unanticipated
         liabilities. There is no assurance that we will be able to achieve any expected benefits from any acquisition.

             We may use common stock to pay for acquisitions. If the owners of potential acquisition candidates are not willing to
         receive common stock in exchange for their businesses, our acquisition prospects could be limited. Future acquisitions could
         also result in accounting charges, potentially dilutive issuances of equity securities and increased debt and contingent
         liabilities, including liabilities related to unknown or undisclosed circumstances, any of which could materially adversely
         affect our business, results of operations and financial condition.


         Internal system or service failures could disrupt our business and impair our ability to effectively provide the products
         and related services we offer to our customers, which could damage our reputation and adversely affect our business,
         results of operations and financial condition.

             Any system or service disruptions, including those caused by projects to improve our information technology systems, in
         particular our Oracle system, if not anticipated and appropriately mitigated, would have an adverse effect on our business
         including, among other things, an adverse effect on our ability to bill our customers for work performed on our contracts,
         collect the amounts that have been billed, confirm orders within 24 hours as required by many of our government contracts,
         and produce accurate financial statements in a timely manner.

             We could also be subject to systems failures, including network, software or hardware failures, whether caused by us,
         third-party service providers, intruders or hackers, computer viruses, natural disasters, power shortages or terrorist attacks.
         We do not currently have redundant application servers or clustered databases for our Oracle system or our other information
         technology systems. Any such failures could cause loss of data and interruptions or delays in our business, cause us to incur
         remediation costs, subject us to claims and damage our reputation. In addition, the failure or disruption of our
         communications or utilities could cause us to interrupt or suspend our operations or otherwise adversely affect our business.
         Our property and business interruption insurance may be inadequate to compensate us for all losses that may occur as a
         result of any system or operational failure or disruption which would adversely affect our business, results of operations and
         financial condition.


         Because we are a holding company with no operations of our own, we are financially dependent on receiving
         distributions from our subsidiaries and we could be harmed if such distributions could not be made in the future.

             We are a holding company and all of our operations are conducted through subsidiaries. Consequently, we rely on
         dividends or advances from our subsidiaries (including ones that are wholly owned). We do not currently expect to declare
         or pay dividends on our common stock for the foreseeable future; however, to the extent that we determine in the future to
         pay dividends on our common stock, none of our subsidiaries will be obligated to make funds available to us for the payment
         of dividends. The ability of such subsidiaries to pay dividends and our ability to receive distributions on our investments in
         other entities is subject to applicable local law. Such laws and restrictions could limit the payment of dividends and
         distributions to us, which would restrict our ability to continue operations. In addition, Delaware law may impose
         requirements that may restrict our ability to pay dividends to holders of our common stock.

         Our substantial indebtedness could adversely affect our financial flexibility and our competitive position.

             We have a significant amount of indebtedness. As of December 31, 2010, after giving effect to the refinancing
         transactions, our total long-term debt would have been $288.7 million, representing the senior secured notes and other
         long-term debt, and $93.2 million in borrowings outstanding under our senior


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         secured revolving credit facility and we would have had commitments under the senior secured revolving credit facility
         available to us of $106.8 million, subject to borrowing base limitations.

             Subject to the limitations contained in the senior secured revolving credit facility and the indenture governing the senior
         secured notes, which we refer to as the “senior secured notes indenture,” we may be able to incur substantial additional debt
         from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we
         do so, the risks related to our high level of debt could intensify. Specifically, our high level of debt could have important
         consequences to the you and significant effects on our business, including:

              •     making it more difficult for us to satisfy our obligations with respect to our debt;

              •     impairing our ability to obtain additional financing for working capital, capital expenditures, product development,
                    debt service requirements, restructuring, acquisitions or general corporate purposes, which could be exacerbated by
                    further volatility in the credit markets;

              •     requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes,
                    thereby reducing the amount of cash flows available for working capital, capital expenditures, product development,
                    restructuring, acquisitions and other general corporate purposes;

              •     increasing our vulnerability to general adverse economic and industry conditions;

              •     exposing us to the risk of increased interest rates as borrowings under the senior secured revolving credit facility will
                    be, and other indebtedness that we incur in the future may be, at variable rates of interest;

              •     limiting our flexibility in planning for and reacting to changes in our business and the industry in which we compete;

              •     placing us at a disadvantage compared to other, less leveraged competitors; and

              •     increasing our cost of borrowing.

             In addition, the senior secured notes indenture and the senior secured revolving credit facility contain restrictive
         covenants that will limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply
         with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all
         our debt.

         We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions
         to satisfy our obligations under our indebtedness, which may not be successful.

            Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and
         operating performance, which are subject to prevailing economic and competitive conditions and to certain financial,
         business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows
         from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

             If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial
         liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material
         assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able
         to effect any such alternative measures on commercially reasonable terms to us or at all and, even if successful, those
         alternative actions may not allow us to meet our scheduled debt service obligations. The senior secured revolving credit
         facility and the senior secured notes indenture restrict our ability to dispose of assets and use the proceeds from those
         dispositions and also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes
         due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt
         service obligations then due.


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            Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on
         commercially reasonable terms to us or at all, would materially and adversely affect our financial position and results of
         operations.

             If we cannot make scheduled payments on our debt, we will be in default and holders of the senior secured notes could
         declare all outstanding principal and interest to be due and payable, the lenders under the senior secured revolving credit
         facility could terminate their commitments to loan money and could foreclose against the assets securing their borrowings
         and we could be forced into bankruptcy or liquidation. All of these events could result in your losing your investment in our
         common stock.


         Risks Related to Our Common Stock

         There is no existing market for our common stock, and we do not know if one will develop to provide you with adequate
         liquidity.

             Prior to this offering, there has not been a public market for our common stock. We cannot predict the extent to which
         investor interest in our company will lead to the development of an active trading market on the New York Stock Exchange
         or otherwise or how liquid that market might become. If an active trading market does not develop, you may have difficulty
         selling any of our common stock that you buy. The initial public offering price for the common stock will be determined by
         negotiations between us and the representatives of the underwriters and may not be indicative of prices that will prevail in
         the open market following this offering. Consequently, you may not be able to sell our common stock at prices equal to or
         greater than the price you paid in this offering.


         The price of our common stock may fluctuate significantly, and you could lose all or part of your investment.

             Volatility in the market price of our common stock may prevent you from being able to sell your common stock at or
         above the price you paid for your common stock. The market price of our common stock could fluctuate significantly for
         various reasons, including:

              •     our operating and financial performance and prospects;

              •     the overall performance of the equity markets;

              •     the number of shares of our common stock publicly owned and available for trading;

              •     our quarterly or annual earnings or those of other companies in our industry;

              •     conditions or trends in our industry;

              •     the public‟s reaction to our press releases, our other public announcements and our filings with the Securities and
                    Exchange Commission, or “SEC”;

              •     changes in earnings estimates or recommendations by research analysts who track our common stock or the stock of
                    other companies in our industry;

              •     strategic actions by us or our competitors, such as acquisitions or restructurings;

              •     new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

              •     changes in accounting standards, policies, guidance, interpretations or principles;

              •     threatened or actual litigation;

              •     any major change in our board of directors or management;
•   changes in general conditions in the United States and global economies or financial markets, including those
    resulting from war, incidents of terrorism or responses to such events; and

•   sales of common stock by us or members of our management team.


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              In addition, in recent years, the stock market has experienced significant price and volume fluctuations. This volatility
         has had a significant impact on the market price of securities issued by many companies across many industries. The
         changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price
         of our common stock could fluctuate based upon factors that have little or nothing to do with our company, and these
         fluctuations could materially reduce our share price. Securities class action litigation has often been instituted against
         companies following periods of volatility in the overall market and in the market price of a company‟s securities. This
         litigation, if instituted against us, could result in very substantial costs, divert our management‟s attention and resources and
         harm our business, operating results and financial condition.


         Provisions in our charter documents and Delaware law may make it difficult for a third party to acquire us and could
         depress the price of our common stock.

            Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of
         control or changes in our management. Among other things, our certificate of incorporation and bylaws:

              •     authorize our board of directors to issue, without stockholder approval, preferred stock with such terms as the board
                    of directors may determine;

              •     divide our board of directors into three classes so that only approximately one-third of the total number of directors
                    is elected each year;

              •     vest the sole power of a majority of our board of directors to fix the number of directors;

              •     permit directors to be removed only for cause by a majority vote of our stockholders;

              •     prohibit action by written consent of our stockholders or to call special meetings;

              •     give the sole power of our board of directors to fill any vacancy on our board whether such vacancy occurred as a
                    result of an increase in the number of directors or otherwise; and

              •     specify advance notice requirements for stockholder proposals and director nominations.

             In addition, following this offering, we will be subject to the provisions of Section 203 of the Delaware General
         Corporation Law, regulating corporate takeovers and which has an anti-takeover effect with respect to transactions not
         approved in advance by our board of directors, including discouraging takeover attempts that might result in a premium over
         the market price for shares of our common stock. In general, those provisions prohibit a Delaware corporation from
         engaging in any business combination with any interested stockholder for a period of three years following the date that the
         stockholder became an interested stockholder, unless:

              •     the transaction is approved by the board of directors before the date the interested stockholder attained that status;

              •     upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the
                    interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the
                    transaction commenced; or

              •     on or after such date, the business combination is approved by the board of directors and authorized at a meeting of
                    stockholders, and not by written consent, by at least two-thirds of the outstanding voting stock that is not owned by
                    the interested stockholder.

             In general, Section 203 defines a business combination to include the following:

              •     any merger or consolidation involving the corporation and the interested stockholder;

              •     any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested
                    stockholder;
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              •     subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock
                    of the corporation to the interested stockholder;

              •     any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any
                    class or series of the corporation beneficially owned by the interested stockholder; or

              •     the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial
                    benefits provided by or through the corporation.

             In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the
         outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by any such
         entity or person.

             A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or
         by amendment to its certificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of,
         and do not currently intend to opt out of, this provision.


         We have no plans to pay dividends on our common stock after this offering, so you may not receive funds without selling
         your common stock.

             We have no plans to pay dividends on our common stock after this offering. We generally intend to invest our future
         earnings, if any, to fund our growth. Any payment of future dividends will be at the discretion of our board of directors and
         will depend on, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory
         and contractual restrictions applying to the payment of dividends, and other considerations that our board of directors deems
         relevant. The agreements governing our outstanding indebtedness also include limitations on our payment of dividends.
         Accordingly, you may have to sell some or all of your common stock in order to generate cash flow from your investment.
         You may not receive a gain on your investment when you sell your common stock and you may lose the entire amount of the
         investment.


         You will suffer immediate and substantial dilution.

             The initial public offering price per share of our common stock is substantially higher than our as adjusted net tangible
         book value per common share immediately after the offering. As a result, you will pay a price per share that substantially
         exceeds the book value of our assets after subtracting our liabilities. At the offering price of $  per share, the mid-point of
         the range set forth on the cover of this prospectus, you will incur immediate and substantial dilution in the amount of
         $     per share.


         The requirements of being a public company will increase our costs and may strain our resources and distract
         management.

             We will face increased legal, accounting, administrative and other costs and expenses as a public company that we do not
         incur as a private company. After the consummation of this offering, we will be subject to the following: the reporting
         requirements of the Securities Exchange Act of 1934, which requires that we file annual, quarterly and current reports with
         respect to our business and financial condition, the rules and regulations implemented by the SEC, the Sarbanes-Oxley Act
         of 2002, the Public Company Accounting Oversight Board and the New York Stock Exchange, each of which imposes
         additional reporting and other obligations on public companies. We expect that compliance with these public company
         requirements will increase our legal and compliance costs and make some activities more time-consuming. We may need to
         hire a number of additional employees with public accounting and disclosure experience in order to meet our ongoing
         obligations as a public company. A number of those requirements will require us to carry out activities we have not done
         previously. For example, we will create new board committees and adopt new internal controls and disclosure controls and
         procedures. In addition, we will incur additional expenses associated with our SEC reporting requirements. For example,
         under Section 404 of the Sarbanes-Oxley Act of 2002, for our annual report on Form 10-K for our fiscal year ending
         December 31, 2012, we will need to document and test our internal control procedures, our management will need to assess
         and report on the


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         effectiveness of our internal control over financial reporting and our independent accountants will need to issue an opinion
         on the effectiveness of our internal control over financial reporting. Furthermore, if we identify any issues in complying with
         those requirements (for example, if we or our accountants identify a material weakness or significant deficiency in our
         internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those
         issues would adversely affect us, our reputation or investor perceptions of us.

             We also expect that it will be difficult and expensive to obtain director and officer liability insurance, and we may be
         required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar
         coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors
         or as executive officers. Advocacy efforts by stockholders and third parties may also prompt even more changes in
         governance and reporting requirements. We expect that the additional reporting and other obligations imposed on us by these
         rules and regulations will increase our legal and financial compliance costs substantially. These increased costs will require
         us to divert a significant amount of money that we could otherwise use to expand our business and achieve our strategic
         objectives.

             In order to maintain and improve the effectiveness of our internal control over financial reporting and disclosure controls
         and procedures, significant resources and management oversight will be required. This may divert management‟s attention
         from other business concerns, which could materially adversely affect our business, financial condition and results of
         operations. If we are unable to conclude that our internal control over financial reporting and disclosure controls and
         procedures are effective, or if our independent public accounting firm is unable to provide us with an unqualified report as to
         the effectiveness of our internal control over financial reporting in future years, investors may lose confidence in our
         financial reports and our stock price may decline.


         In the past, we have identified significant deficiencies in our internal control over financial reporting.

             In the course of the preparation and external audit of our consolidated financial statements for the years ended
         December 31, 2007, 2008 and 2009, we and our independent registered public accounting firm identified “significant
         deficiencies” in our internal control over financial reporting, as defined in the standards established by the Public Company
         Accounting Oversight Board. A significant deficiency is a deficiency, or combination of deficiencies, in internal control over
         financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible
         for oversight of a company‟s financial reporting.

             The significant deficiencies indentified were related to: (a) the improper timing of revenue recognition in respect of
         certain product shipments where title did not pass to the customer until delivery, (b) the allocation of purchase price, in
         particular the proper recording of intangible assets, in connection with an acquisition and (c) our controls for indentifying
         and accounting for related party transactions, including the failure to consolidate certain of our affiliates as variable interest
         entities.

             Following the identification of these control deficiencies, we have taken actions and measures to improve our internal
         control over financial reporting. Our remediation efforts may not, however, enable us to avoid material weaknesses or other
         significant deficiencies in the future.

         Future sales of shares of our common stock by existing stockholders could depress the price of our common stock.

             If our existing stockholders sell, or indicate an intent to sell, substantial amounts of our common stock in the public
         market after the 180-day contractual lock-up and other legal restrictions on resale discussed in this prospectus lapse, the
         trading price of our common stock could decline significantly and could decline below the initial public offering price.
         Based on shares outstanding as of December 31, 2010, upon completion of this offering, we will have outstanding
         approximately          shares of common stock, assuming no exercise of the underwriters‟ over-allotment option. Of these
         shares, only shares of common stock sold in this offering by the selling stockholders will be immediately freely tradable,
         without restriction, in the public market.


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             After the lock-up agreements pertaining to this offering expire and based on shares outstanding as of December 31, 2010,
         an additional          shares will be eligible for sale in the public market, of which are held by directors, executive officers
         and other affiliates and will be subject to volume limitations under Rule 144 under the Securities Act of 1933, or the
         “Securities Act.” In addition,      shares reserved for future issuance under our 2011 Incentive Award Plan become eligible
         for sale in the public market in the future, subject to certain legal and contractual limitations. If these additional shares are
         sold, or if it is perceived that they will be sold, in the public market, the price of our common stock could decline
         substantially.


         We are a “controlled company” within the meaning of the New York Stock Exchange rules and, as a result, will qualify
         for, and intend to rely on, exemptions from certain corporate governance requirements.

             Upon the consummation of this offering, certain of our directors and executive officers will continue to beneficially own
         a majority of our outstanding common stock. As a result, we are a “controlled company” within the meaning of the New
         York Stock Exchange corporate governance standards. Under the New York Stock Exchange rules, a company of which
         more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may
         elect not to comply with certain New York Stock Exchange corporate governance requirements, including:

              •     the requirement that a majority of the board of directors consist of independent directors;

              •     the requirement that we have a nominating/corporate governance committee that is composed entirely of
                    independent directors with a written charter addressing the committee‟s purpose and responsibilities;

              •     the requirement that we have a compensation committee that is composed entirely of independent directors with a
                    written charter addressing the committee‟s purpose and responsibilities; and

              •     the requirement for an annual performance evaluation of the nominating/corporate governance and compensation
                    committees.

             Following this offering, we intend to utilize each of these exemptions. As a result, we will not have a majority of
         independent directors and our nominating/corporate governance and compensation committees will not consist entirely of
         independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are
         subject to all of the New York Stock Exchange corporate governance requirements.


         Upon completion of this offering, the selling stockholders will continue to have significant influence over all matters
         submitted to a stockholder vote, which will limit your ability to influence corporate activities and may adversely affect the
         market price of our common stock.

             Upon completion of this offering, the selling stockholders will own approximately % of our common stock, or
         approximately % if the underwriters‟ option to purchase additional shares is exercised in full. As a result of this
         ownership, the selling stockholders will continue to have substantial influence over the outcome of votes on all matters
         requiring approval by our stockholders, including the election of directors, the adoption of amendments to our certificate of
         incorporation and bylaws and approval of significant corporate transactions. The selling stockholders can also take actions
         that have the effect of delaying or preventing a change in control of us or discouraging others from making tender offers for
         our shares, which could prevent stockholders from receiving a premium for their shares. These actions may be taken even if
         other stockholders oppose them. Moreover, this concentration of stock ownership may make it difficult for stockholders to
         replace management. In addition, this significant concentration of stock ownership may adversely affect the trading price for
         our common stock because investors often perceive disadvantages in owning stock in companies with controlling
         stockholders. This concentration of control could be disadvantageous to other stockholders with interests different from
         those of our officers, directors and principal stockholders and the trading price of shares of our common stock could be
         adversely affected. See “Principal and Selling Stockholders” for a more detailed description of our stock ownership.


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         If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our
         business, our stock price and trading volume could decline.

             The trading market for our common stock will depend in part on the research and reports that securities or industry
         analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research
         on our company. If no securities or industry analysts commence coverage of our company, the trading price for our stock
         would be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts
         who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would
         likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly,
         demand for our stock could decrease, which might cause our stock price and trading volume to decline.


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                                                      FORWARD-LOOKING STATEMENTS

             This prospectus, including the sections entitled “Prospectus Summary,” “Risk Factors,” “Management‟s Discussion and
         Analysis of Financial Condition and Results of Operations,” “Business” and “Compensation Discussion and Analysis,”
         contains forward-looking statements. These statements relate to future events or our future financial performance, and
         involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity,
         performance or achievements to be materially different from any future results, levels of activity, performance or
         achievements expressed or implied by these forward-looking statements. These risks and other factors include, among other
         things, those listed in “Risk Factors,” “Management‟s Discussion and Analysis of Financial Condition and Results of
         Operations” and elsewhere in this prospectus. In some cases, you can identify forward-looking statements by terminology
         such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,”
         “continue,” “assumption” or the negative of these terms or other comparable terminology. These statements are only
         predictions. Actual events or results may differ materially. All forward-looking statements are subject to risks and
         uncertainties that may cause actual results to differ materially from those that we expected, including:

              •     deterioration in our relationships with our customers or an inability to develop relationships with new customers;

              •     the loss of our contractual procurement vehicles or a failure to obtain new contractual procurement vehicles;

              •     changes in spending policies or budget priorities of the U.S. government and the Department of Defense;

              •     our government contracts, which give our government customers a variety of rights that are unfavorable to us;

              •     the deterioration of our vendor relationships or an inability to develop relationships with substitute vendors;

              •     our reliance on our vendors;

              •     costs associated with the competitive procurement process;

              •     the impact of competing for post-award contract orders;

              •     the failure to comply with extensive procurement rules and regulations;

              •     our growth strategy, which requires us to attract and retain skilled personnel and to identify suitable acquisitions;

              •     the unfavorable resolution of reviews, audits and price adjustments by the U.S. government;

              •     the failure to receive renewal or follow-on contracts;

              •     the risks associated with sales to certain foreign customers;

              •     the failure to comply with the export-control laws and regulations applicable to our business;

              •     the failure to comply with the laws that regulate our international operations, including the FCPA;

              •     employee misconduct;

              •     the loss of any member of our senior management team;

              •     the difficulties of international expansion;

              •     the inability for us to manage our growth;

              •     future ineligibility to participate in the federal government‟s small business programs;

              •     the failure to obtain and maintain security clearances;
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              •     possible conflicts of interest presented by some of our officers‟ and directors‟ ownership interests in other
                    companies;

              •     our management team‟s limited experience in managing a public company;

              •     the risks associated with our acquisition strategy;

              •     an internal system or services failure;

              •     the financial dependence on receiving distributions due to our status as a holding company; and

              •     the risks associated with our substantial indebtedness.

             Although we believe that the expectations reflected in the forward-looking statements contained in this prospectus are
         reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These forward-looking
         statements are made as of the date of this prospectus and, except as required under the federal securities laws and the rules
         and regulations of the SEC, we assume no obligation to update or revise them or to provide reasons why actual results may
         differ.

             We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into
         account events or circumstances that occur after the date of this prospectus. Additionally, we do not undertake any
         responsibility to update you on the occurrence of any unanticipated events which may cause actual results to differ from
         those expressed or implied by the forward-looking statements contained in this prospectus.


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                                                             USE OF PROCEEDS

             We estimate that the net proceeds to us from this offering, after deducting underwriting discounts and estimated offering
         expenses, will be approximately $      million, or approximately $     million if the underwriters exercise in full their
         over-allotment option, based upon an assumed initial public offering price of $       per share, the midpoint of the price range
         set forth on the cover of this prospectus.

             We intend to use the net proceeds from this offering first to make a final distribution of $     million to our existing
         stockholders in connection with the termination of our S corporation status and second to exercise our option to redeem up to
         35% of our senior secured notes at a redemption price of 111% of the principal amount thereof, plus accrued and unpaid
         interest, if any, to the redemption date. We will use the remainder of the net proceeds, if any, to repay a portion of the
         amounts outstanding under our senior secured revolving credit facility. As of March 31, 2011, there was approximately
         $66.0 million outstanding under our senior secured revolving credit facility, which bears interest at a variable rate. In 2010,
         the weighted-average interest rate paid under our senior secured revolving credit facility was 4%. The principal amount
         outstanding of the loans under our senior secured revolving credit facility is due and payable in full on March 25, 2016. See
         “Dividend Policy” and “Description of Certain Indebtedness.”

             We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders.

             A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) the
         net proceeds to us from this offering by $   million, assuming the number of shares offered by us, as set forth on the cover
         page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and
         estimated offering expenses payable by us and the selling stockholders.


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                                                             DIVIDEND POLICY

             Historically, due to our status as a subchapter S corporation, we have distributed annually to our stockholders a
         substantial portion of our prior year‟s taxable income. During fiscal years 2009 and 2010, we declared distributions of
         $31.6 million and $129.0 million, respectively. Distributions to our stockholders in 2010 include a special distribution of
         $50.0 million in February 2010 using funds drawn from our senior secured revolving credit facility and a special distribution
         of $48.6 million on October 22, 2010 using the proceeds of our former term loan facility. The remainder of the distributions
         in 2010 were paid to our stockholders to fund their tax obligations related to their ownership of ADS Tactical, Inc. On
         January 12, 2011, we made a distribution of $10.6 million for estimated taxes for the fourth quarter of 2010. We expect to
         make additional distributions related to taxable income each quarter until the consummation of this offering. On March 25,
         2011, we made a distribution of $217.1 million to our stockholders with proceeds from the sale of the senior secured notes.
         In connection with this offering, we will convert from a subchapter S corporation to a subchapter C corporation, and we do
         not anticipate paying any additional cash dividends on our common stock in the foreseeable future.

             Our future dividend policy is within the discretion of our board of directors and will depend upon various factors,
         including our results of operations, financial conditions, covenants contained in our senior secured revolving credit facility
         and the senior secured notes indenture, capital requirements, future prospects, investment opportunities and other factors
         deemed relevant by our board of directors.


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                                                              CAPITALIZATION

             The following table sets forth our cash and cash equivalents and consolidated capitalization as of December 31, 2010 on
         an actual as adjusted basis to give effect to the refinancing transactions described under “Prospectus Summary — Recent
         Developments” and on a pro forma basis giving effect to the refinancing transactions described under “Prospectus
         Summary — Recent Developments” and to this offering. Pro forma data assumes that the net proceeds to us from this
         offering, after deducting underwriting discounts and estimated offering expenses, will be approximately $         (assuming no
         exercise by the underwriters of their over-allotment option), assuming the common stock is offered at $        per share, the
         midpoint of the range set forth on the cover page of this prospectus. Pro forma data gives effect to the refinancing
         transactions and to the use of proceeds from this offering (1) to make a final distribution of $   million to our existing
         stockholders in connection with the termination of our S corporation status, (2) to exercise our option to redeem up to 35%
         of our senior secured notes and (3) to the extent any proceeds remain, to repay a portion of the amounts outstanding under
         our senior secured revolving credit facility. See “Use of Proceeds.”

            You should read this table in conjunction with “Use of Proceeds,” “Selected Consolidated Financial and Other Data,”
         “Management‟s Discussion and Analysis of Financial Condition and Results of Operations,” “Description of Certain
         Indebtedness” and our consolidated financial statements and the related notes included elsewhere in this prospectus.


                                                                                                                     As of
                                                                                                              December 31, 2010
                                                                                                          Actual As
                                                                                                          Adjusted             Pro Forma
                                                                                                                (in thousands)


         Cash and cash equivalents                                                                    $          2,810

         Line of credit (1)                                                                                    93,155
         11% senior secured notes due 2018                                                                    275,000
         Other long term debt, including current portion                                                       13,670

         Total debt (2)                                                                                       381,825
         Stockholders‟ equity (deficit):
         Common stock (no par value; actual, 300,000 shares authorized, 148,140 shares issued
           and outstanding; as adjusted for the -for-1 stock split,     shares
           authorized,       shares issued and outstanding)
         Additional paid-in capital                                                                                63
         Noncontrolling interests                                                                               3,956
         Retained earnings (accumulated deficit) (3)                                                         (214,071 )
         Total stockholders‟ equity (deficit) (3)                                                            (210,052 )
         Total capitalization (2)(3)                                                                  $       171,773




           (1) Line of credit consists of our senior secured revolving credit facility, including amounts drawn at the closing of the
               issuance of our senior secured notes to pay certain fees and expenses in connection with the amendment and
               restatement of the senior secured revolving credit facility. See “Management‟s Discussion and Analysis of Financial
               Condition and Results of Operations — Liquidity and Capital Resources — Senior Secured Revolving Credit
               Facility.”

           (2) On October 22, 2010, we entered into a $50.0 million term loan facility. At December 31, 2010, $45.0 million was
               outstanding under the term loan facility, which we fully repaid with a portion of the proceeds from the offering of our
               senior secured notes. See “Prospectus Summary — Recent Developments.”

           (3) Actual as adjusted retained earnings (accumulated deficit) and stockholders‟ equity (deficit) give effect to the
               distribution of $217.1 million to our stockholders and the payment of approximately $6.6 million for the
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              transaction bonuses that we made with the proceeds from the sale of the senior secured notes as if each had occurred as
              of December 31, 2010 and also gives effect to the write-off of approximately $1.7 million of unamortized deferred
              financing costs outstanding at December 31, 2010 relating to the amendment and restatement of our senior secured
              revolving credit facility and the repayment of our term loan facility. See “Prospectus Summary — Recent
              Developments” and “Use of Proceeds.” Actual as adjusted retained earnings (accumulated deficit) and stockholders‟
              equity (deficit) do not include distributions to our stockholders of $10.6 million made in January 2011 principally
              related to estimated taxes for the fourth quarter of 2010.


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                                                                    DILUTION

              If you buy our common stock in this offering, your interest will be diluted to the extent of the difference between the
         initial public offering price per share and the net tangible book value per share after this offering.

             As of December 31, 2010, our net tangible book value was approximately $               million, or $         per share after
         giving effect to the refinancing transactions and our      -for 1 stock split to be effected prior to the completion of this
         offering. Net tangible book value per share represents total tangible assets less total liabilities, divided by the number of
         shares of common stock outstanding as of December 31, 2010. After giving effect to the issuance and sale of                shares of
         common stock in this offering at an assumed initial public offering price of $           per share, the midpoint of the offering
         range on the cover page of this prospectus and deducting the underwriting discounts and estimated offering expenses that we
         will pay and the application of the proceeds from this offering as described under “Use of Proceeds,” our net tangible book
         value as of December 31, 2010, would have been approximately $          million, or $      per share. This represents an
         immediate increase in net tangible book value of $      per share to existing stockholders and an immediate dilution of
         $     per share to new investors purchasing common stock in this offering. The following table illustrates this dilution on a
         per share basis:


         Assumed initial public offering price per share                                                                            $
           Net tangible book value per share as of December 31, 2010 (after giving effect to the refinancing
              transactions)
           Increase in net tangible book value per share attributable to this offering
         Net tangible book value per share after this offering
         Dilution per share to new investors                                                                                        $


             A $1.00 increase (decrease) in the assumed initial public offering price of $      per share would increase (decrease) our
         net tangible book value by $      million, the net tangible book value per share after this offering by $   per share and the
         dilution to new investors in this offering by $      per share, assuming the common stock is offered at $ , the midpoint of
         the range set forth on the cover page of this prospectus and assuming the number of shares offered by us and the selling
         stockholders, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated
         underwriting discounts and commissions and estimated offering expenses payable by us and the selling stockholders.

             The following table sets forth, as of December 31, 2010, the total number of shares of common stock owned by existing
         stockholders and to be owned by new investors, and the total consideration paid, and the average price per share paid by our
         existing stockholders and to be paid by new investors purchasing shares of common stock in this offering, before deducting
         the underwriting discounts and estimated offering expenses that we will pay:


                                                                                                                                         Average
                                                                   Shares Purchased                  Total Consideration                  Price
                                                                 Number          Percent            Amount            Percent           Per Share
                                                                                 (dollars in millions, except share data)


         Existing stockholders                                                             %     $                              %   $
         New investors
            Total                                                                    100.0 %     $                  $ 100.0 %       $


             The tables and calculations above assume no exercise of:

              •     all option grants expected to occur concurrently with the consummation of this offering and all shares reserved for
                    future issuance pursuant to our 2011 Equity Incentive Award Plan; or

              •     the underwriters‟ over-allotment option.

             To the extent any of these options are exercised, there will be further dilution to new investors.
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                                    SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

             The following tables set forth selected historical financial and other data, as well as certain pro forma information that
         gives effect to our conversion from a subchapter S corporation to a subchapter C corporation for tax purposes, as if it had
         occurred on January 1 of each period.

             You should read the following selected historical consolidated financial and other data below in conjunction with
         “Management‟s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial
         statements and the related notes included elsewhere in this prospectus. The selected consolidated financial data in this
         section are not intended to replace the consolidated financial statements and are qualified in their entirety by the consolidated
         financial statements and the related notes included elsewhere in this prospectus.

             The consolidated statements of operations data for the years ended December 31, 2008, 2009 and 2010 and the
         consolidated balance sheet data as of December 31, 2009 and 2010 have been derived from our audited consolidated
         financial statements included in this prospectus. The consolidated statements of operations data for the years ended
         December 31, 2006 and 2007 and the consolidated balance sheet data as of December 31, 2006, 2007 and 2008 have been
         derived from consolidated financial statements that are not included in this prospectus. The following information does not
         give pro forma effect to the refinancing transactions. See “Prospectus Summary — Recent Developments.”


                                                            Selected Financial Data

                                                                                    Year Ended December 31,
                                                          2006              2007               2008               2009           2010
                                                                              (in thousands, except per share data)


         Consolidated Statements of
            Operations Data:
         Net sales                                    $ 197,611        $ 440,395          $ 660,535          $ 932,177       $   1,330,840
         Costs and Expenses:
            Cost of goods sold                            172,020           386,588           572,992            809,117         1,166,391
            Selling, general and administrative            18,268            31,405            44,323             60,897            80,945
            Intangible asset impairment                        —                 —                 —               2,996                —
         Income from operations                             7,323            22,402            43,220             59,167            83,504
         Interest income                                      127               241               225                 84               127
         Interest expense (1)                                (566 )          (1,825 )          (1,481 )           (1,401 )          (5,388 )
         Net income                                         6,884               20,818         41,964             57,850            78,243
         Net income attributable to common
           stockholders                               $     6,884      $        20,818    $    42,010        $    57,709            77,282

         Pro Forma Data (unaudited):
         Pro forma provision for income taxes (2)     $     2,719      $         8,223    $    16,594        $    22,795     $      30,913
         Pro forma net income (1)(3)                        4,165               12,595         25,416             34,914            46,369
         Pro forma earnings per common share
           (3) :
           Basic
           Diluted
         Weighted average common shares
           outstanding:
           Basic
           Diluted



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                                                                                     Year Ended December 31,
                                                               2006           2007              2008               2009            2010
                                                                                          (in thousands)


         Other Data:
         Net cash provided by (used in) operating
           activities                                      $ (7,049 )     $ 11,617          $    15,893        $    35,291     $    31,742
         Net cash used in investing activities               (1,384 )       (1,662 )            (14,888 )           (6,586 )        (2,947 )
         Net cash provided by (used in) financing
           activities                                           6,322         (9,764 )              492            (29,547 )       (27,340 )
         Depreciation and amortization                            645            961              2,049              2,140             974
         Capital expenditures                                   1,415            929              8,297              9,181           3,387
         EBITDA (4)                                             7,968         23,363             45,269             61,307          84,478

                                                                                         As of December 31,
                                                               2006           2007               2008              2009            2010
                                                                                           (in thousands)


         Consolidated Balance Sheet Data:
         Cash and cash equivalents                         $      508     $      699        $     2,197        $     1,355     $     2,810
         Working capital                                       19,175         29,031             37,210             59,883          30,647
         Total debt                                            23,434         17,042             41,969             44,665         148,825
         Total stockholders‟ equity                             4,705         18,276             38,186             65,455          15,387


           (1) Reflects historical interest expense. Annual interest expense is expected to increase from historical interest expense by
               approximately $30 million as a result of the refinancing transactions. After further giving effect to the use of proceeds
               from this offering, assuming our common stock is offered at $        per share, the midpoint of the range set forth on the
               cover page of this prospectus, annual interest expense is expected to increase from historical interest expense by
               approximately $        million, assuming redemption of up to 35% of our senior secured notes, the maximum amount
               permitted to be redeemed under the senior secured notes indenture and $         million to repay a portion of the amounts
               remaining outstanding under our senior secured revolving credit facility. See “Prospectus Summary — Recent
               Developments” and “Management‟s Discussion and Analysis — Liquidity and Capital Resources.”

           (2) We historically have been treated as a subchapter S corporation for U.S. federal income tax purposes. As a result, our
               income has not been subject to U.S. federal income taxes or state income taxes in those states where S corporation
               status is recognized. In general, the corporate income or loss of a subchapter S corporation is allocated to its
               stockholders for inclusion in their personal federal income tax returns and state income tax returns in those states
               where S corporation status is recognized. In connection with this offering, we will convert from a subchapter S
               corporation to a subchapter C corporation. Pro forma provision for income taxes reflects combined federal and state
               income taxes on a pro forma basis, as if we had been taxed as a subchapter C corporation, using an effective tax rate of
               39.5% for 2008 and 2009 and an effective tax rate of 40.0% for 2010.

           (3) Reflects historical income before income taxes less the pro forma provision for income taxes. Does not give pro forma
               effect to the refinancing transactions or the use of proceeds and additional common shares resulting from this offering.

           (4) We define EBITDA as net income before interest expense, provision for income taxes and depreciation and
               amortization. EBITDA is not a measure of financial performance under U.S. GAAP and should not be considered as
               an alternative to net income as a measure of performance. Because EBITDA is not a measurement determined in
               accordance with U.S. GAAP and is susceptible to varying calculations, EBITDA, as presented, may not be comparable
               to other similarly titled measures presented by other companies. We believe that EBITDA is a useful financial metric
               to assess our operating performance from period to period by excluding certain items that we believe are not
               representative of our core business, as well for providing a comparison of our operating performance to that of other
               companies in our industry.

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             We use EBITDA in a number of ways, including:

              •     for planning and budgeting purposes;

              •     to evaluate the effectiveness of our business strategies;

              •     in communications with our board of directors concerning our consolidated financial performance; and

              •     to determine management‟s compensation.

             The following table reconciles net income, the most directly comparable GAAP financial measure, to EBITDA:


                                                                                                       Year Ended December 31,
                                                                                                2008              2009             2010
                                                                                                            (in thousands)


         Net income                                                                          $ 41,964         $ 57,850           $ 78,243
         Interest expense, net (a)                                                              1,256            1,317              5,261
         Depreciation and amortization                                                          2,049            2,140                974
         EBITDA (b)                                                                          $ 45,269         $ 61,307           $ 84,478




           (a) Interest expense, net for the year ended December 31, 2010 includes amortization of deferred financing costs of
               $537,143

           (b) For the year ended December 31, 2009, EBITDA was negatively impacted by a write off of approximately
               $3.0 million related to our acquisition of MAR-VEL International, Inc. See “Management‟s Discussion and Analysis
               of Financial Condition and Results of Operations—Acquisition of MAR-VEL International, Inc.” In addition, for the
               year ended December 31, 2010, EBITDA was negatively impacted by costs consisting principally of legal, accounting
               and other professional fees incurred in connection with this offering and the pursuit of other strategic opportunities and
               financings.

             EBITDA has limitations as an analytical tool and you should not consider it in isolation, or as a substitute for analysis of
         our results as reported under GAAP. See “Non-GAAP Financial Measures.”


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                          MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                                          AND RESULTS OF OPERATIONS

             You should read the following discussion of our financial condition and results of operations in conjunction with our
         consolidated financial statements and the notes thereto included elsewhere in this prospectus. The following discussion
         contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially
         from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include
         those discussed below and elsewhere in this prospectus, particularly in “Risk Factors.”

         Business Overview

             We believe we are a leading provider of value-added logistics and supply chain solutions specializing in tactical and
         operational equipment. We drive sales between a fragmented base of vendors and a decentralized group of customers by
         tailoring our solutions to meet their needs. Most of our approximately 4,000 active customers (in the past 24 months) are
         within the Department of Defense and the Department of Homeland Security. Our business model is adaptable and scalable
         to serve other domestic and foreign government agencies. Through our vendor network, we offer our customers access to
         over 160,000 items, including apparel, expeditionary equipment, optical equipment, communications equipment, emergency
         medical supplies, lighting, eyewear and other tactical items, which we combine with our broad suite of value-added supply
         chain management services. We leverage our established supply chain management and government procurement expertise
         to develop and strengthen key customer and vendor relationships.

         Our Market Opportunity

             Over the last decade, the U.S. government has changed its approach to procurement of operational equipment by shifting
         away from custom-made products and equipment built to precise specifications, towards readily available, commercial
         off-the-shelf products and equipment. Over the same period, the Department of Defense streamlined the procurement
         process by providing increased access to flexible contractual procurement vehicles. As a result, the Defense Logistics
         Agency, or the “DLA,” has increased its reliance upon outside vendors and service providers for the logistics solutions
         necessary to get tactical and operational equipment to military personnel and to handle the supply chain management for a
         diverse and growing array of commercial off-the-shelf products.

             Concurrently with this shift in approach to procurement, the needs of the U.S. military and the nature of modern warfare
         have evolved significantly. The demands of recent conflicts have shifted the Department of Defense‟s focus towards
         equipping military personnel to engage in ground-based irregular warfare against asymmetric threats, and away from
         developing large-scale weapons platforms to support traditional air, land and sea campaigns against other major world
         powers. As a result, the Department of Defense now places a greater emphasis on ensuring that each soldier is equipped for
         the needs of modern combat with standardized, state-of-the-art equipment. To increase the combat effectiveness and safety
         of soldiers, the Department of Defense has increased its average spend-per-soldier on equipment from $2,000 per soldier
         during World War II (1941-1946) to $19,000 during the Global War on Terror (2001-2008) (adjusted to 2009 dollars based
         on the consumer price index). This trend is expected to continue as soldiers are provided a broader set of more complicated
         and expensive equipment kits to improve combat effectiveness and prepare for a more diverse range of missions. The
         Department of Defense projects that the amount spent on equipment per soldier will increase substantially in the future.

             Preparing for irregular warfare requires a significant number of trained and equipped personnel ready to deploy. As of
         December 31, 2010, the Department of Defense had approximately 1.4 million active duty military personnel worldwide.
         For example, the recently implemented Army Force Generation model requires that approximately one-third of active-duty
         units and one-sixth of reserve units are available to deploy each year, regardless of whether the United States is at war. In
         addition, all branches of the U.S. military are increasingly called upon to undertake missions beyond the scope of their
         traditional national defense functions, such as assistance with disaster relief, border patrol and nation building. Each of


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         these soldiers requires the latest operational equipment for his or her mission, which creates a continual need for new
         equipment for these soldiers.

             We believe these trends will continue for the foreseeable future. As the U.S. military continues to decentralize its
         approach to procurement and increase the amount of the overall defense budget allocated for equipment for each soldier, and
         as an increasing number of our customers experience the benefits of our supply chain management services, we believe we
         can continue to grow our sales over time, notwithstanding changes in overall U.S. defense spending.

             As a result of these trends, we have grown from $197.6 million of net sales, $6.9 million of net income and $8.0 million
         of EBITDA for the year ended December 31, 2006, to $1,330.8 million of net sales, $78.2 million of net income and
         $84.5 million of EBITDA for the year ended December 31, 2010. This represents a compound annual growth rate of our net
         sales, net income and EBITDA from 2006 to 2010 of 61%, 84% and 80%, respectively. While we continue to be well
         positioned to take advantage of this market opportunity and we expect to continue to experience growth in our net sales, net
         income and EBITDA, there can be no assurance that we will be able to maintain the level of compound annual growth rate in
         the future.


         Components of Our Consolidated Statements of Operations

         Net Sales

             We derive our net sales from the sale of goods and logistics solutions primarily to branches and units of the U.S. military
         or other federal agencies. In order for the U.S. military and other federal agencies to use budgetary funds to purchase goods
         and services, each acquisition must be executed through an appropriate contractual procurement vehicle. To shorten the
         contracting period, the U.S. government has created broad “indefinite delivery and indefinite quantity,” or “IDIQ,” contracts
         to act as procurement vehicles. These contracts provide regulatory and payment conduits that allow the customer to use
         government funds to purchase equipment and services from a limited number of pre-approved suppliers; however, they do
         not commit any customer to any set volume of purchases. The volume committed in any particular sale is set at the time the
         customer order is established.

             Most of our net sales are derived from individual orders for goods and services through IDIQ contracts. Under these
         contracts, we agree to provide itemized products and related services at fixed prices established at the time a customer order
         is made (or at the time the contract is entered into under some of our single-award IDIQ contracts, as described below).
         Although these contracts include certain parameters defining the types of products that may be purchased through the
         contract and limit the personnel that may use the contract as a vehicle to spend government funds, our contracts typically
         provide us with significant flexibility to source the specified products from multiple vendors. There are generally three
         different types of IDIQ contracts: multiple-award contracts, single-award contracts and federal supply schedules.

              •     Multiple-award IDIQ contracts are awarded to a limited number of pre-approved suppliers and have ceiling
                    limitations on the total amount of government funds that can be used through the contract. The award of particular
                    purchase orders under these contracts requires a second competitive bidding process among that limited number of
                    suppliers (which typically occurs within one day to a week upon submission of a bid). Our Spec Ops TLS contract
                    and Fire and Emergency Services Tailored Logistics Support contract are examples of multiple-award IDIQ
                    contracts.

              •     Single-award IDIQ contracts function very much like multiple-award IDIQ contracts. However, they are awarded to
                    a sole-supplier and often cover a much narrower breadth of products. The particular agency and customers who wish
                    to make purchases under a single-award IDIQ contract commit to a pre-approved sole supplier for the equipment and
                    services to be provided through that contract. Our single-award IDIQ contract vehicles, such as our GEN III
                    contract, are often entered into with a program office within a particular branch of the U.S. military to provide a
                    standardized suite of products that are intended for a broad cross-section of forces in that particular military branch.
                    Through these single-award IDIQ contracts, we commit to fulfill any orders received for goods and


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                    services identified in those contracts over a period of time, up to pre-determined volume limitations at fixed prices,
                    which are established at the time the contract is awarded.

              •     Federal supply schedules, such as our U.S. General Services Administration, or “GSA,” supply schedules, allow all
                    federal government agencies to purchase items identified in the schedule from a list of pre-approved suppliers at
                    pre-determined maximum prices. Unlike multiple-award IDIQ contracts, federal supply schedules do not typically
                    require a second round of bidding to secure a purchase order and do not have ceiling limitations on the total amount
                    of government funds that can be used through the procurement vehicle. Under our federal supply schedules, we may
                    be the only pre-approved supplier for a particular product, while for other products there are multiple pre-approved
                    suppliers, including our vendors.

             We do not commit to provide products at specific prices unless we have reached agreement with one or more of our
         vendors to supply the requisite products at an agreed upon price. For orders scheduled to be delivered over a longer period of
         time, such as in connection with our single-award program sales contracts, we will often negotiate annual price escalator
         provisions into the contract to preserve our margins. None of our sales are generated from time-and-materials or
         cost-reimbursable contracts.

             Although our contracts do not commit our customers to any set amount of purchases, the volume of our sales and our
         growth is partially dependent upon maintaining and increasing the number and size of our contracts. By broadening our
         contract portfolio, we are able to increase the variety of products and services that we may sell and expand our potential
         customer base. In addition, as the federal government changes its procurement strategy for a particular product or service, we
         may need to win new IDIQ and other contracts in order to continue selling those items. As our customers‟ procurement
         needs change, we may also need to enter into new single-award IDIQ and other types of contracts in order to continue to sell
         our products to our customers on a sufficient scale and in a manner that meets their requirements.

             Although some of our contracts may guarantee a nominal level of sales, our sales volume will continue to be largely a
         function of the size and ability of our sales force. Our sales force generates demand for the products and related services we
         offer by working closely with our customers to match our product offerings to their needs. Our portfolio of contracts is used
         by our sales team to facilitate processing of customer demand generated by their sales efforts. For the year ended
         December 31, 2009, our net sales were derived from over 60,000 customer orders.

              In calculating the total number of sales representatives in our sales force and the amount of net sales and gross profit
         attributable to each sales representative, we do not include those members of our sales force who primarily serve our state
         and local law enforcement customers, which were 10, 14 and 14 members of our sales force as of December 31, 2008, 2009
         and 2010, respectively. We treat sales to state and local law enforcement customers differently because these sales do not
         currently contribute a meaningful amount to our overall net sales and gross profit are derived from a distinct customer set,
         which possesses unique sales cycles and contractual processes. Sales representatives who serve our state and local law
         enforcement customers perform fundamentally different functions in the sales process than the other members of our sales
         force. These representatives focus primarily on marketing and customer service rather than on direct sales. Consequently, the
         activities and headcount of the sales representatives who serve our state and local law enforcement customers do not
         correlate to our financial performance in the same way as the activities and headcount of our other sales personnel. As a
         result, we exclude state and local law enforcement personnel in calculating the weighted average number of sales
         representatives and when reviewing sales force performance and overall financial results.

             For the years ended December 31, 2008, 2009 and 2010, we had a weighted average total of 74, 99 and 134 members in
         our sales force, respectively. We use the following process to calculate our weighted average sales force: first we determine
         the number of sales representatives at the end of each month; we then multiply that number by a factor that is determined by
         where the month falls during the year; finally, we take the average of the sum of the monthly numbers. For example, for a
         full year period, the number of sales representatives at the end of January is multiplied by twelve, the number of sales
         representatives at the end of February is multiplied by eleven, and the factor by which each month-end number of sales
         representatives is


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         multiplied decreases by one for each succeeding month so that the number of sales representatives at the end of December is
         multiplied by one.

            In 2010, the size of our weighted average sales force increased by an additional 35 members. As of December 31, 2008,
         2009 and 2010 the total number of sales representatives at the end of the period was 87, 118 and 166, respectively.

             We have established long-term relationships with approximately 1,400 active vendors (in the past 24 months). We have
         also instituted a preferred vendor program, which is comprised of approximately 300 vendors, that enables us to secure
         preferential terms and support on thousands of products. This allows us to generate sales by competitively bidding on
         opportunities for new and existing customers. We have established incentives for our sales team to increase sales of our
         preferred vendors‟ products, which further enhances our value proposition to our preferred vendors and allows us to generate
         additional sales on favorable terms. For the year ended December 31, 2010, approximately 90% of our sales were sourced
         from our preferred vendors. As additional vendors come to realize the value proposition provided by our experienced sales
         force, customer relationships and access to contractual procurement vehicles, we expect to continue to expand our preferred
         vendor program.

             We experience some seasonality in our orders as a result of the timing of U.S. federal government purchasing activity,
         which tends to increase near the end of the U.S. federal government fiscal year on September 30. Most of the funded federal
         government contracts stipulate that the budget allocation must be used during the corresponding fiscal year or be forfeited.
         That often results in increased spending near the end of the U.S. federal government fiscal year. This practice results in an
         increase in our fourth quarter net sales as a percentage of our total net sales for the year, as many of these items are shipped
         during the 90-day period following receipt of the corresponding orders. For the years ended December 31, 2009 and 2010,
         31% and 31% of our net sales were recognized in the fourth quarter, respectively. The seasonality in our results is partially
         mitigated by sales under our GEN III contract, which typically contributes an equal amount to our net sales each month and
         comprised approximately 19% of our net sales for the year ended December 31, 2010. As we continue to grow and as sales
         under our single-award contracts, such as GEN III, account for a smaller percentage of our net sales in the future, we expect
         the seasonality in our results to increase.

             The nature of our business may result in significant fluctuations in sales from quarter-to-quarter. In particular, our sales
         in any period may be impacted by changes in government funding decisions and the average size and product mix of the
         orders shipped during the period. In addition, the timing with respect to the fulfillment of large orders may cause volatility in
         our sales from one period to the next. The timing and composition of future orders and government funding decisions are
         difficult to predict, and we expect to continue to experience these fluctuations in sales in the future.


         Gross Profit

             Our gross profit is a function of the difference between the price our customers pay us for the products and services we
         provide and the price we pay our vendors for those products and services, or our “cost of goods sold.” Cost of goods sold
         consists only of our merchandise costs, and does not include shipping and handling costs, which have not historically
         represented a significant portion of our expenses. As a result, metrics that are a function of cost of goods sold, such as gross
         profit and gross margin, may not be comparable to those of other entities that define cost of goods sold differently from us.

             The factors that affect our gross profit include:

              •     whether we are providing value-added supply chain management services, such as kitting and assembly, custom
                    sourcing solutions, training and product education, product research and development and quality assurance, to our
                    customers in connection with particular product sales. In general, we are able to generate higher gross margins on
                    sales of products where we perform additional value-added services, since we are able to charge higher prices for
                    these bundled products, relative to the sale of stand-alone component parts;


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              •     whether the products are being sold to a new customer or are being supplied by vendors with whom we are working
                    to establish a new preferred relationship. From time to time, we will bid for a particular customer order or program
                    award at prices that may initially reflect lower margins in order to establish a relationship with a new customer or
                    vendor or where we believe we will be able to improve our gross margins over the life of the contract through price
                    escalation provisions in those contracts or by working with our vendors to improve pricing terms; and

              •     whether the order size creates a request for a volume-based discount. Similar to the discounts we may receive from
                    our vendors for large orders, from time to time our customers may expect similar volume-based discounts from us
                    on very large orders.

             Before bidding for contract awards and customer orders, we have agreed upon pricing terms with the corresponding
         vendors at levels that allow us to be competitive, while also preserving our gross margins. For commitments to deliver items
         over a longer period of time, such as through our single-award program contracts, we will often negotiate annual price
         escalator provisions as part of the arrangement to preserve our margins. Over the term of a single-award program contract,
         we will often work with our vendors to improve the pricing terms they offer us so that we may realize improved gross
         margins over the life of the program. Our contracts generally afford us with a significant amount of flexibility in sourcing the
         specified items from different vendors. This flexibility maintains competition among our vendors for many of the products
         we sell, which often allows us to obtain additional price improvements over the term of the contract.

             As described above, demand starts with our sales force. By monitoring and controlling the size and profitability of our
         sales force, we can gauge the overall success of our business. In particular, we use gross profit per sales representative as a
         measure to evaluate our performance. Gross profit per sales representative is equal to the gross profit realized during the
         period under consideration, divided by the weighted average number of representatives on our sales force during the period.
         For purposes of calculating gross profit per sales representative, we do not include gross profit attributable to those members
         of our sales force who primarily serve our state and local law enforcement customers. Total gross profit attributable to those
         members who primarily serve our state and local law enforcement customers was $2,649,178, $2,023,133 and $393,456 for
         the years ended December 31, 2008, 2009 and 2010, respectively. For the years ended December 31, 2008, 2009 and 2010,
         our weighted average sales force consisted of 74, 99 and 134 members, respectively. Our gross profit per weighted average
         sales representative for each of the years ended December 31, 2008, 2009 and 2010, was approximately $1,147,000,
         $1,223,000 and $1,224,000, respectively. Because it typically takes three to six months to sufficiently train new sales
         representatives before they make a meaningful contribution to our net sales, expanding our sales force has the result of
         temporarily decreasing gross profit per sales representative.


         Selling, General and Administrative Expenses

             Our selling, general and administrative, or “SG&A,” expenses consist primarily of payroll, payroll taxes, freight,
         commissions, travel and advertising and marketing expense. Certain of these expenses, including costs related to our
         infrastructure, payroll expense and travel, do not increase in proportion to increases in sales. In addition, products and other
         value-added services sold through our single-award IDIQ contracts often require less on-going sales effort to sustain and we
         generally incur lower freight, travel, commissions and employee costs per sales dollar received for these products. Since we
         will be a public company after the consummation of this offering, we anticipate that our SG&A expenses will increase due to
         increases in audit fees, professional fees, directors‟ and officers‟ insurance costs and expenses related to hiring additional
         personnel and expanding our administrative functions.

            Following this offering, we expect to incur additional stock compensation expense in connection with future option
         grants and other awards made in the form of our common stock.


         Taxes

             Prior to the consummation of this offering, we have been taxed under the rules and regulations of Subchapter S of the
         Internal Revenue Code of 1986, as amended (the “Code”). Under those rules and


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         regulations, we do not pay federal or state income taxes on our taxable income. Instead, our stockholders are liable for
         individual federal and state income taxes on their respective share of our income or loss. In connection with this offering, we
         will convert from a subchapter S corporation to a subchapter C corporation. In connection with this conversion, we will
         record a tax benefit (estimated to be approximately $500,000 as if the conversion occurred on December 31, 2010) to
         recognize deferred taxes. Upon conversion to a subchapter C corporation, we will be subject to tax in the United States as
         well as any other tax jurisdictions in which we conduct business.


         Interest Expense

             We incurred significant indebtedness in connection with the refinancing transactions. As a result, our annual interest
         expense will increase significantly from prior years‟ interest expense. Annual interest expense is expected to increase from
         historical interest expense by approximately $30 million. After further giving effect to the use of proceeds from this offering,
         assuming our common stock is offered at $       per share, the midpoint of the range set forth on the cover page of this
         prospectus, annual interest expense is expected to increase from historical interest expense by approximately $ million,
         assuming redemption of up to 35% of our senior secured notes, the maximum amount permitted to be redeemed under the
         senior secured notes indenture and $ million to repay a portion of the amounts remaining outstanding under our senior
         secured revolving credit facility. See “Prospectus Summary — Recent Developments” and “— Liquidity and Capital
         Resources.”


         Acquisition of MAR-VEL International, Inc.

             In June 2008, we acquired the stock of MAR-VEL International, Inc., or “MAR-VEL.” We acquired MAR-VEL in order
         to gain access to its Prime Vendor multiple-award IDIQ contract, which was the predecessor to our current Spec Ops TLS
         multiple-award IDIQ contract. The acquisition provided us with additional contract capacity to continue our sales growth
         until the award of our Spec Ops TLS contract was obtained. The aggregate purchase price for MAR-VEL was $5.5 million.
         Once we were awarded the Spec Ops TLS contract in 2009, the renewal option on the MAR-VEL Prime Vendor contract
         was not exercised. Therefore, the remaining unamortized portion of the intangible asset related to the MAR-VEL sales
         contract of $3.0 million was recorded as an impairment loss in 2009.


         Results of Operations

            The table below shows our results of operations for the periods presented in dollar amounts (in millions) and as a
         percentage of net sales.


                                                                                         Year Ended December 31,
                                                                      2008                         2009                     2010


         Net sales                                             $ 660.5         100.0 %      $ 932.2       100.0 %   $   1,330.8    100.0 %
         Cost of goods sold                                      573.0          86.7 %        809.1        86.8 %       1,166.4     87.6 %

         Gross profit                                          $   87.5         13.3 %      $ 123.1        13.2 %   $    164.4      12.4 %
         Selling, general and administrative expenses              44.3          6.7 %         60.9         6.5 %         80.9       6.1 %
         Intangible asset impairment                                 —            —             3.0         0.3 %           —         —
         Interest expense, net                                      1.2          0.2 %          1.4         0.2 %          5.3       0.4 %

         Net income                                            $   42.0          6.4 %      $   57.8        6.2 %   $     78.2       5.9 %




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                        Comparison of the Year Ended December 31, 2010 and the Year Ended December 31, 2009.


                                                                                                 Year Ended
                                                                                                 December 31,              % Change
                                                                                                                           2010 Over
                                                                                          2009                   2010        2009
                                                                                                 (in millions)


         Net sales                                                                    $ 932.2             $      1,330.8           43 %
         Cost of goods sold                                                             809.1                    1,166.4           44 %

         Gross profit                                                                 $ 123.1             $        164.4           34 %
         Selling, general and administrative expenses                                    60.9                       80.9           33 %
         Intangible asset impairment                                                      3.0                         —            —
         Interest expense, net                                                            1.4                        5.3          279 %
         Net income                                                                   $     57.8          $         78.2           35 %



         Net Sales

             Net sales for the year ended December 31, 2010 were $1,330.8 million, compared to $932.2 million for the year ended
         December 31, 2009, which represented a 43% increase. This increase was primarily due to a higher sales volume during
         2010. Our net sales for the year ended December 31, 2010 were positively impacted by the net weighted average addition of
         35 members to our sales force during the year ended December 31, 2010, as compared to the year ended December 31, 2009,
         which resulted in increased sales to existing customers and additional sales to new customers within our customer base.
         Sales growth also resulted from the introduction of new products sold through our multiple-award IDIQ contracts. In
         particular, our TLS contracts generated an additional $436.8 million of incremental sales, offset by the $213.7 million
         decrease in Prime Vendor sales, as our Prime Vendor contract was replaced in 2009 by TLS and sales were phased out. Of
         the net $223.1 million increase in TLS contracts, sales of expeditionary equipment and structures through our Spec Ops TLS
         contract, which began in the first quarter of 2009, contributed $147.5 million of additional sales, sales under our Fire and
         Emergency Services Tailored Logistics Support contract, under which we sell fire-resistant apparel and first-responder
         apparel and equipment, contributed $9.8 million. The remaining $65.8 million of additional sales were generated across
         other various product categories under our TLS contracts. In addition, sales under our GEN III contract were $22.6 million
         higher in 2010, compared to 2009, due to a lapse in full funding of monthly kit shipments in January 2009. In June 2010, we
         began shipping orders under our Fire Resistant Environmental Ensemble, or “FREE,” contract, which contributed
         $95.0 million of additional sales for the year ended December 31, 2010. The remaining $57.9 million increase in net sales
         included $37.9 million of additional commercial sales, primarily to defense contractors. Sales through our GSA federal
         supply schedules for the year ended December 31, 2010 were $125.7 million, compared to $136.5 million for the year ended
         December 31, 2009. This decrease was primarily the result of our decision to effect certain sales in 2010 under our TLS
         contracts that were effectuated in 2009 under our GSA federal supply schedules.


         Gross Profit

             Gross profit for the year ended December 31, 2010 was $164.4 million, as compared to $123.1 million for the year ended
         December 31, 2009, which represented a 34% increase. The increase in gross profit was primarily attributable to the increase
         in the volume of our sales. Gross profit per sales representative was $1,224,000 for the year ended December 31, 2010, as
         compared to $1,223,000 for the year ended December 31, 2009. Our weighted average sales force for the year ended
         December 31, 2010 was 134 members, as compared to 99 members for the year ended December 31, 2009. Gross profit as a
         percentage of net sales for the year ended December 31, 2010 decreased to 12.4% as compared to 13.2% for the year ended
         December 31, 2009. Consistent with our business model, this decrease was primarily due to lower gross profit as a
         percentage of net sales realized from the sale of new products, in particular expeditionary equipment and structures, from
         new vendors. From time to time, we will execute orders on lower gross margins in order to establish a relationship with a
         new customer or vendor.


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         Selling, General and Administrative Expenses

             SG&A expenses for the year ended December 31, 2010 were $80.9 million, compared to $60.9 million for the year
         ended December 31, 2009, which represented a 33% increase. This increase was primarily due to the increase in the volume
         of our sales and the related payroll, commissions, travel, freight and other expenses incurred from expanding our sales force
         and supporting infrastructure. SG&A expenses were 6.1% of net sales for the year ended December 31, 2010, down from
         6.5% of net sales for the year ended December 31, 2009. This decrease was primarily a result of our ability to leverage our
         existing infrastructure through a decrease of 0.6% in payroll and payroll-related expenses as a percentage of net sales. In
         addition, depreciation and amortization decreased by 0.1% of net sales, as a result of the write-off of the unamortized portion
         of the intangible asset related to the acquisition of MAR-VEL. See “—Acquisition of MAR-VEL International, Inc.” These
         decreases were partially offset by an increase of 0.4% in expenses for professional fees as a percentage of net sales primarily
         incurred in connection this offering and the pursuit of other strategic opportunities and financings.


         Net Income

             Net income for the year ended December 31, 2010 was $78.2 million, compared to $57.8 million for the year ended
         December 31, 2009, which represented a 35% increase. This increase was attributable to the factors described above. Net
         income as a percentage of net sales for 2010 decreased to 5.9% as compared to 6.2% for 2009. This decrease was primarily
         the result of our decline in gross profit as a percentage of net sales, as described above, offset slightly by lower SG&A
         expenses as a percentage of net sales. In addition, our interest expense, net for 2010 was $5.3 million, as compared with
         $1.4 million for 2009, primarily as a result of increased borrowings under our senior secured revolving credit facility and our
         former term loan facility. Our interest expense will increase significantly in 2011 as a result of the offering of our senior
         secured notes.


         Liquidity and Capital Resources

         General

             Our primary liquidity needs are for working capital and capital expenditures. We have historically financed our
         operations through cash from operating activities and borrowings under our revolving credit facilities and expect that these
         will continue to be our principal sources of liquidity in the future. Based on our current level of operations, we believe that
         our cash flow from operations, available cash and available borrowings under our senior secured revolving credit facility
         will be adequate to meet our liquidity needs for at least the next twelve months. We cannot assure you, however, that our
         business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating
         improvements will be realized on schedule or that future borrowings will be available to us under our senior secured
         revolving credit facility in an amount sufficient to enable us to repay our indebtedness or to fund our other liquidity needs.
         See “Risk Factors — Risks Related to Our Common Stock.”

             Our business and growth strategy has historically required only a modest amount of capital expenditures. In 2009, we
         spent $9.2 million on capital expenditures, primarily in connection with the purchase of our current headquarters, and in
         2010 capital expenditures were $3.4 million, primarily in connection with the move to our new corporate offices and the
         construction of a warehouse. Our corporate offices and warehouse are each owned by related entities under the common
         ownership that are consolidated with ADS in our historical financial statements. See “Certain Relationships and Related
         Party Transactions.” We expect our capital expenditures to increase in 2011 to approximately $4.5 million.

            Historically, a substantial portion of our sales have been shipped directly from our vendors. For the year ended
         December 31, 2010, approximately 51% of our net sales were from orders shipped directly from the vendor. While the
         remainder of our shipments go through our warehouse, only a small percentage are held in inventory without a customer
         order. This allows us to minimize capital requirements for merchandise inventory. We may experience future increases in
         merchandise inventory related to new single-award contracts, such as the increase in merchandise inventory that we
         experienced in 2007 in connection with the award of our GEN III contract.


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             As a result of the refinancing transactions, annual interest expense is expected to increase from historical interest expense
         by approximately $30 million. After further giving effect to the use of proceeds from this offering, assuming our common
         stock is offered at $     per share, the midpoint of the range set forth on the cover page of this prospectus, annual interest
         expense is expected to increase from historical interest expense by approximately $ million, assuming redemption of up to
         35% of our senior secured notes, the maximum amount permitted to be redeemed under the senior secured notes indenture,
         and $ million to repay a portion of the amounts remaining outstanding under our senior secured revolving credit facility.
         See “Prospectus Summary — Recent Developments” and “— Liquidity and Capital Resources.”

             ADS Tactical, Inc. is a holding company and all of our operations are conducted through our subsidiaries. Consequently,
         we rely on dividends or advances from our subsidiaries. The ability of such subsidiaries to pay dividends and our ability to
         receive distributions on our investments in other entities is subject to applicable local law. Such laws and restrictions could
         limit the payment of dividends and distributions to us.

             A summary of operating, investing and financing activities are shown in the following table:


                                                                                                                   Year
                                                                                                            Ended December 31,
                                                                                                     2008           2009             2010
                                                                                                               (in millions)


         Cash provided by operating activities                                                   $     15.9      $    35.3       $     31.7
         Cash used in investing activities                                                            (14.9 )         (6.6 )           (3.0 )
         Cash provided by (used in) financing activities                                                0.5          (29.5 )          (27.3 )
         Net increase (decrease) in cash and cash equivalents                                    $      1.5      $    (0.8 )     $      1.4
         Cash and cash equivalents at the beginning of year                                             0.7            2.2              1.4

         Cash and cash equivalents at the end of year                                            $      2.2      $     1.4       $      2.8


             As of December 31, 2010, we had $2.8 million in cash and cash equivalents and $30.6 million in working capital.


         Cash provided by operating activities.

             For the year ended December 31, 2010, our operating activities generated net cash of $31.7 million, as compared to
         $35.3 million for the year ended December 31, 2009. The $3.6 million decrease in net cash generated from operating
         activities for the year ended December 31, 2010 was primarily due to an increase in net income of $20.4 million offset by an
         increase in inventories of $26.5 million compared to an increase of $8.5 million for the year ended December 31, 2009. In
         addition, the year ended December 31, 2009 included a non-cash charge related to intangible asset impairment of
         $3.0 million. The comparable increases in accounts receivable and accounts payable for the years ended December 31, 2009
         and 2010, were the result of increases in revenue and cost of goods sold for both periods.

             For the year ended December 31, 2009, our operating activities generated net cash of $35.3 million, as compared to
         $15.9 million for the year ended December 31, 2008. The increase was primarily due to the increase in net income of
         $15.8 million during 2009. The increase in cash generated from operating activities was also the result of an increase in
         accounts payable of $32.1 million in 2009, offset by an increase in accounts receivable of $53.1 million during this period.
         The increases in accounts receivable and accounts payable were primarily the result of increases in sales and cost of goods
         sold and the timing of payments and collections.


         Cash used in investing activities.

             For the year ended December 31, 2010, net cash used in investing activities was $3.0 million, as compared to
         $6.6 million of net cash used in investing activities during the year ended December 31, 2009. The use of cash in 2010 was
         primarily due capital expenditures related to the move into our headquarters and the construction of our warehouse. For the
         year ended December 31, 2009, the $7.5 million purchase of our new
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         headquarters, combined with $1.7 million in miscellaneous equipment purchases were somewhat offset by $2.1 million in
         repayment of advances to affiliated companies and stockholders.

             For the year ended December 31, 2009, net cash used in investing activities was $6.6 million, as compared to
         $14.9 million of net cash used in investing activities during 2008. In 2009, we used $7.5 million of cash to purchase our
         existing headquarters and $1.7 million to fund other capital expenditures, and received $2.1 million from the repayment of
         advances to affiliated companies. In 2008, we used $4.7 million of cash to acquire MAR-VEL and $7.5 million for the
         purchase of a warehouse. In 2008, we also used $0.8 million to fund other capital expenditures and made advances of
         $1.9 million to affiliated companies.


         Cash provided by (used in) financing activities.

             For the year ended December 31, 2010, net cash used in financing activities was $27.3 million, as compared to
         $29.5 million during the year ended December 31, 2009. Net cash used in financing activities of $27.3 million in 2010 was a
         result of cash distributions to our stockholders of $129.0 million and repayment of debt of $14.3 million, offset primarily by
         borrowings of $118.5 million. In 2010, we borrowed $67.0 million under our senior secured revolving credit facility to repay
         our former revolving credit facility, $50.0 million under our term loan facility and $1.5 million under our construction loan
         related to our new warehouse. We repaid a former term loan with a payment of $9.0 million and made additional payments
         of $5.3 million on our term loan facility and property mortgages. The cash distributions to our stockholders of
         $129.0 million in 2010 included two special distributions totaling $98.6 million and distributions for taxes of $30.4 million.

             For the year ended December 31, 2009, net cash used in financing activities was $29.5 million, as compared to net cash
         provided by financing activities of $0.5 million in 2008. In 2009, we incurred long-term debt of $6.4 million related to the
         purchase of our existing headquarters, incurred $1.6 million under our former revolving credit facility, made cash
         distributions of $33.2 million to our stockholders primarily relating to taxable income and made principal payments on
         long-term debt of $5.3 million. In 2008, we incurred long-term debt of $6.3 million related to the purchase of a warehouse,
         incurred $21.5 million under our former revolving credit facility, made cash distributions of $25.5 million to our
         stockholders primarily relating to taxable income and made principal payments on long-term debt of $3.1 million.

             For the year ended December 31, 2008, net cash provided by financing activities was $0.5 million, as compared to net
         cash used in financing activities of $9.7 million during the comparable period in 2007. In 2007, we made principal payments
         of $3.3 million under our former revolving credit facility, made cash distributions of $3.4 million to our stockholders
         primarily relating to taxable income and made principal payments on long-term debt of $3.1 million.

             In January 2011, we made distributions to our stockholders of $10.6 million principally related to estimated taxes for the
         fourth quarter of 2010. We will continue to make additional distributions related to taxable income each quarter until the
         consummation of this offering. In connection with this offering we will convert from a subchapter S corporation to a
         subchapter C corporation. Tax payments will no longer be distributed to stockholders and will be classified as cash provided
         by (used in) operating activities.


         Senior Secured Revolving Credit Facility

             On February 18, 2010, we refinanced our then-existing credit facility by entering into a $180.0 million senior secured
         revolving credit facility with an optional increase in commitments of up to $25.0 million, which we later amended on
         October 22, 2010 to permit us to enter into our term loan facility. In connection with the refinancing transactions, we
         amended and restated the senior secured revolving credit facility to, among other things, repay our term loan facility, provide
         for up to $200.0 million in borrowings with an optional increase in commitments of up to $50.0 million, and permit the
         offering of the senior secured notes and the distributions to our equity holders. The amended and restated senior secured
         revolving credit facility became effective concurrently with the completion of the offering of the senior secured notes. See
         “Description of Certain Indebtedness — Senior Secured Revolving Credit Facility.”


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             Borrowings under the senior secured revolving credit facility bear interest at a rate per annum equal to, at our option,
         either (a) with respect to base rate loans and swingline loans, a base rate determined by reference to the highest of (1) the
         prime rate of Wells Fargo Bank, National Association, (2) the federal funds effective rate plus 0.50% and (3) a LIBOR rate
         determined by reference to the costs of funds for U.S. dollar deposits for an interest period of one month adjusted for certain
         additional costs, plus 1.00% or (b) with respect to Eurodollar rate loans, a LIBOR rate determined by reference to the costs
         of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain eurocurrency
         liabilities established by the Federal Reserve Board, in each case plus an applicable margin. Commencing with the
         completion of the first calendar quarter after June 30, 2011, the applicable margin for borrowings thereunder will be subject
         to adjustment each fiscal quarter, based on the average excess availability.

            As of March 31, 2011, we had $66.1 million drawn under the senior secured revolving credit facility, resulting in
         availability of $133.9 million, subject to borrowing base limitations, under our senior secured revolving credit facility. As of
         March 31, 2011, we had $6.8 million letters of credit outstanding.

             Our senior secured revolving credit facility contains a number of covenants that, among other things and subject to
         certain exceptions, restrict our ability and the ability of our subsidiaries to incur additional indebtedness and alter, modify or
         make payments on certain indebtedness; incur additional liens; make investments, including: purchase of obligations or
         securities, capital contributions, loans, deposits, guarantees, or acquisitions; consolidate, merge, dissolve or liquidate; pay
         dividends on our or our subsidiaries‟ capital stock or redeem, repurchase or retire such capital stock or our other
         indebtedness; create restrictions on the payment of dividends or other amounts to us; engage in transactions with our
         affiliates; make accounting changes or amendments to organizational documents; modify material contracts; alter the
         business we conduct; and sell or transfer assets, including capital stock of our subsidiaries.

             Each of the covenants limiting dividends and other restricted payments, investments, loans and acquisitions, incurrence
         of unsecured debt, and prepayments or redemptions of certain indebtedness are expected to permit the restricted actions so
         long as certain payment conditions are satisfied, including certain specified excess availability and fixed charge coverage
         tests. In addition, we are required to maintain, on a monthly basis, a fixed charge coverage ratio of not less than 1.1 to 1.0 if
         either an event of default has occurred and is continuing or the undrawn availability under our senior secured revolving
         credit facility is less than 12.5% of our aggregate commitment, which requirement shall no longer apply after such
         conditions cease to apply for a period of 90 days. The senior secured revolving credit facility contains certain customary
         representations and warranties, affirmative covenants and collateral reporting and covenants. Prior to the effectiveness of the
         amended and restated senior secured revolving credit facility, as of December 31, 2010, we were in compliance with all
         covenants. Noncompliance with certain covenants in the senior secured revolving credit facility, including the failure to meet
         the ratio described above, would result in an event of default as defined in the senior secured revolving credit facility, which
         could result in the acceleration of all amounts outstanding under the senior secured revolving credit facility and/or a
         termination of the commitments thereunder. An event of default under the senior secured revolving credit facility will also
         result in a cross-default under the senior secured notes indenture.

             We are required to make prepayments under the senior secured revolving credit facility at any time when and to the
         extent that, the aggregate amount of outstanding loans and letters of credit under our senior secured revolving credit facility
         exceeds either the borrowing base or the aggregate commitments of the lenders. See “Description of Certain Indebtedness.”


         Senior Secured Notes

             On March 25, 2011, we issued $275.0 million of 11% senior secured notes due April 1, 2018. Interest on the senior
         secured notes is payable on April 1 and October 1 of each year. The proceeds from the offering of the senior secured notes,
         along with amounts drawn from our senior secured revolving credit facility, were used (1) to make a distribution of
         $217.1 million to our stockholders, (2) to repay our term loan facility, (3) to pay the transaction bonuses and (4) to pay
         related transaction fees and expenses, including discounts and


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         commissions to the initial purchasers of the senior secured notes. See “Prospectus Summary — Recent Developments.”

             The senior secured notes are secured by a first-priority lien (subject to certain exceptions and permitted liens) on certain
         fixed and intangible assets, capital stock of certain subsidiaries, certain intercompany loans held by us and the guarantors of
         the senior secured notes, proceeds of the foregoing, in each case held by us and the guarantors of the senior secured notes.
         The senior secured notes are also secured by a second-priority lien (subject to certain exceptions and permitted liens) on all
         accounts (other than certain notes accounts), instruments, chattel paper and other contracts evidencing such accounts,
         inventory, certain investment property, cash (other than cash proceeds of the collateral first-priority lien on the senior
         secured notes), general intangibles and instruments related to the foregoing and proceeds of the foregoing, in each case held
         by us and the guarantors of the senior secured notes.

             Prior to April 1, 2015, the senior secured notes may be redeemed in part or in full at a redemption price equal to 100% of
         the principal amount of the senior secured notes, plus a make-whole premium calculated in accordance with the senior
         secured notes indenture and accrued and unpaid interest, if any. In addition, prior to April 1, 2014, up to 35% of the original
         principal amount of the senior secured notes (including any additional notes issued under the senior secured notes indenture)
         may be redeemed with the net proceeds of certain equity offerings completed before April 1, 2014 at 111%, provided that
         after giving effect to such redemption, not less than 50% of the senior secured notes remain outstanding. On or after April 1,
         2015, the senior secured notes may be redeemed in part or in full at the following percentages of the outstanding principal
         amount prepaid: 108.250% prior to April 1, 2016; 105.500% on or after April 1, 2016, but prior to April 1, 2017; and 100%
         on or after April 1, 2017.

             The senior secured notes indenture contains customary covenants and restrictions on the activities of us and our restricted
         subsidiaries, including, but not limited to, our ability to incur additional indebtedness; pay dividends or make distributions or
         redeem our capital stock; pay or redeem or purchase certain indebtedness; make certain loans and investments; sell assets;
         create liens on certain assets to secure debt; enter into agreements restricting our subsidiaries‟ ability to pay dividends;
         consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and engage in transactions with
         affiliates. Certain of these covenants will be suspended if the senior secured notes are assigned an investment grade rating by
         both Standard & Poor‟s Rating Services and Moody‟s Investor Service, Inc. and no default has occurred or is continuing. If
         either rating on the senior secured notes should subsequently decline to below investment grade, the suspended covenants
         would be reinstated.

             The senior secured notes will not be registered under the Securities Act. See “Description of Certain Indebtedness.”


         Term Loan Facility

             On October 22, 2010, we entered into the term loan facility with Wells Fargo Bank, National Association as
         administrative agent. On March 25, 2011, we fully repaid the term loan facility with a portion of the proceeds from the
         offering of our senior secured notes. See “Prospectus Summary — Recent Developments.”

            The term loan facility provided for a total commitment of $50.0 million in a single borrowing. The proceeds from the
         borrowing under the term loan facility were used to fund permitted dividends and cover related transaction costs, including a
         cash distribution of approximately $48.6 million to our principal stockholders, which was distributed on October 22, 2010.

            The term loan facility was scheduled to mature on February 18, 2013 and bore interest at variable rates based on the
         Eurodollar rate or the bank‟s base rate plus an applicable margin of 4.00% and 3.00%, respectively. Interest on the
         Eurodollar rate loan was payable on the last day of each applicable interest period, while interest on the bank‟s base rate loan
         was payable monthly in arrears not later than the first day of each calendar month.


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         Guarantees

             We guarantee debt in the amount of $7.5 million incurred by one of our affiliates and debt in the amount of $6.1 million
         incurred by another of our affiliates. The financial statements of both of these affiliates have been consolidated with our
         financial statements. We also guarantee two mortgages totaling $2.0 million related to office and warehouse space that we
         lease. For more information, please see “Certain Relationships and Related Party Transactions” and the consolidated
         financial statements included elsewhere in this prospectus.


         Critical Accounting Policies and Significant Accounting Estimates

             The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting
         principles requires management to make certain estimates and assumptions. These estimates and assumptions affect the
         reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
         statements and net sales and expenses during the periods reported. The following accounting policies involve “critical
         accounting estimates” because they are particularly dependent on estimates and assumptions made by management about
         matters that are highly uncertain at the time the accounting estimates are made. In addition, while we have used our best
         estimates based on the facts and circumstances available to us at the time, different estimates reasonably could have been
         used in the current period. Changes in the accounting estimates we used are reasonably likely to occur from period to period,
         which may have a material impact on the presentation of our financial condition and results of operations. We review these
         estimates and assumptions periodically and reflect the effects of revisions in the period that they are determined to be
         necessary. For further information on all of our significant accounting policies, please see note 2 of the accompanying notes
         to our audited consolidated financial statements included elsewhere in this prospectus.


         Revenue Recognition

             We derive revenue primarily from the sale and distribution of tactical and operational equipment. In order for revenue
         and the related cost of sales from product sales to be recognized there must be (i) persuasive evidence that an arrangement
         exists, (ii) delivery has occurred, (iii) the price to the buyer is fixed or determinable and (iv) collectability of the related
         receivable is reasonably assured. Revenue is recognized depending on the specific terms of the arrangement: either at the
         point of shipment for those sales under FOB shipping point terms, or when it is received by the customer for sales under
         FOB destination terms. For those transactions that are shipped at or near the end of the reporting period for which the sales
         terms are FOB destination, we confirm receipt of the shipment, and if delivery has not occurred, then the revenue is not
         recognized. We evaluate whether it is appropriate to record product sales and related costs on a gross or net basis in
         accordance with ASC 605-45, Principal Agent Considerations . Management uses judgment in this consideration, including
         whether we are primarily obligated in a transaction, subject to inventory risk, has latitude in establishing prices and
         suppliers, and other factors or indicators that support the determination of whether we have acted as a principal or agent in
         the related transaction. Shipping and handling costs billed to customers are included in sales. Many of our products are
         purchased to meet customer specifications, and customer arrangements do not typically involve post-installation or post-sale
         testing and acceptance. There is no significant variation in sales terms geographically, or among product lines and industries.


         Accounts Receivable

             Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The majority of our accounts
         receivable is due from federal, state, and local government agencies. Credit is extended based on an evaluation of a
         customer‟s financial condition. We do not require collateral from our customers. Accounts receivable are generally due
         within 30 to 90 days and are stated at amounts due from customers, net of allowances for doubtful accounts, when
         management has determined that the balance is not fully collectible. Accounts receivable outstanding longer than the
         contractual payment terms are considered past due. Amounts collected on trade accounts receivable are included in net cash
         provided by operating activities


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         in the consolidated statements of cash flows. We determine the need for an allowance for doubtful accounts by considering
         the customer‟s financial condition, the current receivables aging, and current payment patterns. We review on a quarterly
         basis the need for an allowance for doubtful accounts, which represents our best estimate of the amount of probable credit
         losses in our existing accounts receivable. Past due balances over 90 days and over a specified amount are reviewed
         individually for collectibility. If the financial condition of our customers were to deteriorate beyond our estimates, resulting
         in an impairment of their ability to make payments, we would be required to reserve and write off additional accounts
         receivable balances, which would adversely impact our net earnings and financial condition. Actual uncollectible accounts
         could exceed our estimates, and changes to our estimates will be accounted for in the period of change. Account balances are
         charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered
         remote. We do not have any off-balance-sheet credit exposure related to our customers. At December 31, 2010, we recorded
         a $400,000 allowance in connection with one of our accounts receivable. At December 31, 2010, we expect to fully collect
         substantially all other accounts receivable.


         Inventory

             Inventories consist of tactical and operational equipment produced and manufactured by other parties and are stated at
         the lower of cost or market. Cost is determined by the first-in, first-out basis. For purposes of analyzing the lower of cost or
         market, market is current replacement cost.

             We make purchasing decisions principally based upon firm sales orders from customers, the availability and pricing of
         finished products from our vendors, and projected customer requirements. Future events that could adversely affect these
         decisions and result in significant charges to our operations include slowdown in customer demand, customer delay in the
         issuance of sales orders, miscalculation of customer requirements, loss of customers and/or cancellation of sales orders and
         sales contracts. We consider the need for inventory reserves related to obsolescence and unusable items on a continual basis.

             Market conditions surrounding products are also considered periodically to determine if there are any net realizable
         valuation matters, which would require a write-down of any related inventories. If market conditions change, it may be
         necessary for inventory reserves and write-downs, which would be accounted for in the period of change. Cash flows from
         the purchase and sale of inventory are included in cash flows from operating activities.


         Long-Lived Assets

             We account for the impairment of long-lived assets and amortizable intangible assets in accordance with standards for
         accounting for the impairment or disposal of long-lived assets. Long-lived assets, such as property, and equipment, and
         purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances
         indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is
         measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be
         generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is
         recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Management
         assesses the recoverability of long-lived assets whenever events or changes in circumstance indicate that the carrying value
         may not be recoverable.

             Management must make assumptions regarding estimated future cash flows and other factors to determine the fair value
         of these assets. Other factors could include, among other things, quoted market prices, or other valuation techniques
         considered appropriate based on the circumstances. If these estimates or related assumptions change in the future, an
         impairment charge may need to be recorded. Impairment charges would be included in our consolidated statements of
         operations, and would result in reduced carrying amounts of the related assets on our consolidated balance sheets.


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         Contingencies and Litigation

             Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are
         recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be
         reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Such accruals are
         adjusted as further information develops or circumstances change.

             We periodically assess the potential liabilities related to any lawsuits or claims brought against us. While it is typically
         very difficult to determine the timing and ultimate outcome of these actions, we use our best judgment to determine if it is
         probable that we will incur an expense related to a settlement for such matters and whether a reasonable estimation of such
         probable loss, if any, can be made. Given the inherent uncertainty related to the eventual outcome of litigation, it is possible
         that all or some of these matters may be resolved for amounts materially different from any estimates that we may have
         made with respect to their resolution.


         Recent Accounting Developments

             As part of the transition to the Financial Accounting Standards Board Accounting Standards Codification, or “FASB
         ASC,” plain English references to the corresponding accounting policies are provided, rather than specific numeric ASC
         references. The ASC identifies the sources of accounting principles and the framework for selecting the principles to be used
         in the preparation of financial statements of nongovernmental entities that are presented in conformity with the
         U.S. generally accepted accounting principles. The ASC is effective for financial statements issued for interim and annual
         periods ending after September 15, 2009. There was no impact on the consolidated balance sheets, statements of income, or
         cash flows upon the adoption of the ASC.

              In June 2009 the FASB issued updated guidance, which amends guidance for determining whether an entity is a variable
         interest entity, or “VIE,” and requires the performance of a qualitative rather than a quantitative analysis to determine the
         primary beneficiary of a VIE. Under this guidance, an entity would be required to consolidate a VIE if it has (i) the power to
         direct the activities that most significantly impact the entity‟s economic performance and (ii) the obligation to absorb losses
         of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. This guidance is effective for the
         first annual reporting period that begins on January 1, 2010, with early adoption prohibited. The adoption of this guidance
         did not have a material impact on the company‟s consolidated financial statements.

             In May 2009, the FASB issued updated guidance to establish general standards of accounting for and disclosure of
         subsequent events. This guidance, as amended, renames the two types of subsequent events as recognized subsequent events
         or nonrecognized subsequent events and modifies the definition of the evaluation period for subsequent events as events or
         transactions that occur after the balance sheet date, but before the financial statements are issued. This will require
         non-public entities to disclose the date through which an entity has evaluated subsequent events and the basis for that date.
         The company adopted this guidance during 2009. The adoption of this guidance did not have a material impact on the
         company‟s consolidated financial statements.


         Effect of Inflation

             Most of our sales are generated from purchase orders under IDIQ contracts that are to be performed within 90 days.
         Some of our sales under our single-award IDIQ contracts contemplate deliveries over a period of six to 12 months at
         pre-determined prices (subject, in some cases, to price escalation provisions). We have generally been able to anticipate
         increases in costs when pricing the products and related services we offer under these contracts. For commitments to deliver
         items over a longer period of time, such as through our single-award IDIQ contracts, we have often been able to negotiate
         annual price escalator provisions as part of the arrangement to preserve our margins. Consequently, net income as a
         percentage of net sales has not been significantly impacted by inflation. There can be no assurance, however, that our sales
         or operating results will not be impacted by inflation in the future.


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         Off-Balance Sheet Arrangements

             We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising
         capital, incurring debt or operating our business. We do not have any off-balance sheet arrangements or relationships with
         entities that are not consolidated into or disclosed on our financial statements that have or are reasonably likely to have a
         material current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital
         resources.


         Contractual Obligations

            The following table reflects our contractual obligations and commercial commitments as of December 31, 2010.
         Commercial commitments include lines of credit, guarantees and other potential cash outflows resulting from a contingent
         event that requires our performance pursuant to a funding commitment.


                                                                                      Payments Due by Period
                                                                              Less than                                        More than
         Contractual
         Obligations                                         Total             1 Year           1-3 Years      3-5 Years        5 Years
                                                                                             (in thousands)


         Long-term debt (1)(2)                           $    58,638      $      21,065      $     24,933      $     787      $ 11,853
           Operating leases (3)                                1,956                703               767            486
           Capital leases (4)                                     32                 32                —              —               —
           Interest on long-term debt (5)                     16,598              2,318             2,346          1,610          10,324
         Line of credit (6)                                   90,155             90,155                —              —               —
            Total                                        $ 167,379        $ 114,273          $     28,046      $   2,883      $ 22,177




         (1)    Long-term debt includes obligations for (a) our corporate headquarters in Virginia Beach, VA, which is owned by
                Tactical Office, LLC, a related entity under common ownership that is consolidated with ADS in our historical
                financial statements, and (b) our kitting facility in Virginia Beach, VA, which is owned by Tactical Warehouse, LLC,
                a related entity under common ownership that is consolidated with ADS in our historical financial statements. See
                “Certain Relationships and Related Party Transactions” and notes 6, 10 and 11 to our consolidated financial
                statements.

         (2)    Long-term debt as of December 31, 2010 includes our term loan facility, which was repaid on March 25, 2011 with
                the proceeds from the sale of our senior secured notes. See “Prospectus Summary — Recent Developments.”

         (3)    Operating leases includes lease obligations for our main warehouse in Virginia Beach, VA, our warehouse in San
                Diego, CA and an office and warehouse in Pennsauken, NJ.

         (4)    Capital leases includes lease obligations for hardware and software equipment at our facilities in Pennsauken, NJ.

         (5)    Includes interest on our term loan facility with estimated interest payments at 4.3%, which represents the weighted
                average interest rate paid during 2010, as well as interest on other long-term debt and capital leases. This term loan
                was repaid on March 25, 2011 with the proceeds of our senior secured notes.

         (6)    Line of credit consists of our senior secured revolving credit facility. Does not include interest payments on the senior
                secured revolving credit facility, which bears interest at a variable rate. We estimate that annual interest payments of
                $3.6 million would be required based on a weighted-average interest rate of 4% paid during 2010, including a
                commitment fee, assuming outstanding borrowings of approximately $90 million, which we expect to change in the
                future as additional borrowings become necessary. Actual interest may vary. See “— Liquidity and Capital
                Resources — Senior Secured Revolving Credit Facility.”

             The following table summarizes our contractual obligations and commercial commitments as of December 31, 2010 on
         an as adjusted basis to give effect to the refinancing transactions that we
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         completed in March 2011 as if they had occurred on December 31, 2010, but does not give effect to this offering and the use
         of proceeds therefrom.


                                                                                        Payments Due by Period
                                                                            Less than                                         More than
         Contractual
         Obligations                                       Total             1 Year               1-3 Years      3-5 Years     5 Years
                                                                                               (in thousands)


         As adjusted long-term debt:
         Senior secured notes                          $ 275,000        $          —           $         —       $       —    $ 275,000
         Other long-term debt                             13,638                  295                   703             787      11,853
         Operating leases (1)                              1,956                  703                   767             486          —
         Capital leases (2)                                   32                   32                    —               —           —
         Interest on long-term debt (3)                  226,170               31,042                62,194          62,110      70,824
         Line of credit (4)                               93,155               93,155
         Total                                         $ 609,951        $ 125,227              $     63,664      $ 63,383     $ 357,677




           (1) Includes lease obligations for a warehouse in Virginia Beach, VA, a warehouse in San Diego, CA and an office and
               warehouse in Pennsauken, NJ.

           (2) Includes lease obligations for hardware and software equipment at our facilities in Pennsauken, NJ.

           (3) Includes interest on our senior secured notes as well as interest on our other long-term debt and capital leases.

           (4) Includes amounts drawn at the closing of the issuance of our senior secured notes to pay certain fees and expenses in
               connection with the refinancing transactions. Does not include interest payments on the senior secured revolving credit
               facility, which bears interest at a variable rate. We estimate that annual interest payments of $3.7 million would be
               required based on a weighted-average interest rate of 4% paid during 2010, including a commitment fee, assuming
               outstanding borrowings of approximately $93 million, which we expect to change in the future as additional
               borrowings become necessary or repayments are made.


         Qualitative and Quantitative Disclosure about Market Risk

             Our exposure to market risk relates to changes in interest rates for borrowings under our term loan facility and our senior
         secured revolving credit facility. These borrowings bear interest at variable rates. Based on the amount outstanding under our
         term loan facility and our senior secured revolving credit facility on December 31, 2010, a hypothetical one percentage point
         increase in interest rates would increase our annual interest expense by approximately $1.5 million. While we may enter into
         agreements limiting our exposure to higher interest rates, any such agreements may not offer complete protection from this
         risk.


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                                                                    BUSINESS


         Our Company

             We believe we are a leading provider of value-added logistics and supply chain solutions specializing in tactical and
         operational equipment. We drive sales between a fragmented base of vendors and a decentralized group of customers by
         tailoring our solutions to meet their needs. Most of our approximately 4,000 active customers (in the past 24 months) are
         within the Department of Defense and the Department of Homeland Security. Our business model is adaptable and scalable
         to serve other domestic and foreign government agencies. Through our vendor network, we offer our customers access to
         over 160,000 items, which we combine with our broad suite of value-added supply chain management services. We leverage
         our established supply chain management and government procurement expertise to develop and strengthen key customer
         and vendor relationships.

             Our customers need the products we offer for ongoing training and to be prepared for a variety of peacetime operations
         and missions at home and abroad. The products we offer include apparel, expeditionary equipment, optical equipment,
         communications equipment, emergency medical supplies, lighting, eyewear and other items from approximately 1,400 active
         vendors (in the past 24 months) such as Camelbak, FLIR, Hunter Defense Technologies, L-3 Communications, Oakley and
         SureFire. Most of the products we distribute require regular replacement due to wear and tear and technological
         advancements. We combine the distribution of our products with our value-added supply chain management services, which
         include kitting and assembly, custom sourcing, training, product research and development and quality assurance and quality
         management systems. Our flexible operating model allows us to maintain an asset-light, low-inventory, scalable business.
         For example, for the year ended December 31, 2010, approximately 51% of our net sales were from orders shipped directly
         from the vendor.

             Many of our dedicated and knowledgeable 166-person sales force are former military personnel who understand the
         changing nature of 21st century security threats and the mission requirements of our customers. The members of our sales
         force utilize their first-hand understanding of our customers‟ needs and requirements and the products we offer to help our
         customers select the best available products and supply chain management services for their needs. The members of our
         sales force then draw on their training in and experience with the government procurement process to execute these
         purchases through our comprehensive portfolio of contractual procurement vehicles.

             We seek to be a critical partner to each of our customers and vendors. Our value proposition is driven by the combination
         of three key factors:

              •     Deep-Rooted Customer Relationships. Our customers benefit from our knowledge of, and our ability to provide
                    access to, a wide variety of products and services, which we aim to deliver on time and within budget. By utilizing
                    our logistics solutions and access to our broad portfolio of contractual procurement vehicles, our customers may
                    save time and money, which generates repeat business and fosters deep relationships with our customers.

              •     Strategic Vendor Alliances. Our vendors are able to leverage our experienced sales force, product knowledge,
                    customer relationships and access to contractual procurement vehicles to drive demand for their products and reach a
                    customer base that may otherwise be difficult for them to access independently.

              •     Broad Portfolio of Contractual Procurement Vehicles. Our contractual procurement vehicles provide multiple
                    channels through which our customers can purchase, and our vendors can sell, any of the over 160,000 items we
                    offer without the need for time-consuming individual contracts or open-market bid processes. Our contractual
                    procurement vehicles give our vendors access to customers they may not independently have and enable the U.S.
                    government to realize increased procurement efficiencies.

             We believe our value proposition has allowed us to drive the growth in demand for the products and related services we
         offer while building upon the strength of our market position, as evidenced by the


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         compound annual growth rate of our net sales, net income and EBITDA from 2006 to 2010 of 61%, 84% and 80%,
         respectively.


         Our Market Opportunity

             We believe our addressable market is approximately $100 billion, of which our current market share is approximately
         1%. Our primary customers include U.S. government agencies whose funds come from, among other sources, the
         Readiness & Support portion of the Operation & Maintenance budget, which is allocated from the larger Department of
         Defense base budget. According to information contained in the Department of Defense Fiscal Year 2011 Budget Request
         and annual budget press releases from the Department of Defense, the Operations & Maintenance base budget and the
         Department of Defense base budget have grown at approximately the same compound annual growth rate of 6% from 2005
         to 2010. According to the Department of Defense‟s 2011 budget projections, from 2011 through 2015, the Operations &
         Maintenance budget‟s share of the total Department of Defense base budget is expected to increase, with an expected
         compound annual growth rate of approximately 5%, compared to 3% for the Department of Defense base budget. We
         believe the Operation & Maintenance budget is stable and growing because it funds ongoing military readiness and training
         and thus is not driven by active and ongoing conflicts.

             The need for our capabilities and services developed over the last decade, when rapid changes in technology, equipment
         and security threats drove the U.S. government to shift away from standardized products and equipment built to government
         specifications, towards readily available, commercial off-the-shelf products and equipment. Over the same period, the
         Department of Defense has enabled increased procurement authority at the unit level by providing increased access to
         flexible contractual procurement vehicles. The increasing variety of missions, both of conventional forces as well as special
         operations forces, has encouraged commanders to utilize their discretionary budgets to acquire more specialized equipment.

             Further, the consumable nature of the products our customers buy from us drives reliable and consistent demand. Our
         customers subject these products to steady wear and tear, necessitating regular replacement. Constant technological
         innovations also force new developments, rendering current products obsolete and generating demand for new and advanced
         products.

             Concurrently with the shift in approach to procurement, the needs of the U.S. military and the nature of modern warfare
         have also changed. The demands of recent engagements have shifted the Department of Defense‟s focus away from
         developing large-scale weapons platforms for use in conflicts with other major world powers and towards equipping
         personnel to engage in ground-based, irregular warfare against asymmetric threats. In addition, the role of the U.S. military
         is expanding beyond the scope of its traditional national defense function. We believe that the following trends will increase
         the demand for our tactical and operational equipment and value-added supply chain management services:

              •     Continuous Commitment to Operational Readiness and Troop Modernization. To maintain a constant state of
                    operational readiness, the recently implemented Army Force Generation model rotates units between three levels of
                    deployment readiness—preparation, eligible, and available. The model ensures that approximately one-third of
                    active-duty units and one-sixth of reserve units are available to deploy each year, regardless of whether the United
                    States is at war. As new units rotate into each level of readiness, they are issued new and modernized equipment,
                    creating a continuous need for tactical and operational equipment.

              •     Broader Array of Mission Objectives. Increasingly, the branches of the U.S. military are called upon to undertake
                    missions beyond the scope of their traditional national defense functions, such as assistance with disaster relief,
                    border patrol and nation-building. These non-traditional missions, especially disaster relief, demand sustained
                    operational readiness because they arise unexpectedly in response to natural or manmade disasters, such as the
                    earthquake in Haiti in January 2010 or the recent earthquake and tsunami in Japan. Each of these added functions
                    requires the use of new and different tactical and operational equipment.


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              •     Need for Tightly Integrated and Specialized Equipment. The Department of Defense is focused on ensuring that
                    each soldier is properly equipped with state-of-the art equipment. To increase the effectiveness and safety of
                    soldiers, the Department of Defense has increased its average spend-per-soldier on equipment from approximately
                    $2,000 per soldier during World War II to approximately $19,000 during the Global War on Terror (2001-2008)
                    (adjusted to 2009 dollars based on the consumer price index). This trend is expected to continue, as the Department
                    of Defense projects that the amount spent on equipment per soldier will increase substantially in the future.

              •     Need for Increased Manpower to Counter Asymmetrical Threats. The threat of simultaneous, irregular conflicts
                    requires significant numbers of trained and properly equipped troops ready to deploy on short notice. To counter
                    these threats the U.S. Army and Special Forces have grown their troop levels since 2005. As of September 2009, the
                    estimated total U.S. military troop levels increased to more than two million people, of which approximately 10%
                    were deployed on active missions. We expect that growth to continue upon approval of the 2011 budget, as
                    evidenced by the 2011 proposed budget.

              •     Increasing Importance of Expeditionary Warfare Units. The structure of the U.S. Army was reorganized in 2004
                    from divisions into expeditionary warfare units, called Brigade Combat Teams, to increase its effectiveness. The
                    U.S. Navy and the U.S. Air Force also currently have similar expeditionary warfare units. Expeditionary warfare
                    units are mobile and self-sufficient, operate away from established bases and are able to deploy quickly. Maintaining
                    an expeditionary warfare unit‟s high level of mobility, operational readiness, and self-sustainability requires a
                    significant amount of tactical and operational equipment that is frequently updated and replaced.

             As these trends continue, we believe the market opportunity for the products and related services we offer will continue
         to expand. As the U.S. military continues to decentralize its approach to procurement and increase the amount of the overall
         defense budget allocated to tactical and operational equipment for each soldier, we believe we can continue to expand our
         sales over time, notwithstanding fluctuations in military spending.

         Our Competitive Strengths

             We believe we have an attractive and proven business model that allows us to connect a fragmented base of vendors and
         a decentralized group of approximately 4,000 active customers (in the past 24 months), effectively providing our customers
         an outsourced solution for their equipment needs. We have leveraged the over 160,000 items we offer, our value-added
         supply chain management services, our experienced sales force and our broad portfolio of contractual procurement vehicles
         to drive our recent growth, as evidenced by the compound annual growth rate in our net sales of 61% from 2006 to 2010.

             The following competitive strengths differentiate us from our competitors and are critical to our continued success:

              •     Deep-Rooted Customer Relationships. We aim to be a one-stop-shop for our customers‟ tactical and operational
                    equipment needs by streamlining the procurement process and providing value-added supply chain management
                    services. As a result of our knowledge, experience, value-added services and excellent customer service, many of
                    our customers have come to depend on us to manage the procurement process for them and to introduce them to new
                    products and provide insight as to those products best-suited to their particular needs. We believe that our ability to
                    establish, sustain and grow these relationships would be difficult and expensive for any one competitor to replicate.

              •     Value-Added Supply Chain Solutions. We are able to effectively manage and coordinate a fragmented supply chain
                    to provide complete and timely delivery of products to our customers at attractive prices. We tailor our services to
                    provide efficient and compelling solutions to meet our customers‟ needs and requirements. We have enhanced our
                    customer relationships by reducing complexities and increasing efficiencies in their procurement processes, which
                    we believe makes us a critical partner to our customers.

              •     Scalable Infrastructure. In recent years, we have made key strategic investments in both personnel and
                    infrastructure to build a scalable business that can support continued rapid growth. Our recent


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                    investment in scalable infrastructure and operations, such as Oracle Enterprise Resource Planning, gives us the
                    capacity to build upon our past performance with minimal future capital expenditures. Our Special Operational
                    Logistics & Visibility Solution, or “SOLVS,” system provides our customers with advanced supply chain
                    technology, ensuring that we are able to meet their needs in the best manner available. As a result of our asset-light
                    operating model, we generate significant free cash flow and have relatively low capital expenditures and working
                    capital requirements. For example, for the year ended December 31, 2010, approximately 51% of our net sales were
                    from orders shipped directly from the vendor.

              •     Extensive Vendor Relationships and Preferred Vendor Program. We are the primary avenue into the government
                    sales channel for many of our vendors as a result of our familiarity with the complexities of government
                    procurement and our access to customers in U.S. government agencies. As a result, new vendors seek to establish
                    relationships with us, allowing us to continue to expand the breadth of products we offer, which is critical to our
                    customer base. In response to this dynamic, we developed a preferred vendor program to further enhance certain
                    vendor relationships, while allowing us to benefit from preferential terms and support. Our vendors seek to grow the
                    amount of business they do with us because of our ability to increase their sales, provide them with insightful
                    customer product feedback and facilitate new product introductions, and we are able to competitively bid on
                    opportunities as a result of the preferential terms and support we receive from our preferred vendors.

              •     Broad Portfolio of Contractual Procurement Vehicles. Our access to a broad portfolio of contractual procurement
                    vehicles makes the sale and procurement process easier and faster for both our customers and our vendors. We use
                    the term “contractual procurement vehicle” to refer to a type of government contract that is awarded to a limited
                    number of suppliers, authorizing those suppliers to compete for specific purchase orders from different government
                    entities. Contractual procurement vehicles do not commit the government to buy a set amount of goods or services,
                    but instead, allow the supplier to sell certain goods or services to the government under the particular contract it
                    holds. Because we have already qualified for a number of contracts, we are able to quickly and easily bring
                    incremental supply online by utilizing multiple vendors to meet demand. Our extensive contract portfolio facilitates
                    the procurement process, providing a strong incentive for customers and vendors to utilize us as one of their leading
                    partners. Obtaining the type of contractual procurement vehicles used by our customers requires a demonstrated
                    track record of past performance, which makes our contract portfolio difficult to replicate.

              •     Experienced Sales Force. A substantial portion of our sales personnel has extensive military experience. Our sales
                    representatives‟ experience and understanding of our customers is enhanced by their deep product knowledge,
                    expertise with contractual procurement vehicles and broad access to products and vendors. Their comprehensive
                    capabilities, including the valuable feedback regarding products they are able to provide to both customers and
                    vendors, and their ability to identify suitable contractual procurement vehicles, enhance our key relationships while
                    ensuring superior customer service. The ability of our sales force to recommend and provide the appropriate product
                    while identifying and offering suitable contractual procurement vehicles is difficult and costly to replicate.

              •     Dedicated and Capable Management Team. With substantial operational experience and functional knowledge,
                    our senior management team has successfully led the formation and development of our business model. Our senior
                    leadership has been together since 2004 and overseen significant growth in our net sales and EBITDA. In addition,
                    our Chief Executive Officer and Chief Operating Officer are among our largest stockholders, beneficially owning
                    common stock representing an aggregate of 75% of our outstanding equity as of December 31, 2010 and % of our
                    outstanding equity giving pro forma effect to this offering, respectively.


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         Our Growth Strategy

             We strive to meet the constantly changing needs of our customers by providing them with access to the commercial
         off-the-shelf products best suited to their specific needs and combining them with our innovative, value-added supply chain
         management services. Key elements of our growth strategy include:

              •     Further Penetrate our Primary Customer Base. Our primary customer base is fragmented and characterized by a
                    decentralized procurement process. Our sales force currently calls on only a small percentage of the purchasing
                    decision makers at both the program and unit levels of the U.S. military. We expect to increase sales to our existing
                    customers and add new customers within our primary customer base using the following key growth strategies:

                      •   Continue to Expand our Sales Force. Our ability to penetrate our existing customer base is directly
                          correlated to the size of our sales force. Once a member of our sales force calls upon a particular military unit,
                          we typically have won business from that battalion or unit. To further increase our level of penetration, we
                          intend to expand the size of our sales force. In 2010, we increased the overall size of our sales force by
                          48 representatives, representing a 41% increase from 2009 fiscal year end. With additional sales
                          representatives, we believe we can replicate our prior unit-level successes in those currently underserved units.

                      •   Expand our Product Offerings. We continue to expand the breadth of our product offerings as we strive to
                          meet the constantly changing needs of our customers. For example, we recently introduced medical products;
                          tools; maintenance, repair and operations products; and expeditionary equipment, such as tents. Our sales
                          force provides our customers with valuable product knowledge while continuously evaluating our customers‟
                          needs in order to design solutions to meet those needs and drive demand for the products and related services
                          we offer. We then work directly with our vendor partners to increase the breadth and quality of our available
                          product lines specifically based on our customers‟ needs. This approach is designed to ensure that we offer the
                          latest and best available commercial off-the-shelf products. We believe that our business model provides us
                          the opportunity to easily expand our product offerings to include additional operational items needed by our
                          existing customers.

                      •   Increase Demand for our Value-Added Supply Chain Solutions. We intend to further develop and drive
                          demand for our customer-centric, value-added supply chain solutions and to focus on expanding our kitting
                          and assembly and large integration programs. Our solutions, such as integrated kits containing all of the
                          necessary equipment for a particular mission, increase the readiness and effectiveness of our customers. We
                          believe the significant operational benefits that our customers realize through these solutions will increase
                          demand for the products and related services we offer.

              •     Increase the Number, Size and Scope of our Contractual Procurement Vehicles. In order to enhance the flexibility
                    provided by our existing portfolio of contractual procurement vehicles, we will continue to compete strategically for
                    new contractual procurement vehicles. We are actively pursuing a number of opportunities to obtain contract
                    vehicles that are currently in the development stage, which we believe will supplement and enhance our existing
                    portfolio of contractual procurement vehicles and increase the breadth of our product offerings. We also intend to
                    continue to pursue large-scale system integration programs, including custom-sourcing solutions similar to our GEN
                    III and FREE programs.

              •     Add New Categories of Customers Outside of our Traditional Markets. We have achieved a leading position within
                    our customer base by prioritizing customer service and striving to deliver the best available value to every customer.
                    We believe that we are well positioned to forge new relationships by targeting potential customers that we do not
                    currently serve or who are not yet material to our operations, including the Department of Homeland Security and
                    other federal agencies. Furthermore, we believe there are opportunities to provide the products and related services
                    we offer in the U.S.-assisted equipping of allied foreign militaries and security services.


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              •     Pursue Selected Acquisitions. We may supplement our organic growth by pursuing selected acquisitions aimed at
                    augmenting our contractual procurement vehicle portfolio, broadening and diversifying our customer base,
                    expanding our product offerings and vendor network or increasing our geographic presence.


         Supply Chain Management Services

             We drive supply chain efficiencies by consistently and critically monitoring the procurement process for areas of
         improvement. The result is a lower cost solution with greater flexibility and faster delivery times. We ship our products
         primarily through third parties, with approximately 51% of our net sales from orders shipped directly from the vendor. As a
         result of our supply chain expertise, we are often selected to serve as the lead integrator on large integration programs, with
         full decision-making authority over the entire supply chain, including selection and management of the vendors that provide
         each component product. Our logistics solutions address every aspect of the supply chain, including sourcing, distribution,
         shipment tracking and on-time delivery.

             The order flow chart below illustrates the operational efficiency we provide through our supply chain management
         services:




             We have developed a comprehensive suite of value-added supply chain management services that streamline our
         customers‟ procurement processes. We integrate these services into the products we distribute to provide efficient and
         compelling solutions tailored to the unique needs of our customers.

         Kitting and assembly

             We leverage the extensive knowledge of our sales force and our broad product offerings to design customized,
         field-ready kits comprised of multiple, hand-selected products that are best suited for the specific operations of our
         end-users. This process, which we refer to as kitting, simplifies the procurement process by allowing our customers to source
         many products simultaneously from us, rather than from numerous separate manufacturers using multiple individual
         purchase orders. We have an experienced team of kitting and assembly experts that ship kits quickly upon receipt of the
         component parts, which results in minimal inventory balances. The value proposition of our kitting and assembly solution
         has fostered strong demand from our customers.

             An example of one of our kits is the Escalation of Force Kit, which we developed in partnership with the Rapid
         Equipping Force of the U.S. Army. The Escalation of Force Kit consists of items, such as a voice response translator and
         portable speed bumps, that are utilized at vehicle checkpoints at home and abroad.

         Custom sourcing solutions

             In conjunction with our preferred vendors, we manage the process to produce textile-based products, including apparel,
         load bearing systems and sleep systems, such as sleeping bags, liners and inflatable mattresses. These customized solutions
         allow us to meet customer specifications in order to improve existing products and develop new products that are otherwise
         unavailable. Our services include prototype design and sourcing of raw materials, including yarns and fabrics, and we
         partner with our vendors to assemble the pieces into finished products. We manage the entire design and third-party
         manufacturing process to produce high quality textile-based products efficiently, resulting in improved margins and product
         lead time for our customers.


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         Training and product education

             The equipment we sell is often technically advanced and requires significant training, testing and evaluation to ensure its
         effectiveness and safe application. We routinely evaluate our vendors‟ training programs and then arrange personalized
         training sessions between our customers and those vendors whose training approach we find most effective. We also
         coordinate personalized product education sessions, whereby a customer can learn about a particular product from a vendor
         prior to purchase. These training and information sessions help to reduce the man-hours and expense required for equipment
         selection. We also produce our own training aids, such as videos and visual user guides, that assist our customers with the
         proper use and maximum effectiveness of the equipment they purchase.

         Product research and development

             Our subject matter experts and research and development personnel routinely test the suitability of new products for our
         customers‟ needs and mission requirements. We are able to provide product improvement suggestions to our vendors based
         on the results of these tests and based on feedback from customers. Both our customers and our vendors seek our expertise
         and advice in determining equipment requirements and new product recommendations.

         Quality assurance and quality management system

             The quality of the products we deliver is critical to the safety and effectiveness of our end users and the success of our
         customers. Our quality assurance team is dedicated to performing ongoing quality control auditing and vendor evaluation.
         We continually solicit feedback from our customers regarding the products and related services we offer and strive to find
         ways to ensure that they receive the highest quality commercial off-the-shelf products available. We measure the
         performance of our vendors using a Supplier Performance Report Card, which provides us with a quantitative and consistent
         process to measure vendor performance. We regularly update our vendors on their performance and suggest improvements
         as appropriate. We became ISO-9001:2008 registered in June 2010. ISO 9001:2008 is an internationally recognized quality
         management system preferred by the U.S. government that focuses on assuring that an organization will meet and exceed its
         customer‟s needs. Besides conforming to U.S. government preferences, we believe the quality standards are procedures we
         implement to maintain our ISO registration give us a competitive advantage, improve our customer service, streamline
         operations and lower costs.

         Web-based supply chain management solution

             As a supplement to our extensive Oracle Enterprise Resource Planning software, we have developed our SOLVS
         software. SOLVS is a secure, web-based logistics solution that enables our customers to track equipment inventory,
         including acquisition dates, costs and quantities, as well as monitor the distribution process at both the individual soldier and
         unit level. SOLVS allows the customer to design, customize and manage the acquisition and distribution process to their
         specific needs. By providing visibility into inventory levels and the supply chain process (including replacement cycles), our
         customers are able to efficiently forecast and fund their tactical and operational equipment requirements.

         Products

             We offer our customers access to over 160,000 product stock-keeping units, or “SKUs,” covering a broad spectrum of
         tactical and operational equipment. The products we offer are commercial off-the-shelf, branded products that we often
         obtain directly from the manufacturer. Representative categories of products we offer include apparel, expeditionary
         equipment, optical equipment, communications equipment, emergency medical supplies, lighting, eyewear and other items
         from vendors such as Camelbak, FLIR, Hunter


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         Defense Technologies, L-3 Communications, Oakley and SureFire. Our key product categories for the year ended
         December 31, 2010 are presented below:


         Key Product Categories:              Representative Products:
         Apparel                              Clothing systems, inner and outer layers, uniforms, headwear, gloves, belts and vests
         Expeditionary Equipment              Shelters, heating and cooling systems, generators, expeditionary tents and sleeping bags
         Optical Equipment                    Binoculars and rangefinders, designators and illuminators, night and thermal vision and
                                              sights and scopes
         Lighting                             Headlamps, flashlights, weapon lights, tactical beacons, safety lights and shelter lights
         Eyewear                              Ballistic goggles, eye shields, sunglasses, safety glasses and cleaning accessories

             The products we distribute tend to be consumable and require regular replacement. They are generally utilized in rugged
         environments, subjecting them to additional wear and tear, and they often quickly become obsolete due to innovations in
         technology and changing mission needs. In order to meet the ongoing need for sustainment and replacement of the types of
         products we offer, we routinely test the suitability of new products for our customers‟ needs and mission requirements.

         Customers

             We consider each purchasing decision maker within the Department of Defense, the Department of Homeland Security
         and other domestic and foreign government agencies to be a separate customer. Most of our approximately 4,000 active
         customers (in the past 24 months) are representatives of the Department of Defense purchasing goods and services for use by
         military personnel in their training, peacetime operations and missions at home and abroad. We also serve the Department of
         Homeland Security and other domestic and foreign government agencies. The purchasing authority within our customer base
         is diffuse and decentralized. We also sell products to private corporations, most of whom are defense contractors. For the
         year ended December 31, 2010, our three largest customers were the U.S. Army‟s Natick Soldier Systems Center, United
         States Army Research, Development and Engineering Command, and the Defense Supply Center Philadelphia, which
         generated approximately 24%, 8% and 6% of our sales, respectively.

             We believe our commitment to achieving superior customer service and the military experience of our sales force
         enables us to serve as a meaningful and value-added partner to our customers through all phases of the product acquisition
         cycle. As a trusted partner to our customers, we serve an integral role in their product selection process and receive insights
         into future program requirements. This provides us the opportunity to relay valuable feedback to our vendors.

         Vendors

              We have extensive relationships with a fragmented base of approximately 1,400 active vendors (in the past 24 months)
         of tactical and operational equipment. Our deep customer relationships and broad portfolio of contracts allow us to increase
         sales volumes for smaller vendors and typically enable us to streamline operations and drive demand for larger vendors.
         Through our vendors, we offer a wide range of over 160,000 SKUs to our customers, including protective eyewear from
         ESS/Oakley, laser scopes from Insight Technology, hydration systems from Camelbak, tools from Danaher, knives and
         rescue hooks from Benchmade and nylon equipment from London Bridge Trading Company. Given the fragmented nature
         of our vendor base, no one vendor represented more than 11% of our net sales in fiscal 2010 and our top ten vendors
         accounted for approximately 52% of our net sales in that year. Our top ten vendors typically change from year to year as the
         specific product needs of our customers change. We are typically not contractually required to supply specific branded
         products to our customers, which decreases our reliance on any particular vendor. We are able to select secondary and
         tertiary vendors for many of the product categories we provide, allowing us to quickly and easily bring incremental supply
         online or replace the primary vendor if necessary.


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             For many of our vendors, we are their primary avenue into the government sales channel. We are an integral component
         of many of our vendors‟ corporate strategies because they can leverage our contractual procurement vehicles, experienced
         sales force, extensive customer relationships, marketing programs and product knowledge to reach customers that would
         otherwise be difficult for them to access independently. As the government continues to transition its procurement process,
         favoring the use of commercial off-the-shelf products, our vendors benefit from being a part of our one-stop supply chain
         solution.

             To enhance these extensive relationships, we have developed a preferred vendor program with approximately 300
         vendors as of December 31, 2010, up from 172 as of December 31, 2008. Before a company can qualify as a preferred
         vendor, we verify the quality of its products and establish stringent on-time delivery standards. We incentivize our sales
         force to sell our preferred vendors‟ products and, in exchange, we receive preferential terms and support. Our preferred
         vendors benefit by partnering with us on joint sales calls and in the production of tradeshows. In 2010, approximately 90%
         of our net sales came from products sourced through our preferred vendor program.

         Sales and Marketing

             Our dedicated and knowledgeable 166-person sales force, many of whom are former military personnel, understands the
         changing nature of 21st century security threats and the corresponding impact on our customers. Our sales force possesses
         knowledge of and experience with the government procurement process, which enables them to recommend to our
         customers both those products that are best suited to their needs and those procurement vehicles that will best facilitate their
         purchases. By calling on individual units, members of our multi-channel sales force are able to continue serving their former
         colleagues in a critical new capacity. This drives both program sales, which facilitate multi-unit purchases, and unit sales,
         which are individual end-user or unit-level customer purchases. Under many of our contracts, we have to compete for
         specific purchase orders. In order to create demand and generate purchase orders, our sales force calls on and educates our
         customers about the specific products we offer.

             Our ability to penetrate our existing customer base is directly correlated to the size of our sales force. In the military units
         for whom we do have a sales representative, we have often been able to win substantial business. In 2010, we increased the
         overall size of our sales force by 48 sales representatives, in order to further penetrate our customer base. Our training
         program provides hands-on training on the contractual procurement vehicles to which we have access and the tactical and
         operational equipment that we offer.

            Our commitment to achieving superior customer service is one of our core competencies. From the highest level of
         management to our sales support personnel, we maintain a presence with our customers through regular in-person visits to
         ensure that their needs are fulfilled. Comprehensive customer support is provided 24 hours per day, seven days per week.

             Our marketing organization creates a direct link between our vendors and our customers by facilitating the flow of
         information between these two groups. We utilize a variety of tools to facilitate this information flow, including Warrior
         Expo, tradeshows and promotional materials such as catalogs, brochures and advertisements in major military publications.

             Warrior Expo

             Warrior Expo is a private tradeshow that we host in Virginia Beach and which is timed to capture the spending increase
         ahead of the U.S. government‟s September 30 fiscal year-end. We believe Warrior Expo is one of the most recognized
         tradeshows in the industry focusing on tactical and operational equipment for U.S. government agencies and we have
         structured it as a high profile, invitation-only event that is free for military, federal, state and local agency customers, as well
         as for our preferred vendors. It allows customers from all major bases and territories to preview the latest tactical and
         operational equipment from our preferred vendors. In 2010, more than 1,400 customers and 190 vendors attended Warrior
         Expo. This has become one of our most successful marketing tools, with the event expanding to offer breakout sessions in
         which we and vendor experts educate customers on procurement, inventory management, training, and state-of-the-art
         product technology and innovation. In 2010, we started hosting an annual West Coast-based Warrior Expo in San Diego in
         the spring.


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             Regional Tradeshows

             We host regional tradeshows at customer sites to strengthen our customer and vendor relationships. These trade shows
         allow customers to evaluate products at their own sites, while providing vendors with customer access they would be unable
         to achieve independently. They also allow us to be involved with the initial determination of our customers‟ future
         equipment needs.

             Industry Tradeshows

            We also attend other industry tradeshows, during which we showcase the latest equipment and technology from our
         vendors. We maintained a highly visible presence at 64 industry tradeshows in 2010. Representative shows include the
         Association of the U.S. Army show, the Shooting, Hunting, Outdoor Tradeshow, the General Services Administration Expo
         and the Special Operations Forces Industry Conference show.

             Catalogs

             We distribute catalogs of our products to showcase the large selection of tactical and operational equipment we offer,
         reinforcing our position as a single-source provider for our customers‟ tactical and operational equipment needs. We
         typically utilize advertisements within our catalogs to co-brand a preferred vendor‟s product, particularly when we believe
         there is market demand for such products. Our catalogs are an effective marketing tool within our customer base and help to
         foster high brand awareness for us and our vendors. While also making our catalogs available online, in 2010, we distributed
         approximately 238,500 catalogs to existing and new customers.

         Competition

             Our competitors include original equipment manufacturers who sell directly to our customers and specialty distributors
         who operate on a much smaller scale. Depending on a particular contract‟s requirements, sometimes we compete with
         vendors with whom we have partnered in pursuit of other opportunities. To a certain extent, we believe the U.S. government
         itself can be viewed as our largest competitor, because it internally sources and provides the tactical and operational
         equipment and logistics solutions to those units within our customer base that we have not penetrated. However, we have
         become a critical partner to large purchasing organizations within the government, such as DLA, by enabling them to
         outsource a significant portion of their procurement supply chain to us. We believe that by managing the purchasing,
         warehousing and distribution elements of the procurement supply chain for these purchasing organizations, we are an
         integral part of the U.S. government‟s procurement process.

            Customers using our various contractual procurement vehicles can also procure equipment through the traditional
         government procurement process. Competition is based on the price, scope and availability of product offerings, the depth,
         breadth and reliability of logistics and distribution capabilities, the quality and suitability of products offered and the ease of
         procurement.

         Contractual Procurement Vehicles

             Our broad and dispersed customer base procures products and services on behalf of individual military personnel. If all
         renewal options are exercised, as of December 31, 2010, we have access to approximately $10.4 billion in aggregate
         available contract capacity, of which approximately $500 million expires prior to 2012. In addition, if all renewal options are
         exercised, three of our contractual procurement vehicles have unlimited contract capacity through 2019.

             We primarily sell the products and related services we offer from vendors or distributors to the U.S. government using
         three different types of IDIQ contracts.

             Our IDIQ contract vehicles permit our customers in the U.S. military and other federal agencies to make purchases from
         us on an as-needed basis from time to time, on pre-established terms and conditions. Our sales force generates demand for
         products and services using IDIQ contracts by providing our customers access to the most appropriate contract. Under these
         IDIQ contracts, products and services are sold at fixed prices that are established at the time a customer order is made (or at
         the time the contract is entered into


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         under some of our single-award program sales contracts, as described below). There are generally three different types of
         IDIQ contracts: multiple-award contracts, single-award contracts and federal supply schedules. We are able to drive demand
         for the products we sell through all types of IDIQ contracts.

             Multiple-award IDIQ contracts are awarded to a limited number of pre-approved suppliers and have ceiling limitations
         on the total amount of government funds that can be used through the procurement vehicle. The award of particular purchase
         orders under those contracts require a second competitive bidding process among that limited number of suppliers (which
         typically occurs within one day to a week upon submission of a bid). Our Spec Ops TLS contract is an example of a
         multiple-award IDIQ contract.

             Single-award IDIQ contracts function very much like multiple-award IDIQ contracts. However, they are awarded to a
         sole-supplier and often cover a much narrower breadth of products. The particular agency and customers who wish to make
         purchases under a single-award IDIQ contract commit to a pre-approved sole supplier for the equipment and services to be
         provided through that contract. Our single-award IDIQ contract vehicles, such as our GEN III contract, are often entered into
         with a program office within a particular branch of the U.S. military to provide a standardized suite of products that are
         intended for a broad cross-section of forces in that particular military branch. Through these single-award IDIQ contracts, we
         commit to fulfill any orders received for goods and services identified in those contracts over a period of time, up to
         pre-determined volume limitations at fixed-prices established at the time the contract is awarded.

              Our federal supply schedules, such as our GSA supply schedules, provide all federal government agencies access to a
         vast selection of commercial off-the-shelf products, allowing the agencies to purchase items identified on the schedules from
         a list of pre-approved suppliers at pre-determined maximum prices. The products and their prices are listed on the schedules,
         and may be updated at least three times per year, on or after the first 12 months of the contract period. Most GSA supply
         schedules have an initial five-year period with three potential five-year renewal options and, similar to other IDIQ contracts,
         the customer is not committed to purchase any set volume. Unlike multiple award IDIQ contracts, federal supply schedules
         do not typically require a second round of bidding to secure a purchase order and do not have ceiling limitations on the total
         amount of government funds that can be spent through the procurement vehicle. Under our federal supply schedules, we may
         be the only pre-approved supplier for a particular product, while for other products there are multiple pre-approved suppliers,
         including, in some cases, our vendors.

             In addition, we utilize commercial contracts with certain defense contractors. While these are not contractual
         procurement vehicles in our portfolio, they are another channel through which we effect sales of the products and related
         services we offer.

         Employees

             As of December 31, 2010, we had approximately 420 employees. Our employee base reflects alumni from all branches
         of the military, including enlisted personnel, officers and active reservists. Our employees have operational experience with
         the U.S. Navy SEALS, U.S. Army Special Forces, U.S. Marine Corps, U.S. Air Force, U.S. Coast Guard and U.S. Marshals.
         Our employees are not represented by labor unions. We consider our employee relations to be good.

         Environmental

             Our operations are subject to federal, state and local health, safety and environmental laws and regulations, which,
         among other matters, regulate the discharge of pollutants into the environment and the use, handling, generation, emission,
         release, discharge, transportation, clean up, treatment, storage and disposal of, and exposure to, materials, substances and
         wastes. Management is not aware of any prior or ongoing environmental issues that are likely to result in a material cost or
         liability to the company.

         Backlog

            At December 31, 2010, our backlog was $442.1 million. At December 31, 2009, our backlog was $382.8 million. We
         expect that substantially all of our December 31, 2010 backlog will be recognized as net sales prior to December 31, 2011.

            We define backlog as funded orders we have received that we have not yet delivered. Funded orders are those for which
         funding currently is appropriated and allocated to the contract by the purchasing agency or unit or


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         otherwise authorized for payment by the customer upon receipt of specified products. The receipt and timing of future net
         sales is subject to various contingencies, many of which are beyond our control. The actual recognition of revenue on sales
         included in backlog may never occur or may change because a sale could be canceled, a contract could be modified or
         canceled or products ordered may no longer be available. In the event of a government contract cancellation, we receive
         actual expenses incurred, plus approved profit. We believe that period-to-period comparisons of backlog are not necessarily
         indicative of future net sales that we may receive.

         Properties

             Our headquarters are located in Virginia Beach, Virginia, where we own approximately 82,250 square feet of office
         space. We lease three commercial facilities and own two commercial facilities used in connection with the various services
         rendered to our customers. Upon expiration of our leases, we do not anticipate any difficulty in obtaining renewals or
         alternative space. See “Certain Relationships and Related Party Transactions.”

            We believe that substantially all of our property and equipment are in good condition, subject to normal wear and tear,
         and that our facilities have sufficient capacity to meet the current and projected needs of our business.

             Our headquarters and material facilities as of December 31, 2010 are shown in the following table:

         Location                                        Use                          Square Feet                      Owned/Leased


         Virginia Beach, VA                  Corporate Headquarters                     82,250                            Owned (1)
         Virginia Beach, VA                  Main Warehouse                             34,596                            Leased
         Virginia Beach, VA                  Kitting Facility                           80,000                            Owned (2)
         San Diego, CA                       West Coast Warehouse                       24,000                            Leased
         Pennsauken, NJ                      Office and Warehouse                       40,000                            Leased


           (1) Our corporate headquarters are owned by Tactical Office, LLC, a related entity under common ownership that is
               consolidated with ADS in our historical financial statements. See “Certain Relationships and Related Party
               Transactions.”
           (2) Our kitting facility is owned by Tactical Warehouse, LLC, a related entity under common ownership that is
               consolidated with ADS in our historical financial statements. See “Certain Relationships and Related Party
               Transactions.”

         Governmental Regulations

             We are heavily regulated in most of the fields in which we operate. We provide services and products to numerous U.S.
         government agencies and entities, including all of the branches of the U.S. military and the Department of Homeland
         Security. When working with these and other U.S. government agencies and entities, we must comply with laws and
         regulations relating to the formation, administration and performance of U.S. government contracts. Among other things,
         these laws and regulations:

              •     mandate compliance with socio-economic rules, the distribution of costs to contracts and non-reimbursement of
                    certain costs such as lobbying expenses;

              •     require reviews by the Defense Contract Audit Agency and other U.S. government agencies of compliance with
                    government accounting standards and management of internal control systems;

              •     restrict the use and dissemination of information classified for national security purposes and the exportation of
                    certain products and technical data;

              •     require us not to compete for or to divest of work if an organizational conflict of interest, as defined by these laws
                    and regulations, related to such work exists and/or cannot be appropriately mitigated; and

              •     may require us to disclose contract or legal compliance issues to the contracting officer and/or agency inspector
                    general.
    The U.S. government may revise its procurement practices or adopt new contract rules and regulations at any time. In
order to help ensure compliance with these complex laws and regulations, all of our employees are required to complete
ethics training and other compliance training relevant to their position.

    U.S. government contracts are, by their terms, subject to termination by the U.S. government either for its convenience
or default by the contractor. Our U.S. government contracts are also conditioned upon


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         Department of Defense approval of the amount of necessary spending. Congress usually appropriates funds to procuring
         agencies, which then allocate funds for a given program or contract on a September 30 fiscal year basis, even though
         contract periods of performance may extend over many years.

             Internationally, we are subject to special U.S. government laws and regulations, local government regulations and
         procurement policies and practices (including regulations relating to bribery of foreign officials, import-export control,
         investments, exchange controls and repatriation of earnings) and varying currency, political and economic risks.

             We are subject to the applicable export control laws and regulations of the United States and other countries. U.S. laws
         and regulations that apply to us include: the Arms Export Control Act and ITAR promulgated thereunder; EAR; and the
         trade sanctions laws and regulations administered by OFAC.

             As part of our ongoing export controls compliance program, we retained an outside consulting firm, FD Associates, Inc.,
         in April 2009 to conduct an audit of our export compliance practices and procedures. In response to the preliminary audit
         results, which identified several potential violations of the ITAR, we retained FD Associates to expand the scope of the audit
         and to assist us in implementing FD Associates‟ recommended enhancements to our export controls compliance program,
         including conducting training of relevant company personnel. We also submitted an initial voluntary self-disclosure of past
         ITAR violations to the U.S. State Department‟s Directorate of Defense Trade Controls in accordance with 22 C.F.R. §
         127.12(c).

             Specifically, on October 6, 2009, we filed a voluntary self-disclosure of past ITAR violations with the Enforcement
         Division of the Directorate of Defense Trade Controls, or DDTC. This voluntary self-disclosure related to overseas
         shipments of 3,256 line items of ITAR-controlled products without authorization by the Department of State, as required by
         the ITAR. The shipments involved the export of ITAR-controlled equipment and did not include the transfer of any technical
         data or defense services. We identified the reason for the self-disclosed violations and our inadvertent failure to comply with
         ITAR as a lack of product classification and a mistaken belief that the export of ITAR-controlled products shipments to and
         in support of U.S. government operations overseas did not require an export license. We have since implemented policies
         and procedures designed to prevent future violations and ensure future compliance with ITAR. On October 13, 2009, the
         Chief of the Enforcement Division of the DDTC informed us that, while it determined that violations under ITAR had
         occurred and that the matter could be reopened in the future if circumstances warranted, the case was closed and no further
         action would be taken. In connection with some of the transactions listed in this voluntary self-disclosure, on July 29, 2009,
         we received a subpoena from the U.S. Customs Service requesting information on five past exports in which we were listed
         as the exporter-of-record. We cooperated fully and provided all responsive documents to the Customs Service.

             On November 16, 2009, we filed a separate voluntary self-disclosure of past EAR violations with the Office of Export
         Enforcement, U.S. Department of Commerce. This voluntary self-disclosure related to overseas shipments of 36 line items
         of EAR-controlled products without authorization by the Department of Commerce, as required by the EAR. The shipments
         involved the export of tactical and operational equipment and did not include the transfer of any EAR-controlled technology.
         We identified the reason for our failure to comply with the EAR as the lack of product classification and erroneous failure to
         recognize the application of the EAR to shipments of certain products in support of the U.S. government operations
         overseas. We have since implemented policies and procedures designed to prevent future violations and ensure future
         compliance with the EAR. As of the date hereof, we have not received a response from the Department of Commerce
         relating to this voluntary self-disclosure.

             On November 30, 2010, we filed a voluntary self-disclosure with the Enforcement Division of the DDTC relating to two
         incidents that may have required authorization under ITAR. First, while we obtained an export license for the shipment of
         certain defense articles to Unit 30401 of the U.S. European Command in Germany, our freight forwarder inadvertently
         delivered the items to a different unit of the U.S. European Command in a different German location than was listed under
         the terms of the license. Second, we recently determined that one of our employees carried certain defense articles, which
         were his personal property, to Afghanistan when he traveled there on business for us. These items were exported without our
         knowledge or authorization, and have been returned to the United States and are in the possession of the ADS employee. On
         December 9, 2010, the Chief of the Enforcement Division of the DDTC informed us that, while it


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         determined that violations under ITAR had occurred, the case was closed and no further action would be taken.

             On February 17, 2011, we filed a preliminary notice of voluntary self-disclosure with the Enforcement Division of the
         DDTC relating to two incidents that may have required authorization under ITAR. First, while we obtained export licenses
         for two different shipments of certain defense articles destined for Iraq and Colombia, prior to shipment, the shipping label
         for the package destined for Iraq and the package destined for Colombia were inadvertently switched. We confirmed that
         both U.S. customers are in possession of the erroneously delivered packages and we have arranged for the return of the items
         to the United States. We have submitted two replacement licenses to DDTC to facilitate the exporting of the requested
         articles to the correct U.S. government customers. The second incident relates to the shipment of 50 pallets of defense
         articles from the United States to Bagram, Afghanistan via Doha, Qatar, pursuant to an export license. Each of the 50 pallets
         arrived in Doha, but only 49 pallets were accounted for in Bagram. We immediately placed a worldwide trace on the missing
         pallet and are working diligently to locate it. As required under the ITAR regulations, we will submit our final voluntary
         self-disclosure report on or before April 29, 2011.

         Legal Proceedings

             From time to time we are also involved in legal proceedings arising in the ordinary course of business. While the
         ultimate liability that could result from these matters cannot be determined presently, we believe that, in the aggregate, they
         will not result in liabilities that are material to our financial condition, results of operations, or cash flows. Our contracts with
         the U.S. government are subject to various legal and regulatory requirements and, from time to time, agencies of the U.S.
         government may investigate the conduct of our operations in accordance with these requirements. U.S. government
         investigations of us, whether related to our federal government contracts or conducted for other reasons, could result in
         administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed upon us, or could lead to
         suspension or debarment from future U.S. government contracting.


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                                                               MANAGEMENT

             The following table provides information regarding our executive officers and directors upon consummation of this
         offering. With respect to our directors, each biography contains information regarding the person‟s service as a director,
         business experience, director positions held currently or in the past, information regarding involvement in certain legal or
         administrative proceedings, and the experience, qualifications, attributes or skills that caused our board of directors to
         determine that the person should serve as a director of the company.


         Name                                      Age      Position(s)



         Luke Hillier                              39       Chief Executive Officer, President, Director

         Daniel Clarkson                           40       Chief Operating Officer, Vice President, Treasurer, Secretary, Director

         Patricia Bohlen                           51       Chief Financial Officer

         Jason Wallace                             40       Vice President of Sales and Marketing

         Bruce Dressel                             46       Vice President of Product and Equipment Solutions

         R. Scott LaRose                           43       Director

         William A. Roper, Jr.                     64       Director

             Luke Hillier has served as Chairman of our board of directors since 2000 and as our Chief Executive Officer since 2004.
         In 1999, Mr. Hillier co-founded Mythics, Inc., an Oracle-based information system solutions provider, and concurrently
         served as Chief Executive Officer of Mythics until 2004. Prior to founding Mythics, Mr. Hillier served as a lead sales
         representative in the State and Local Government sales division of the Oracle Corporation, where he was awarded the Sales
         Representative of the Year for Government-DMD. Mr. Hillier started his career in the Outstanding Scholars program in
         Acquisition Management for Naval Air Systems Command in the U.S. Federal Government. Mr. Hillier‟s extensive
         experience with the process of government contracting and significant entrepreneurial and management experience has
         proven invaluable to our board of directors.

             Daniel Clarkson has served as our Chief Operating Officer and as a member of our board of directors since 2002. Prior
         to serving at ADS, Mr. Clarkson served as Regional Manager for Sunbelt Rentals, an equipment rental company based in
         South Carolina and owned by U.K.-based Ashtead Group, from 2000 to 2002. Mr. Clarkson started his career in sales and as
         Profit Center Manager for Sunbelt Rentals. As a result of his extensive experience and leadership with the company as we
         have grown over the past nine years, Mr. Clarkson has significant institutional knowledge with respect to our management
         and operations.

             Patricia Bohlen has served as Chief Financial Officer since 2004. She oversees the company‟s accounting, treasury and
         strategic financial planning functions. Prior to joining ADS, from 2002 to 2004, Mrs. Bohlen was the Chief Financial Officer
         of PowerPact LLC and the Chief Financial Officer of Fresh Picks, Inc. from 1996 to 2002. Mrs. Bohlen worked for Cadmus
         Communications from 1993 to 1996, first as Director of Accounting and then as Controller. Mrs. Bohlen began her career as
         an auditor for KPMG LLP.

             Jason Wallace has served as our Vice President of Sales and Marketing since 2006 and is responsible for managing our
         sales team. Prior to that, Mr. Wallace served as our Vice President of Inside Sales and Vendor Relations from 2004 until
         2006. Prior to joining ADS, from 1996 to 2004, Mr. Wallace served as the Vice President of Sales and Operations for
         Sunbelt Rentals, where he managed a large sales force and managed more than twenty stores.

             Bruce Dressel is our Vice President of Product and Equipment Solutions. He has been with ADS since 2004. He
         oversees our Vendor Relations Team and our Product Category Management teams. Prior to joining ADS, Mr. Dressel
         served as the President and CEO of Sunbelt Rentals, a multi-location service business, from February 1997 until July 2003.
         Prior to that, he served as the Vice President of Operation for
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         Sunbelt Rentals from February 1996 until January 1997. Mr. Dressel spent the first 12 years of his business career building a
         privately held service business that was acquired by Sunbelt Rentals in 1996.

             R. Scott LaRose has served as a member of our board of directors since 2002. Mr. LaRose has also served as Chairman
         of the Board of Agilex Technologies, Inc. since 2009. From 2004 to 2009, Mr. LaRose served as the President and Chief
         Executive Officer of Mythics, Inc., which Mr. LaRose co-founded with Mr. Hillier in 2000. Prior to serving at Mythics,
         Mr. LaRose served as the regional manager of the state and local government division at Oracle Corporation. Mr. LaRose
         has unique insights into our business as a result of his experience with the process of government contracting. As a result of
         the various leadership positions he has held throughout his career, Mr. LaRose brings a strong strategic vision to our board
         of directors.

             William A. Roper, Jr. has served as a member of our board of directors since February 2011. Since 2008, Mr. Roper has
         served as president of Roper Capital Company, a privately-owned equity firm. Prior to forming Roper Capital, Mr. Roper
         served as president and chief executive officer of VeriSign, Inc. from May 2007 to June 2008, and as a member of
         VeriSign‟s board of directors from November 2003 to June 2008. From April 2000 to May 2007, Mr. Roper served as an
         executive vice president of Science Applications International Corporation (SAIC), and as senior vice president and chief
         financial officer of SAIC from 1990 to 2000. Mr. Roper serves as a member of the boards of directors of Internet Content
         Management, Inc., Leap Wireless International, Inc., Regents Bank, N.A. and SkinMedica, Inc. Mr. Roper‟s current and
         former board memberships at other public and private companies provide him with extensive corporate governance
         knowledge and his experience as a former chief financial officer of a public company provides him with expertise in the area
         of corporate accounting and finance. Mr. Roper holds a B.A. in mathematics from the University of Mississippi.


         Controlled Company Exception

             Following the consummation of this offering our existing stockholders, as a group, will continue to control a majority of
         our outstanding common stock and voting power, which means we will be a “controlled” company within the meaning of the
         rules of the New York Stock Exchange. As a result, we are not required to have a majority of independent directors on our
         board of directors or have compensation and nominating/corporate governance committees comprised of independent
         directors. We are required, however, to have an audit committee with one independent director during the 90-day period
         beginning on the date of effectiveness of the registration statement filed with the SEC in connection with this offering and of
         which this prospectus is a part. After such 90-day period and until one year from the date of effectiveness of the registration
         statement, we are required to have a majority of independent directors on our audit committee. Thereafter, we are required to
         have an audit committee comprised entirely of independent directors.


         Committees of Our Board of Directors

              Audit Committee. Upon consummation of this offering, the audit committee will consist of              ,      , and  (of
         whom           and         have been deemed independent pursuant to Rule 10A-3 of the Exchange Act by our board of
         directors) and          will be nominated as chair of the audit committee. The duties and responsibilities of the audit
         committee will include recommending the appointment or termination of the engagement of independent accountants,
         overseeing the independent auditor relationship and reviewing significant accounting policies and controls. We intend to
         appoint additional independent directors to our audit committee to replace          as soon as possible following the
         consummation of this offering, but no later than one year after the consummation of this offering. We have determined
         that        satisfies the New York Stock Exchange standard of possessing accounting or related financial management
         expertise and qualifies as an independent audit committee financial expert under the Exchange Act.

              The charter of the audit committee will be available on our website.

              Compensation Committee. Upon consummation of this offering, the compensation committee will consist
         of      ,     , and    . The duties and responsibilities of the compensation committee


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         will include reviewing and approving the compensation of officers and directors, except that the compensation of officers
         serving on any committee is determined by our board of directors. The compensation of all officers other than our chief
         executive officer, Luke Hillier, is approved by our board of directors based on recommendations by Mr. Hillier and the
         compensation committee. Mr. Hillier‟s compensation is determined by our board of directors upon the recommendation of
         the compensation committee.

             The charter of our compensation committee will be available on our website.

             Nominating and Corporate Governance Committee. Upon consummation of this offering, the nominating and corporate
         governance committee will consist of         ,       , and      . The duties of the nominating and corporate governance
         committee will include identifying individuals qualified to become members of our board of directors, consistent with
         criteria approved by our board of directors; overseeing the organization of our board of directors to discharge the board‟s
         duties and responsibilities properly and efficiently; identifying best practices and recommending corporate governance
         principles, including giving proper attention and making effective responses to stockholder concerns regarding corporate
         governance; and developing and recommending to our board of directors a set of corporate governance guidelines and
         principles applicable to us. We expect other specific duties of the nominating and corporate governance committee to
         include: annually assessing the size and composition of our board of directors; developing membership qualifications for our
         board committees; monitoring compliance with board and board committee membership criteria; annually reviewing and
         recommending directors for continued service; coordinating and assisting management and our board in recruiting new
         members to our board of directors; reviewing governance-related stockholder proposals and recommending board responses;
         and overseeing the evaluation of our board of directors and management.


         Board Structure

             Our board of directors is currently comprised of           directors. Upon consummation of this offering, our board of
         directors will be divided into three classes, each of whose members will serve for staggered three-year
         terms.        and        will serve in the class of directors whose terms will expire at our 2011 annual
         meeting;         and        will serve in the class of directors whose terms will expire at our 2012 annual meeting;
         and       ,        and        will serve in the class of directors whose terms will expire at our 2013 annual meeting. Because
         only one-third of our directors are elected at each annual meeting, two annual meetings of stockholders could be required for
         the stockholders to change a majority of the board.


         Compensation Committee Interlocks and Insider Participation

            None of our executive officers serves, or in the past has served, as a member of the board of directors or compensation
         committee of any entity that has one or more executive officers who serve on our board of directors or compensation
         committee.


         Code of Ethics

             In connection with this offering, our board of directors will adopt a code of ethics that applies to all of our directors,
         officers and employees, including our chief executive officer and chief financial officer. The code addresses, among other
         things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure
         requirements under the federal securities laws, confidentiality, trading on insider information and reporting of violations to
         the code. Once adopted, the code of ethics will be available on our website.


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                                              COMPENSATION DISCUSSION AND ANALYSIS

             The following discussion and analysis of compensation arrangements of our named executive officers for fiscal year
         2010 (as set forth in the Summary Compensation Table below) should be read together with the compensation tables and
         related disclosures set forth below. This discussion contains forward-looking statements that are based on our current plans,
         considerations, expectations and determinations regarding future compensation programs. Actual compensation programs
         that we adopt may differ materially from the currently planned programs summarized in this discussion.


         Named Executive Officers

            Our named executive officers for the fiscal year ended December 31, 2010 were: Luke Hillier, our Chief Executive
         Officer; Patricia Bohlen, our Chief Financial Officer; Daniel Clarkson, our Chief Operating Officer; Bruce Dressel, our Vice
         President of Acquisitions; and Jason Wallace, our Vice President of Sales. Following December 31, 2010, Mr. Dressel‟s title
         was revised to be Vice President of Product and Equipment Solutions and Mr. Wallace‟s title was revised to be Vice
         President of Sales and Marketing.


         Executive Compensation Philosophy and Objectives

            Our philosophy is that executive compensation should be competitive in the marketplace in which we compete for
         executive talent, but structured to emphasize incentive-based compensation and determined by the achievement of both
         company and individual performance objectives. In principle, we believe that:

              •     our compensation programs should be simple, straightforward and clear;

              •     a significant portion of executive compensation should be based on variable compensation programs measured on a
                    quarterly, annual or longer-term basis;

              •     variable compensation, including bonuses and commissions, should be tied to the achievement of predetermined
                    company-wide and individual performance goals, and should create appropriate rewards for superior performance
                    and penalties for under-performance;

              •     our compensation programs should be flexible and able to evolve with our business;

              •     our compensation programs should be designed to attract, motivate and retain exceptional executives in the markets
                    in which we operate; and

              •     following the completion of this offering, equity-based compensation awards should be utilized to encourage an
                    ownership mentality by our executives and to align the interests of our executives with our stockholders.


         Elements of 2010 Executive Compensation

             Our 2010 compensation program for our named executive officers consisted of the following key elements: an annual
         base salary, quarterly achievement bonuses, a performance-based annual bonus, commissions for our sales personnel
         (including one of our named executive officers, Jason Wallace, our Vice President of Sales), and certain perquisites and
         other benefits, including employer-paid health and welfare plan premiums and employer matching contributions to tax
         qualified retirement plans. In keeping with our philosophy of the importance of simplicity and clarity in compensation
         programs, we did not maintain any non-qualified deferred compensation programs, supplemental retirement programs or
         defined benefit pension plans that cover our named executive officers and we do not anticipate maintaining any such plans or
         programs following the completion of this offering. Historically, all of the incentive compensation payable to our named
         executive officers has been payable in cash based upon the achievement of predetermined performance goals. We believe
         that this approach has best served the interests of our company and the holders of our equity interests by enabling us to meet
         the requirements of the highly competitive environment in which we operate, while ensuring that our named executive
         officers were compensated in a way that advanced both the short-term and long-term interests of our equity holders. We
         have historically been structured as a subchapter S corporation, which has prevented us from granting equity-
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         based compensation awards to any of our named executive officers. The variable quarterly and annual bonuses permitted
         recognition of individual performance and were based, in significant part, on an evaluation of the contribution made by the
         named executive officer to our overall performance.

            In 2010, our board of directors determined the amount and form of compensation for Luke Hillier and Daniel Clarkson.
         The amount and form of each element of our other named executive officers‟ compensation for 2010 was determined by
         Mr. Hillier and Mr. Clarkson.

             2010 Base Salary. We determined base salaries for our named executive officers based on their position level and our
         evaluation of the appropriate amount of base salary required to attract and retain executive talent in the markets in which we
         operate, taking into account our philosophy that total compensation should be weighted less towards fixed compensation and
         more towards variable performance-based compensation. Historically, we have not “benchmarked” our named executive
         officers‟ base salaries against any defined peer group of companies.

             2010 Incentive Compensation. For fiscal year 2010, each of Patricia Bohlen, Bruce Dressel and Jason Wallace was
         eligible to receive quarterly achievement bonuses based on completion of specific strategic goals as determined by our board
         of directors in advance of each quarter, as described below, as well as a year-end profitability bonus based on the Company‟s
         achievement of specified profitability targets and such named executive officer‟s aggregate quarterly performance levels, as
         described below. Messrs. Hillier and Clarkson were not eligible to receive quarterly achievement bonuses and year-end
         profitability bonuses in 2010. Additionally, one named executive officer, Jason Wallace, was eligible to receive sales
         commissions in fiscal year 2010, as described below.

             Quarterly Achievement Bonuses. For fiscal year 2010, each of Patricia Bohlen, Bruce Dressel and Jason Wallace was
         eligible to receive quarterly achievement bonuses. The quarterly achievement goals were not based on corporate
         performance, but rather were based on the attainment of goals related to the officer‟s individual performance and the
         performance of his or her direct reports during each fiscal quarter during 2010. Each of Ms. Bohlen and Messrs. Dressel and
         Wallace achieved 100% of his or her performance goals for each quarter in 2010 and thus received the full amount of his or
         her target quarterly achievement bonus in each quarter.

             Year-End Profitability Bonuses. For fiscal year 2010, in the event that Atlantic Diving Supply, Inc. attained a specified
         profitability target, each of Patricia Bohlen, Bruce Dressel and Jason Wallace was eligible to receive a year-end bonus. If the
         profitability target was not achieved for 2010, no year-end bonus would have been paid. For fiscal year 2010, this target
         profitability was $91.4 million and Atlantic Diving Supply, Inc.‟s actual profitability, as calculated for bonus purposes in
         December 2010, was $92.3 million. Thus, the 2010 profitability target was achieved and the year-end bonuses were paid.
         The amount of the year-end bonus for each of Ms. Bohlen and Messrs. Dressel and Wallace was determined by multiplying
         the amount of the year-end bonus that would have been paid based on Atlantic Diving Supply, Inc.‟s 2010 profitability by
         the aggregate percentage of all quarterly achievement bonuses received by the executive during the year. Since each of
         Ms. Bohlen and Messrs. Dressel and Wallace achieved 100% of his or her performance goals for each quarter in 2010, he or
         she received 100% of the amount of the year-end bonus he or she was entitled to receive based on Atlantic Diving Supply,
         Inc.‟s 2010 profitability. For purposes of determining 2010 year-end profitability bonuses, profitability was equal to Atlantic
         Diving Supply, Inc.‟s gross profit less its total expenses (other than depreciation, profitability bonuses, Domestic
         International Sales Corporation, or DISC, and transaction expenses).

            Commissions. For fiscal year 2010, Jason Wallace, our Vice President of Sales, was eligible to receive sales
         commissions equal to 0.124% of our overall gross margin, with a commission target of $195,920 based on our target gross
         margin of $158.0 million. No other named executive officer was eligible to receive sales commissions in fiscal year 2010.

            The amount of quarterly achievement bonuses and year-end profitability bonuses received by each of Ms. Bohlen,
         Mr. Dressel and Mr. Wallace and the amount of commissions received by Mr. Wallace are set


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         forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table under “Executive
         Compensation — Summary Compensation Table.”

            No 2010 Equity Awards. We have historically been structured as a subchapter S corporation and have not granted
         equity-based compensation awards to any of our named executive officers.

             2010 Perquisites and Other Benefits. Our named executive officers are generally eligible to participate in the same
         benefit plans provided to our other salaried employees, including health and welfare plans. In fiscal year 2010, we paid the
         full cost of the medical plan premiums on behalf of our named executive officers, and our named executive officers were
         entitled to participate in and received employer contributions to our 401(k) plan. We paid for a car or provided a car
         allowance to each of our named executive officers. In addition, we have historically provided supplementary executive
         perquisites to each of our founders and principal owners, including Luke Hillier and Daniel Clarkson, as described in greater
         detail in the Summary Compensation Table and the footnotes thereto.


         New Compensation Programs in Connection with this Offering

         Adoption of Annual Bonus Plan and Equity Award Incentive Plan

             We intend to adopt the Equity Plan and the Executive Bonus Plan in connection with this offering. For a description of
         these new compensation plans, see “Executive Compensation Plans” below. The purpose of these new plans will be to allow
         us to pay annual bonuses (including annual performance-based bonuses) to our named executive officers and other senior
         executives and to make various equity-based compensation awards to our named executive officers and other employees,
         consultants and directors in a manner that is appropriate for a public company and that is intended to allow us to make
         awards that are not subject to the federal income tax deduction limitation set forth in Section 162(m) of the Internal Revenue
         Code. See “— Effect of Accounting and Tax Treatment on Compensation Decisions.”


         Claw-Back Policy

             We intend to include provisions in our Executive Bonus Plan and our Equity Plan that will provide us with the discretion
         after this offering to impose the forfeiture of bonuses and equity compensation and the recovery of bonus amounts and gains
         from equity compensation awarded under those plans with respect to individuals who engage in misconduct or gross
         negligence that results in a restatement of our financial statements or as otherwise required under applicable laws or
         regulations. In addition, if an individual engages in certain other misconduct, we intend to provide for the discretion to
         suspend vesting of all or a portion of any award and/or require the forfeiture or disgorgement to us of any equity award
         (including gains on the sale of the stock, if any) that vested, was paid or settled in the twelve months prior to or any time
         after the individual engaged in such misconduct.


         Policies on Timing of Equity Grants

             We expect that following the completion of this offering it will be our policy not to time the granting of equity awards in
         relation to the release of material, non-public information. Accordingly, we expect that regularly scheduled awards will be
         permitted to be granted at times when there is material non-public information. We expect that we will generally grant
         awards to new-hires at the time of hire, promotion awards at the time of promotion and annual awards at a specified time or
         during a specified period each year. In addition, we expect that it will be our policy not to grant equity awards with effect
         from, or with an exercise price based on market conditions as they existed on, any date prior to the date on which the party in
         which granting authority is vested takes formal action to grant them. We further expect that it will be our policy to promptly
         document any equity awards that we make; we would normally regard documenting to be prompt if we were to communicate
         the terms of the awards to their recipients, and to obtain signed award agreements governing the grants back from them (or
         other electronic confirmation of such awards), within one month of the date formal action is taken to issue them.


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         Owner-Employee Employment Agreements

            In connection with this offering, we intend to enter into employment agreements with each of Luke Hillier and Daniel
         Clarkson, our two current equity owners who are also named executive officers. For a description of the compensation of our
         owners who are named executive officers, see “Executive Compensation — Owner-Employee Compensation.”


         Adoption of Non-Employee Director Compensation Policy

             We intend to adopt a non-employee director compensation policy in connection with this offering. For a description of
         this new policy, see “— Director Compensation — Director Compensation Policies.”


         Effect of Accounting and Tax Treatment on Compensation Decisions

             Section 162(m) of the Internal Revenue Code imposes a limit on the amount of compensation that we may deduct in any
         one year with respect to certain “covered employees,” unless certain specific and detailed criteria are satisfied.
         Performance-based compensation, as defined in the Internal Revenue Code, is fully deductible if the programs are approved
         by stockholders and meet other requirements. Pursuant to applicable regulations, Section 162(m) will not apply to
         compensation paid or stock options or restricted stock granted under the compensation agreements and plans in existence
         prior to the completion of this offering during the reliance transition period ending on the earlier of the date the agreement or
         plan is materially modified or the first stockholders meeting at which directors are elected during 2015. While we will
         continue to monitor our compensation programs in light of Section 162(m), the compensation committee considers it
         important to retain the flexibility to design compensation programs that are in the best long-term interests of our company
         and our stockholders, particularly as we continue our transition from a private to a public company. As a result, we have not
         adopted a policy requiring that all compensation be deductible and the compensation committee may conclude that paying
         compensation at levels that are not deductible under Section 162(m) is nevertheless in the best interests of our company and
         our stockholders.

             Other provisions of the Internal Revenue Code can also affect compensation decisions. Section 409A of the Internal
         Revenue Code, which governs the form and timing of payment of deferred compensation, imposes sanctions, including a
         20% penalty and an interest penalty, on the recipient of deferred compensation that does not comply with Section 409A. The
         compensation committee will take into account the implications of Section 409A in determining the form and timing of
         compensation awarded to our executives and will strive to structure any nonqualified deferred compensation plans or
         arrangements to be exempt from or to comply with the requirements of Section 409A.

             Section 280G of the Internal Revenue Code disallows a company‟s tax deduction for payments received by certain
         individuals in connection with a change in control to the extent that the payments exceed an amount approximately three
         times their average annual compensation, and Section 4999 of the Internal Revenue Code imposes a 20% excise tax on those
         payments. The compensation committee will take into account the implications of Section 280G in determining potential
         payments to be made to our executives in connection with a change in control. Nevertheless, to the extent that certain
         payments upon a change in control are classified as excess parachute payments, such payments may not be deductible
         pursuant to Section 280G.


         Transaction Bonuses

             In connection with the offering of our senior secured notes and this offering, certain members of senior management are
         eligible to receive transaction bonuses in recognition of services and contributions to the value of the company. In a majority
         of cases, two-thirds of each individual‟s transaction bonus was paid upon consummation of the senior secured notes offering,
         with the remainder to be paid upon the earlier of (x) the consummation of this offering and (y) December 31, 2011, subject
         to each individual‟s continued employment through such payment date. The aggregate amount of all transaction bonuses is
         $9.0 million, of which approximately $6.6 million was paid upon consummation of the senior secured notes offering. See
         “Executive compensation — Employment agreements.”


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                                                      EXECUTIVE COMPENSATION

             The tables listed below, which appear in the following sections of this report, provide information required by the SEC
         regarding the compensation we paid for the year ended December 31, 2010 to our named executive officers. Except as noted
         below, we have used captions and headings in these tables in accordance with the SEC regulations requiring these
         disclosures. The footnotes to these tables provide important information to explain the values presented in the tables and are
         an important part of our disclosures related to our executive compensation for the year ended December 31, 2010.


         Summary Compensation Table

            The following table sets forth information regarding compensation earned by our named executive officers for the year
         ended December 31, 2010:


                                                       Summary Compensation Table


                                                                                 Non-Equity
                                                                                Incentive Plan         All Other
                                                               Salary           Compensation         Compensation            Total
         Name and
         Principal
         Position                                                ($)                 ($)                  ($)                 ($)


         Luke Hillier, Chief
           Executive Officer
           and President                                       500,000                     —              51,318 (1)        551,318
         Patricia Bohlen, Chief
           Financial Officer                                   186,186            148,965                 22,823 (2)        357,974
         Daniel Clarkson, Chief
           Operating Officer,
           Secretary and
           Treasurer                                           400,000                     —              73,540 (3)        473,540
         Bruce Dressel, Vice
           President of
           Acquisitions (4)                                    315,000            218,960                 48,538 (5)        582,498
         Jason Wallace, Vice
           President of Sales (6)                              254,100            419,714 (7)             24,349 (8)        698,163


           (1) This number reflects perquisites and other compensation provided to Mr. Hillier, including: medical plan premium
               payments; health and fitness expenses; 401(k) matching contributions; life/LTD insurance premiums; personal use of a
               company-leased automobile and other automobile-related expenses; and country club dues. None of the individual
               perquisites had an incremental cost in excess of the greater of $25,000 or 10% of the total amount of Mr. Hillier‟s
               perquisites.

           (2) This number reflects perquisites and other compensation provided to Ms. Bohlen, including: medical plan premium
               payments; 401(k) matching contributions; life/LTD insurance premiums; and an automobile allowance. None of the
               individual perquisites had an incremental cost in excess of the greater of $25,000 or 10% of the total amount of
               Ms. Bohlen‟s perquisites.

           (3) This number reflects perquisites and other compensation provided to Mr. Clarkson, including: medical plan premium
               payments; health and fitness expenses; 401(k) matching contributions; life/LTD insurance premiums; personal use of a
               company-owned automobile and other automobile-related expenses; and country club dues. The aggregate incremental
               cost of Mr. Clarkson‟s personal use of a company-owned automobile and other automobile-related expenses was
               $25,483. None of the other individual perquisites had an incremental cost in excess of the greater of $25,000 or 10%
               of the total amount of Mr. Clarkson‟s perquisites.

           (4) Following December 31, 2010, Mr. Dressel‟s title was revised to be Vice President of Product and Equipment
    Solutions.

(5) This number reflects perquisites and other compensation provided to Mr. Dressel, including: 401(k) matching
    contributions; life/LTD insurance premiums; personal use of a company leased automobile;


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                personal use of company aircraft; and per diem payments for nights spent in Virginia Beach. The aggregate
                incremental cost of Mr. Dressel‟s personal use of company aircraft was $25,014. None of the other individual
                perquisites had an incremental cost in excess of the greater of $25,000 or 10% of the total amount of Mr. Dressel‟s
                perquisites.

           (6) Following December 31, 2010, Mr. Wallace‟s title was revised to be Vice President of Sales and Marketing.

           (7) This number reflects Mr. Wallace‟s 2010 performance bonuses of $231,931 and the actual commissions of $187,783
               earned by Mr. Wallace for fiscal year 2010.

           (8) This number reflects perquisites and other compensation provided to Mr. Wallace, including: health and welfare
               premiums; 401(k) matching contributions; life/LTD insurance premiums; and personal use of a company-leased
               automobile. None of the individual perquisites had an incremental cost in excess of the greater of $25,000 or 10% of
               the total amount of Mr. Wallace‟s perquisites.


         2010 Grants of Plan-Based Awards Table


                                                                                                      Estimated Future Payouts
                                                                                                          Under Non-Equity
                                                                                                      Incentive Plan Awards (1)
                                                                                                                                  Ma
                                                                                                 Threshold          Target         x
         Nam                                                                        Grant
         e                                                    Type of Award         Date            ($)               ($)         ($)


         Luke Hillier                                             —                     —                 —               —           —
         Patricia Bohlen                                  Performance Bonus             n/a               —          148,965          —
         Daniel Clarkson                                          —                     —                 —               —           —
         Bruce Dressel                                    Performance Bonus             n/a               —          218,960          —
         Jason Wallace                                    Performance Bonus             n/a               —          231,931          —
                                                          Commission                    n/a               —          195,920          —


           (1) Amounts in this column for Performance Bonus awards represent the target cash bonus amounts for 2010 under our
               quarterly achievement bonus plan and year-end profitability bonus plan. Amounts in this column for Commission
               awards represent the target cash commissions for 2010 under our annual commission plan. The foregoing plans are
               described more fully in “Compensation Discussion and Analysis — Elements of Executive Compensation” above.
               Performance bonus awards and commission awards have no minimum threshold or maximum cap on payouts. Actual
               bonuses and commissions paid under the plans for fiscal year 2010 are reflected in the Summary Compensation Table.


         Owner-Employee Compensation

            We have not entered into employment agreements with either of Luke Hillier and Daniel Clarkson, our two current
         equity owners who are also named executive officers. Owner compensation is generally reviewed annually in 2010 and
         consisted of base salary and certain perquisites and other personal benefits, as described above in the Summary
         Compensation Table and related footnotes. In addition to compensation received as executive officers, each of our
         owner-employees received distributions in his capacity as a stockholder of the company in 2010. See “Dividend Policy.” In
         connection with this offering, we intend to enter into employment agreements with each of Luke Hillier and Daniel
         Clarkson.


         Employment Agreements

            Patricia Bohlen. Effective January 1, 2010, we entered into a 2010 Executive Compensation Plan with Patricia Bohlen,
         pursuant to which Ms. Bohlen was eligible to receive an annual base salary of $186,186, quarterly achievement bonuses of
         $11,250 per quarter and a year-end profitability bonus of $103,965. In addition, the 2010 Executive Compensation Plan
         provided Ms. Bohlen a monthly car allowance of $650.
   Bruce Dressel. Effective August 1, 2008, we entered into an employment agreement with Bruce Dressel, pursuant to
which Mr. Dressel receives an annual base salary and bonus, to be agreed upon by us and


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         Mr. Dressel from year to year. In addition, Mr. Dressel‟s employment agreement entitles him to an automobile for business
         use, along with accompanying insurance and maintenance at our expense.

              Mr. Dressel‟s employment agreement provides that, upon a “Sale of the Company” (as defined below) for a purchase
         price of at least $100,000,000, we will pay Mr. Dressel a bonus equal to 0.5% of the purchase price and we will extend his
         employment agreement for a two-year term from the date of such sale. For these purposes, a “Sale of the Company” will
         occur if either (i) any person or persons or entity or entities (other than family members or family trusts) who do not
         presently own stock in the Company acquire ownership of fifty one percent (51%) or more of the company‟s stock or
         (ii) such persons or entities acquire fifty one (51%) or more of the total gross fair market value of the company‟s assets,
         during the term of Mr. Dressel‟s employment. This offering will not be a “Sale of the Company” for purposes of
         Mr. Dressel‟s employment agreement.

              In the event of Mr. Dressel‟s termination of employment by us without “Cause” or by him for “Good Reason” (each such
         term as defined below) within two years after the date of a Sale of the Company, Mr. Dressel will be entitled to receive a
         cash amount equal to 200% of his total compensation for the year preceding the date of termination, payable over the
         24-month period following his termination, subject to Mr. Dressel‟s continued compliance with the restrictive covenants in
         his employment agreement. For these purposes, (i) “Cause” shall mean: (a) Mr. Dressel shall have been indicted for a felony;
         (b) Mr. Dressel shall have been convicted of (or pleaded “guilty” or “nolo contendre” to or shall have been found guilty of)
         any misdemeanor or summary offense involving fraud, theft, misrepresentation or moral turpitude or any other misdemeanor
         or summary offense that will, in the opinion of the chief executive officer, determined in good faith, adversely affect in any
         material respect the company‟s prospects or reputation or Mr. Dressel‟s ability to perform his obligations or duties to the
         company; or (c) Mr. Dressel intentionally and continually shall have failed substantially to perform his reasonably assigned
         duties with the company (other than a failure resulting from Mr. Dressel‟s incapacity due to physical or mental illness or
         from the assignment to Mr. Dressel of duties that would constitute Good Reason), which failure has continued for a period of
         at least 30 days after a written notice of demand for substantial performance, signed by a duly authorized member of the
         company, has been delivered to Mr. Dressel; (d) willfully or repeatedly engaged in misconduct or gross negligence in the
         performance of his duties to the company that has a material detrimental effect on the company; (e) committed an act of
         fraud, theft, or dishonestly against the company or any act or omission intended to result in the personal enrichment of
         Mr. Dressel or a relative in violation of his duty of loyalty to the company at the expense, directly or indirectly, of the
         company; or (f) violates the non-compete provisions within Mr. Dressel‟s employment agreement, and (ii) “Good Reason”
         shall mean the occurrence of any of the following events without Mr. Dressel‟s consent: (a) assignment to Mr. Dressel of
         any duties inconsistent in any material respect with Mr. Dressel‟s position (including titles and reporting relationships),
         authority or responsibilities as contemplated by Mr. Dressel‟s employment agreement; (b) any material failure by the
         company to comply with any of the material provisions regarding Mr. Dressel‟s salary, bonus, benefits and amounts payable
         to Mr. Dressel under his employment agreement; or (c) the relocation or transfer of the Mr. Dressel‟s principal office outside
         a 20 mile radius of the Mr. Dressel‟s personal residence location.

             Under his employment agreement, Mr. Dressel is subject to non-disclosure and non-disparagement obligations in
         perpetuity, as well as certain non-competition and non-solicitation obligations during the term of his employment and during
         the two-year period and one-year period, respectively, following the termination of his employment for any reason.

            Effective January 1, 2010, we entered into a 2010 Executive Compensation Plan with Mr. Dressel, pursuant to which
         Mr. Dressel was eligible to receive an annual base salary of $315,000, quarterly achievement bonuses of $16,250 per quarter
         and a year-end profitability bonus of $153,960, as described above.

            Jason Wallace. Effective January 1, 2010, and as amended on July 27, 2010 we entered into a 2010 Executive
         Compensation Plan with Jason Wallace, pursuant to which Mr. Wallace was eligible to receive an annual base salary of
         $254,100, quarterly achievement bonuses of $17,250 per quarter and a year-end profitability bonus of $162,931, and
         commissions equal to 0.124% of our company‟s overall gross margin, with a target commission for 2010 of $195,920.


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         Potential Payments upon Termination of Employment or Change in Control

             Termination Payments. Except as described below in “Change in Control Payments,” none of our named executive
         officers is entitled to receive payments in connection with any termination of employment.

             Change in Control Payments. Prior to January 1, 2011 we were party to bonus award agreements with each of Patricia
         Bohlen and Jason Wallace, pursuant to which Ms. Bohlen and Mr. Wallace would be entitled to receive 0.25% and 0.7%,
         respectively, of our “net proceeds” (as defined below) upon a change in control prior to January 1, 2011. For purposes of the
         bonus award agreements, (i) “net proceeds” is defined as the aggregate value of all cash, securities or other assets or property
         to be received by the company‟s stockholders pursuant to a Sale of the Company and with respect to their company capital
         stock (other than any balance sheet adjustment) after payment or satisfaction of (a) any company transaction costs and legal
         and brokers‟ fees and expenses incurred in connection with such Sale of the Company, (b) any indebtedness for borrowed
         money or other long term liability, (c) the value of any employment, non-compete or other agreements entered into with
         individuals in connection with the Sale of the Company, and (d) the amount of any employee incentive, retention or other
         bonuses payable in connection with a Sale of the Company; and (ii) “Sale of the Company” is defined as the consummation
         of any of the following prior to January 1, 2011: (a) a sale, disposition or other transfer of all or substantially all of the assets
         of the company to a third party unaffiliated with the company, (b) a merger or consolidation of the company with any
         unaffiliated third party, other than a merger or consolidation effected solely to change the state of incorporation of the
         company or in which the stockholders of the company immediately prior to such merger or consolidation continue to hold at
         least 51% of the voting power of the outstanding securities of the surviving entity immediately after such merger or
         consolidation, or (c) a sale to an unaffiliated third party of at least 51% of the then issued and outstanding shares of capital
         stock of the company. Assuming we had experienced a change in control as of December 31, 2010, Ms. Bohlen and
         Mr. Wallace would respectively have been entitled to receive approximately $               and $        pursuant to their bonus
         award agreements (calculated assuming that our net proceeds would have been $               , which is equal to the aggregate
         equity value of the company based on an initial offering price of $           per share, the midpoint of the price range set forth
         on the cover of this prospectus). The actual amounts that would have been received could only have been determined at the
         time of an actual change in control based on the actual net proceeds received in connection with such change in control
         which likely would have varied from the amounts provided above. The bonus award agreements terminated pursuant to their
         terms on January 1, 2011 and were not replaced. No payments will be made under these agreements.

              As described above in “Employment Agreements,” Bruce Dressel would be entitled to the payment of a bonus in
         connection with a change in control if such change in control constitutes a Sale of the Company for a purchase price of at
         least $100,000,000. Assuming we had experienced a change in control on December 31, 2010, Mr. Dressel would have been
         entitled to receive approximately (calculated assuming that our net proceeds would have been $          , which is equal to the
         aggregate equity value of the company based on an initial offering price of $         per share, the midpoint of the price range
         set forth on the cover of this prospectus). The actual amount that would have been received could only have been determined
         at the time of an actual Sale of the Company based on the actual net proceeds received in connection with such Sale of the
         Company which likely would have varied from the amount provided above. In addition, if Mr. Dressel is terminated without
         Cause or resigns for Good Reason within two years following a Sale of the Company, he would be entitled to receive certain
         severance payments during the 24 months following such termination, as described above. This offering is not a Sale of the
         Company for purposes of Mr. Dressel‟s 2010 employment agreement. On March 1, 2011, we amended and restated
         Mr. Dressel‟s employment agreement. We intend to further amend and restate Mr. Dressel‟s employment agreement in
         connection with this offering. At such time, the change of control provision relating to a Sale of the Company will be
         deleted.

             None of our other named executive officers is entitled to receive payments in connection with a change in control.


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         Executive Compensation Plans

                  2011 Equity Incentive Award Plan

             Prior to completion of the offering, we intend to adopt a 2011 Equity Incentive Award Plan, or the Equity Plan. The
         principal purpose of the Equity Plan will be to attract, retain and motivate selected employees, consultants and directors
         through the granting of stock-based compensation awards and cash-based performance bonus awards. The Equity Plan will
         also be designed to permit us to make equity-based awards and cash-based awards intended to qualify as
         “performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code.
         The principal features of the Equity Plan are summarized below.

             Share Reserve. Under the Equity Plan, shares of our common stock will initially be reserved for issuance pursuant to a
         variety of stock-based compensation awards, including stock options, stock appreciation rights, or SARs, restricted stock
         awards, restricted stock unit awards, deferred stock awards, dividend equivalent awards, stock payment awards and
         performance awards and other stock-based awards.

             The following counting provisions will be in effect for the share reserve under the Equity Plan:

              •     to the extent that an award terminates, expires or lapses for any reason or an award is settled in cash without the
                    delivery of shares, any shares subject to the award at such time will be available for future grants under the Equity
                    Plan;

              •     to the extent shares are tendered or withheld to satisfy the grant, exercise price or tax withholding obligation with
                    respect to any award under the Equity Plan, such tendered or withheld shares will be available for future grants
                    under the Equity Plan;

              •     to the extent that shares of our common stock awarded under the Equity Plan are repurchased by us prior to vesting
                    so that such shares are returned to us, such shares will be available for future grants under the Equity Plan;

              •     the payment of dividend equivalents in cash in conjunction with any outstanding awards will not be counted against
                    the shares available for issuance under the Equity Plan; and

              •     to the extent permitted by applicable law or any exchange rule, shares issued in assumption of, or in substitution for,
                    any outstanding awards of any entity acquired in any form of combination by us or any of our subsidiaries will not
                    be counted against the shares available for issuance under the Equity Plan.

             Administration. The compensation committee of our board of directors will administer the Equity Plan unless our board
         of directors assumes authority for administration. Except as otherwise determined by our board of directors, the
         compensation committee will consist of at least two members of our board of directors, each of whom will be intended to
         qualify as an “outside director,” within the meaning of Section 162(m) of the Code, a “non-employee director” for purposes
         of Rule 16b-3 under the Exchange Act and an “independent director” within the meaning of the rules of the New York Stock
         Exchange or other principal securities market on which shares of our common stock are traded. The Equity Plan will provide
         that the compensation committee may delegate its authority to grant awards to employees other than our executive officers
         and certain of our senior executives to a committee consisting of one or more members of our board of directors or one or
         more of our officers, but we expect that our compensation committee charter will prohibit such delegation in the case of
         awards to our executive officers.

            Subject to the terms and conditions of the Equity Plan, the administrator will have the authority to select the persons to
         whom awards are to be made, to determine the number of shares to be subject to awards and the terms and conditions of
         awards, and to make all other determinations and to take all other actions necessary or advisable for the administration of the
         Equity Plan. The administrator will also be authorized to adopt, amend or rescind rules relating to administration of the
         Equity Plan. Our board of directors will have the authority at all times to remove the compensation committee as the
         administrator and revest in itself the authority to administer the Equity Plan. The full board of directors will administer the
         Equity Plan with respect to awards to non-employee directors.


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             Eligibility. The Equity Plan will provide that options, SARs, restricted stock and all other stock-based and cash-based
         awards may be granted to individuals who will then be our officers, employees or consultants or the officers, employees or
         consultants of certain of our subsidiaries. The Equity Plan will further provide that such awards may also be granted to our
         directors, but that only employees of our company or certain of our subsidiaries may be granted incentive stock options, or
         ISOs.

             Awards. The Equity Plan will provide that the administrator may grant or issue stock options, SARs, restricted stock,
         restricted stock units, deferred stock, dividend equivalents, performance awards, stock payments and other stock-based and
         cash-based awards, or any combination thereof. Each award will be set forth in a separate agreement with the person
         receiving the award and will indicate the type, terms and conditions of the award.

              •     Nonqualified Stock Options , or NQSOs, will provide for the right to purchase shares of our common stock at a
                    specified price which may not be less than fair market value on the date of grant, and usually will become
                    exercisable (at the discretion of the administrator) in one or more installments after the grant date, subject to the
                    participant‟s continued employment or service with us and/or subject to the satisfaction of corporate performance
                    targets and individual performance targets established by the administrator. The Equity Plan will provide that
                    NQSOs may be granted for any term specified by the administrator that does not exceed ten years.

              •     Incentive Stock Options , or ISOs, will be designed in a manner intended to comply with the provisions of
                    Section 422 of the Code and will be subject to specified restrictions contained in the Code. Among such restrictions,
                    ISOs will have an exercise price of not less than the fair market value of a share of common stock on the date of
                    grant, will only be granted to employees, and will not be exercisable after a period of ten years measured from the
                    date of grant. In the case of an ISO granted to an individual who owns (or is deemed to own) at least 10% of the total
                    combined voting power of all classes of our capital stock, the Equity Plan will provide that the exercise price must
                    be at least 110% of the fair market value of a share of common stock on the date of grant and that the ISO must not
                    be exercisable after a period of five years measured from the date of grant.

              •     Restricted Stock will be granted to any eligible individual selected by the administrator and will be made subject to
                    such restrictions as may be determined by the administrator. Restricted stock, typically, will be forfeited for no
                    consideration or repurchased by us at the original purchase price if the conditions or restrictions on vesting are not
                    met. The Equity Plan will provide that restricted stock generally may not be sold or otherwise transferred until
                    restrictions are removed or expire. Purchasers of restricted stock, unlike recipients of options, will have voting rights
                    and will have the right to receive dividends, if any, prior to the time when the restrictions lapse; however,
                    extraordinary dividends will generally be placed in escrow, and will not be released until restrictions are removed or
                    expire.

              •     Restricted Stock Units will be awarded to any eligible individual selected by the administrator, typically without
                    payment of consideration, but subject to vesting conditions based on continued employment or service or on
                    performance criteria established by the administrator. The Equity Plan will provide that, like restricted stock,
                    restricted stock units may not be sold, or otherwise transferred or hypothecated, until vesting conditions are removed
                    or expire. Unlike restricted stock, stock underlying restricted stock units will not be issued until the restricted stock
                    units have vested, and recipients of restricted stock units generally will have no voting or dividend rights prior to the
                    time when vesting conditions are satisfied.

              •     Deferred Stock Awards will represent the right to receive shares of our common stock on a future date. The Equity
                    Plan will provide that deferred stock may not be sold or otherwise hypothecated or transferred until issued. Deferred
                    stock will not be issued until the deferred stock award has vested, and recipients of deferred stock generally will
                    have no voting or dividend rights prior to the time when the vesting conditions are satisfied and the shares are
                    issued. Deferred stock awards generally will be forfeited, and the underlying shares of deferred stock will not be
                    issued, if the applicable vesting conditions and other restrictions are not met.


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              •     Deferred Stock Units will be awarded to any eligible individual selected by the administrator, typically without
                    payment of consideration, but may be subject to vesting conditions based on continued employment or service or on
                    performance criteria established by the administrator. Each Deferred Stock Unit shall entitle the holder thereof to
                    receive one share of Common Stock on the date the Deferred Stock Unit becomes vested or upon a specified
                    settlement date thereafter. The Equity Plan will provide that, like deferred stock, deferred stock units may not be
                    sold, or otherwise transferred or hypothecated, until vesting conditions are removed or expire. Unlike deferred stock,
                    deferred stock units may provide that shares of stock underlying the deferred stock units will not be issued until a
                    specified date or event following the vesting date. Recipients of deferred stock units generally will have no voting or
                    dividend rights prior to the time when vesting conditions are satisfied and the shares underlying the award have been
                    issued to the holder.

              •     Stock Appreciation Rights , or SARs, will be granted in the administrator‟s discretion in connection with stock
                    options or other awards, or separately. SARs granted in connection with stock options or other awards typically will
                    provide for payments to the holder based upon increases in the price of our common stock over a set exercise price.
                    The exercise price of any SAR granted under the Equity Plan will be at least 100% of the fair market value of a
                    share of our common stock on the date of grant. Except as required by Section 162(m) of the Code with respect to an
                    SAR intended to qualify as performance-based compensation as described in Section 162(m) of the Code, there will
                    be no restrictions specified in the Equity Plan on the exercise of SARs or the amount of gain realizable therefrom,
                    although the Equity Plan will provide that restrictions may be imposed by the administrator in the SAR agreements.
                    SARs under the Equity Plan will be settled in cash or shares of our common stock, or in a combination of both, at
                    the election of the administrator.

              •     Dividend Equivalents will represent the value of the dividends, if any, per share paid by us, calculated with reference
                    to the number of shares covered by the award. The Equity Plan will provide that dividend equivalents may be settled
                    in cash or shares and at such times as determined by the compensation committee or board of directors, as
                    applicable.

              •     Performance Awards will be granted by the administrator in its discretion on an individual or group basis.
                    Generally, these awards will be based upon specific performance targets and will be paid in cash or in common
                    stock or in a combination of both. The Equity Plan will provide that performance awards may include “phantom”
                    stock awards that provide for payments based upon the value of our common stock and that performance awards
                    may also include bonuses that may be granted by the administrator on an individual or group basis and which may
                    be payable in cash or in common stock or in a combination of both.

              •     Stock Payments will be authorized by the administrator in its discretion in the form of common stock or an option or
                    other right to purchase common stock as part of a deferred compensation on other arrangement in lieu of all or any
                    part of compensation, including bonuses, that would otherwise be payable in cash to the employee, consultant or
                    non-employee director.

             Change in Control. In the event of a change in control where the acquiror does not assume or replace granted awards,
         prior to the consummation of such transaction, causing such awards to terminate under the Equity Plan upon consummation
         of the transaction, the Equity Plan or the individual award agreement may provide that awards issued under the Equity Plan
         will be subject to accelerated vesting such that 100% of such awards will become vested and exercisable or payable, as
         applicable, upon the consummation of such change in control. In addition, the administrator will also have complete
         discretion to structure one or more awards under the Equity Plan to provide that such awards will become vested and
         exercisable or payable on an accelerated basis in the event such awards are assumed or replaced with equivalent awards but
         the individual‟s service with us or the acquiring entity is subsequently terminated within a designated period following the
         change in control event. The Equity Plan will also provide that the administrator may make appropriate adjustments to
         awards under the Equity Plan and will be authorized to provide for the acceleration, cash-out, termination, assumption,
         substitution or conversion of such awards in the event of


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         a change in control or certain other unusual or nonrecurring events or transactions. Under the Equity Plan, a change in
         control will generally be defined as:

              •     the transfer or exchange in a single transaction or series of related transactions by our stockholders of more than
                    50% of our voting stock to a person or group;

              •     a change in the composition of our board of directors over a two-year period such that 50% or more of the members
                    of the board of directors were elected through one or more contested elections;

              •     a merger, consolidation, reorganization or business combination in which we are involved, directly or indirectly,
                    other than a merger, consolidation, reorganization or business combination which results in our outstanding voting
                    securities immediately before the transaction continuing to represent a majority of the voting power of the acquiring
                    company‟s outstanding voting securities and after which no person or group beneficially owns 50% or more of the
                    outstanding voting securities of the surviving entity immediately after the transaction;

              •     the sale, exchange, or transfer of all or substantially all of our assets; or

              •     stockholder approval of our liquidation or dissolution.

             Adjustments of Awards. In the event of any stock dividend, stock split, combination or exchange of shares, merger,
         consolidation, spin-off, recapitalization, distribution of our assets to stockholders (other than normal cash dividends) or any
         other corporate event affecting the number of outstanding shares of our common stock or the share price of our common
         stock that would require adjustments to the Equity Plan or any awards under the Equity Plan in order to prevent the dilution
         or enlargement of the potential benefits intended to be made available thereunder, the Equity Plan will provide that the
         administrator will make appropriate, proportionate adjustments to:

              •     the aggregate number and type of shares subject to the Equity Plan;

              •     the number and kind of shares subject to outstanding awards and terms and conditions of outstanding awards
                    (including, without limitation, any applicable performance targets or criteria with respect to such awards); and

              •     the grant or exercise price per share of any outstanding awards under the Equity Plan.

             Amendment and Termination. The Equity Plan will provide that our board of directors or the compensation committee
         (with the approval of the board of directors) may terminate, amend or modify the Equity Plan at any time and from time to
         time. However, the Equity Plan will generally require us to obtain stockholder approval:

              •     to increase the number of shares available under the Equity Plan (other than in connection with certain corporate
                    events, as described above);

              •     to grant options with an exercise price that is below 100% of the fair market value of shares of our common stock on
                    the grant date;

              •     to extend the exercise period for an option beyond ten years from the date of grant; or

              •     to the extent required by applicable law, rule or regulation (including any applicable stock exchange rule).

             The Equity Plan will provide that, notwithstanding the foregoing, an option may be amended to reduce the per share
         exercise price below the per share exercise price of such option on the grant date and that options may be granted in
         exchange for, or in connection with, the cancellation or surrender of options having a higher per share exercise price without
         receiving additional stockholder approval.

             Expiration Date. The Equity Plan will expire on, and no option or other award will be granted pursuant to the Equity
         Plan after, the tenth anniversary of the effective date of the Equity Plan. Any award that will be outstanding on the expiration
         date of the Equity Plan will remain in force according to the terms of the Equity Plan and the applicable award agreement.


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            Securities Laws and U.S. Federal Income Taxes. The Equity Plan will be designed to comply with various securities
         and U.S. federal tax laws as follows:

                      Securities Laws. The Equity Plan will be designed to conform to all provisions of the Securities Act and the
                  Exchange Act and any and all regulations and rules promulgated by the SEC thereunder, including without limitation,
                  Rule 16b-3. The Equity Plan will be administered, and options will be granted and may be exercised, only in such a
                  manner as to conform to such laws, rules and regulations.

                       Section 409A of the Code. The Equity Plan will be designed to comply with the requirements of Section 409A of
                  the Code and, to the extent that awards under the Equity Plan will be considered “nonqualified deferred compensation”
                  for purposes of Section 409A of the Code and will be subject to the additional requirements regarding the payment of
                  deferred compensation imposed by Section 409A of the Code, such awards will be intended to be exempt from or to
                  comply with Section 409A of the Code.

                        Section 162(m) of the Code. The Equity Plan will be designed to provide for awards that are exempt from the
                  requirements of Section 162(m) of the Code which generally provides that income tax deductions of publicly held
                  corporations may be limited to the extent total compensation (including, but not limited to, base salary, annual bonus
                  and income attributable to stock option exercises and other non-qualified benefits) for certain executive officers exceeds
                  $1,000,000 (less the amount of any “excess parachute payments” as defined in Section 280G of the Code) in any
                  taxable year of the corporation, but provides that the deduction limit will not apply to certain “performance-based
                  compensation” established by an independent compensation committee that is adequately disclosed to and approved by
                  stockholders. In particular, stock options and SARs will satisfy the “performance-based compensation” exception if the
                  awards are made by a qualifying compensation committee, the Equity Plan sets the maximum number of shares that can
                  be granted to any person within a specified period and the compensation is based solely on an increase in the stock price
                  after the grant date. Specifically, the option exercise price must be equal to or greater than the fair market value of the
                  stock subject to the award on the grant date. Under a Section 162(m) transition rule for compensation plans of
                  corporations that are privately held and that subsequently become publicly held as a result of an initial public offering,
                  the Equity Plan will not be subject to Section 162(m) until a specified transition date, which is the earliest of:

              •      the material modification of the Equity Plan;

              •      the issuance of all of the shares of our common stock reserved for issuance under the Equity Plan;

              •      the expiration of the Equity Plan; or

              •      the first stockholders meeting at which members of our board of directors are elected during 2015.

             After the transition date, rights or awards granted under the Equity Plan, other than options and SARs, will not qualify as
         “performance-based compensation” for purposes of Section 162(m) unless such rights or awards are granted or vest upon
         pre-established objective performance goals, the material terms of which have been disclosed to and approved by our
         stockholders. Thus, after the transition date, we expect that such other rights or awards under the plan will not constitute
         performance-based compensation for purposes of Section 162(m).

            We intend to file with the SEC a registration statement on Form S-8 covering the shares of our common stock issuable
         under the Equity Plan.


         Executive Bonus Plan

             Prior to the completion of this offering, we intend to adopt an Executive Bonus Plan. The Executive Bonus Plan will be
         designed to provide an incentive for superior work and to motivate covered key executives toward even greater achievement
         and business results, to tie their goals and interests to those of us and our stockholders and to enable us to attract and retain
         highly qualified executives.

             The Executive Bonus Plan will be a performance-based bonus plan under which our designated key executives, including
         our named executive officers, will be eligible to receive bonus payments with respect to a


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         specified period (for example, our fiscal year). Bonuses will generally be payable under the Executive Bonus Plan upon the
         attainment of pre-established performance goals. Notwithstanding the foregoing, we may pay bonuses (including, without
         limitation, discretionary bonuses) to participants under the Executive Bonus Plan based upon such other terms and
         conditions as the compensation committee may in its discretion determine.

             Performance goals under the Executive Bonus Plan will relate to one or more corporate business criteria with respect to
         us or any of our subsidiaries, including but not limited to: net income or loss (either before or after interest, taxes,
         depreciation and/or amortization), EBITDA, sales or revenue, acquisitions or strategic transactions, operating income or loss,
         cash flow (including, without limitation, operating cash flow and free cash flow), return on capital, return on assets
         (including, without limitation, return on net assets), return on stockholders‟ equity, economic value added, stockholder
         returns, return on sales, gross or net profit margin, productivity, expenses, margins, operating efficiency, customer
         satisfaction, working capital, earnings or loss per share, price per share of equity securities, market share and number of
         customers, any of which may be measured either in absolute terms or as compared to any incremental increase or decrease,
         or as compared to results of a peer group.

             The Executive Bonus Plan will be administered by the compensation committee. The compensation committee will
         select the participants in the Executive Bonus Plan and the performance goals to be utilized with respect to the participants,
         establish the bonus formulas for each participant‟s annual bonus, and certify whether any applicable performance goals have
         been met with respect to a given performance period. The Executive Bonus Plan will provide that we may amend or
         terminate the Executive Bonus Plan at any time in our sole discretion. Any amendments to the Executive Bonus Plan will
         require stockholder approval only to the extent required by applicable law, rule or regulation.


         Compensation Risk Analysis

            Prior to the completion of this offering, we intend to analyze our compensation programs and policies to determine
         whether those programs and policies are reasonably likely to have a material adverse effect on us.


         DIRECTOR COMPENSATION

         2010 Director Compensation

             None of our directors received any compensation in connection with his services as a director in 2010. In 2010, our
         board of directors was comprised of Luke Hillier, Daniel Clarkson and R. Scott LaRose. Mr. Hillier and Mr. Clarkson were
         employees of the company in 2010. For a description of their compensation received as employees of the company please
         see the Summary Compensation Table and related narrative disclosure under “Executive Compensation — Summary
         Compensation Table.” Mr. LaRose was not an employee of the company in 2010 and did not receive any director‟s fees or
         other compensation for his services as a director in 2010. Although our directors did not receive any compensation for their
         services as directors in 2010, each of our directors received distributions in his capacity as a stockholder of the company in
         2010. See “Dividend Policy.”


         Director Compensation Policies

             In connection with this offering, we intend to adopt a non-employee director compensation program pursuant to which
         each non-employee director will receive an annual cash retainer, payable in equal quarterly installments, in the amount of
         $40,000; additional annual cash retainer fees of $15,000 to $25,000 for the chairpersons of our audit, compensation and
         nominating and corporate governance committees; and of additional annual cash retainer fees of $5,000 to $10,000 for the
         non-chairperson members of such committees. In addition, we intend that each non-employee director will receive an equity
         or equity-based compensation award with a fair market value of $100,000 upon his or her initial election to our board of
         directors (pro-rated for any partial year of service) and equity or equity-based compensation awards with a fair market value
         of $80,000 each year thereafter that the individual continues to serve as a non-employee director.


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                                                PRINCIPAL AND SELLING STOCKHOLDERS

             The following table provides certain information regarding the beneficial ownership of our outstanding capital stock as
         of December 31, 2010 for:

              •     each of the executive officers named in the Summary Compensation Table;
              •     each of our directors and director nominees;
              •     all of our directors and executive officers as a group;
              •     each person or group who beneficially owns more than 5% of our capital stock on a fully diluted basis; and
              •     each of the selling stockholders.

            The percentage of ownership indicated before this offering is based on 148,140 shares of common stock outstanding on
         December 31, 2010.

             Beneficial ownership of shares is determined under the rules of the SEC and generally includes any shares over which a
         person exercises sole or shared voting or investment power. Except as indicated by footnote, and subject to applicable
         community property laws, each person identified in the table possesses sole voting and investment power with respect to all
         shares of common stock held by them. Shares of common stock subject to options currently exercisable or exercisable within
         60 days of December 31, 2011 and not subject to repurchase as of that date are deemed outstanding for calculating the
         percentage of outstanding shares of the person holding these options, but are not deemed outstanding for calculating the
         percentage of any other person. Unless otherwise noted, the address for each director and executive officer is 621 Lynnhaven
         Parkway, Suite 400, Virginia Beach, Virginia 23452.


                                                                Shares                                            Shares
                                                         Beneficially Owned           Shares to be          Beneficially Owned
                                                        Prior to This Offering        Sold in This         After This Offering (1)
         Name
         and
         Address
         of
         Owner                                         Number           Percent        Offering          Number               Percent


         Executive Officers and Directors
         Luke Hillier (2) *                               86,540            58.42 %
         Daniel Clarkson (3) *                            24,640            16.63 %
         Patricia Bohlen                                      —                —
         Jason Wallace                                        —                —
         Bruce Dressel                                        —                —
         R. Scott LaRose (4) *                            36,960            24.95 %
         William A. Roper, Jr.                                —                —

         All Executive Officers and Directors as a
           Group                                        148,140            100.00 %




           * Beneficial Owners of 5% or More of the Outstanding Common Stock of ADS Tactical, Inc.

           (1) Does not give effect to any exercise of the over-allotment option by the underwriters.

           (2) This amount includes 1,730.8 shares of our common stock that Mr. Hillier transferred to the Luke M. Hillier 2010
               Grantor Retained Annuity Trust, for which Mr. Hillier serves as settlor and trustee. Pursuant to SEC rules, Mr. Hillier
               is deemed to have beneficial ownership of these shares.

           (3) This amount includes 492.8 shares of our common stock that Mr. Clarkson transferred to the Daniel J. Clarkson 2010
               Grantor Retained Annuity Trust, for which Mr. Clarkson serves as settlor and trustee. Pursuant to SEC rules,
               Mr. Clarkson is deemed to have beneficial ownership of these shares.

           (4) This amount includes 554.4 shares of our common stock that Mr. LaRose transferred to the R. Scott LaRose 2010
               Grantor Retained Annuity Trust, for which Mr. LaRose serves as settlor and trustee. Pursuant to SEC rules,
Mr. LaRose is deemed to have beneficial ownership of these shares.


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                                CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS


         Our Related Person Transaction Policy

             In connection with this offering, our board of directors will adopt a code of ethics that applies to all of our directors,
         officers and employees, including our chief executive officer. Our code of ethics will prohibit all conflicts of interest unless
         they have been approved or ratified by a majority of the independent directors on our board of directors (or an authorized
         committee of our board of directors). This code of ethics will be available on our website. Our board of directors, upon the
         recommendation of our nominating and corporate governance committee, will adopt a written policy with respect to related
         party transactions prior to the consummation of this offering.

             Pursuant to our related person transaction policy, any Related Person Transaction, including any arrangement or
         transaction existing on the date of this offering that is expected to continue in the future, must be approved or ratified by a
         majority of the independent directors on our board of directors and by our audit committee. In determining whether to
         approve or ratify a transaction with Related Persons, our independent directors and our audit committee may consider,
         among other things: (i) whether the terms of the transaction are fair to us and would apply on the same basis if the other
         party to the transaction did not involve a Related Person; (ii) whether there are compelling business reasons for us to enter
         into the transaction; (iii) whether the transaction would impair the independence of an otherwise independent director; and
         (iv) whether the transaction presents an improper conflict of interest, taking into account the size of the transaction, the
         overall financial position of the Related Person, the direct or indirect nature of his or her interest in the transaction and the
         ongoing nature of any proposed relationship and any other factors our board of directors and our audit committee deem
         relevant.

             Under our related person transaction policy, a “Related Person Transaction” is any transaction, arrangement or
         relationship between us or any of our subsidiaries and a Related Person that involves or is expected to involve more than
         $120,000. A “Related Person” is any of our executive officers, directors or director nominees, any stockholder beneficially
         owning in excess of 5% of our stock or securities exchangeable for our stock, any immediate family member of any of the
         foregoing persons, and any firm, corporation or other entity in which any of the foregoing persons is an executive officer, a
         partner or principal or in a similar position or in which such person has a 5% or greater beneficial interest in such entity.


         Transactions with Related Persons That We Believe Will Continue in the Future

             Below are historical transactions with Related Persons that we believe will continue in the future, subject to our Related
         Person Transaction policy and subject to approval or ratification by a majority of the independent directors on our board of
         directors and our audit committee.

            Tactical Distributors, LLC

              Tactical Distributors, LLC, or “Tactical Distributors,” is a wholesale distributor of tactical and operational equipment
         that sells primarily to non-government customers, including small resellers and individuals making purchases for
         recreational use. From time to time, we sell certain of our products to Tactical Distributors, which then resells these products
         to its customers. Occasionally, we purchase some of the products that we sell to our customers from Tactical Distributors.
         Due to restrictions in many of the agreements we have with certain of our vendors, we cannot sell certain products into the
         commercial market using our preferred government prices. To sell to non-government, commercial customers, we would
         have to obtain different pricing terms from our vendors, institute significant internal pricing controls and give our vendors
         audit visibility into our sales records to assure compliance with these vendor restrictions. We determined that implementing
         these operational controls and procedures was not cost-effective for the company and was not aligned with our core business
         strategy. Therefore, our stockholders established Tactical Distributors to transact these sales to non-government customers.
         The items that we sell to Tactical Distributors are limited to those that are not subject to customer restrictions by any vendor
         agreement. Sales to Tactical Distributors and purchases from Tactical Distributors have historically been at cost. In addition,
         in the past, our staff has assisted with the accounting and bookkeeping of Tactical Distributors in exchange for a


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         monthly fee of $1,000. Our staff no longer provides assistance with the accounting and bookkeeping of Tactical Distributors.

             For the years ended December 31, 2008, 2009 and 2010, we had sales to Tactical Distributors in the amounts of
         $1,141,734 and $1,775,451 and $1,793,383 respectively, and purchases from Tactical Distributors in the amounts of
         $147,394, $1,415,843 and $541,834, respectively. At December 31, 2008, 2009 and 2010, we had cash advances to Tactical
         Distributors in the amounts of $13,346, $39,686 and $13,804, respectively. At December 31, 2008, 2009 and 2010, we had
         accounts receivable from Tactical Distributors of $301,898, $253,214 and $227,651, respectively, and accounts payable of
         $4,617, $9,409 and $3,828, respectively. As of the date of this prospectus, all advances to Tactical Distributors have been
         repaid. In 2008, Tactical Distributors was owned by Daniel Clarkson, Luke Hillier, Michael Hillier, Jr. and R. Scott LaRose,
         in the amounts of 16.64%, 50.08%, 16.64% and 16.64%, respectively. From 2009 to the date of this prospectus, Tactical
         Distributors has been owned by Daniel Clarkson, Luke Hillier and R. Scott LaRose in the amounts of 16.63%, 58.42% and
         24.95%, respectively. Daniel Clarkson is our Chief Operating Officer and a member of our board of directors. Luke Hillier is
         our Chief Executive Officer and chairman of our board of directors. Michael Hillier, Jr. is Luke Hillier‟s brother. R. Scott
         LaRose is a member of our board of directors.


         Arrangements Relating to Aircraft

            Tactical Air, LLC

             We lease three aircraft from Tactical Air, LLC, or “Tactical Air.” Tactical Air owns the aircraft that we lease in order to
         facilitate our compliance with Federal Aviation Administration rules and regulations. ADS and Mythics are the only entities
         that lease aircraft from Tactical Air. We believe the fees that we paid to Tactical Air were favorable as compared to the fees
         and expenses that would have been incurred for comparable services from an independent third-party provider. For the years
         ended December 31, 2008, 2009 and 2010, we purchased $255,190, $201,786 and $158,954 of services from Tactical Air,
         respectively. At December 31, 2008, 2009 and 2010, we had accounts payable to Tactical Air of $45,790, $670 and $43,108,
         respectively. At December 31, 2009, we had cash advances due from Tactical Air of $16,400 for an invoice that we paid on
         behalf of Tactical Air. At December 31, 2010, we did not have any cash advances due from Tactical Air. We also had
         transactions with Tactical Air for each of the years ended December 31, 2008 and 2009 that we treated as of compensation to
         certain of our executive officers. In 2008, each of Luke Hillier, Michael Hillier, Jr. and R. Scott LaRose owned 33% of
         Tactical Air. In 2009, Tactical Air was owned 50% by Luke Hillier and 50% by R. Scott LaRose. From January 1, 2010 to
         the date of this prospectus, Tactical Air has been owned by Daniel Clarkson, Luke Hillier and R. Scott LaRose in the
         amounts of 16.64%, 41.68% and 41.68%, respectively.


            Tactical Hawker, LLC

             We lease an aircraft from Tactical Hawker, LLC, or “Tactical Hawker.” Tactical Hawker owns the aircraft that we lease
         in order to facilitate our compliance with Federal Aviation Administration rules and regulations. ADS and Mythics are the
         only entities that lease aircraft from Tactical Hawker. We believe the fees that we paid to Tactical Hawker were favorable as
         compared to the fees and expenses that would have been incurred for comparable services from an independent third-party
         provider. For the year ended December 31, 2008, we had cash advances due to Tactical Hawker of $52,005. For the years
         ended December 31, 2008, 2009 and 2010, we had purchases from Tactical Hawker in the amounts of $32,149, $443,160
         and $647,513, respectively. At December 31, 2009 and 2010, we had accounts payable to Tactical Hawker of $120,625 and
         $7,177, respectively. We also had transactions with Tactical Hawker for each of the years ended December 31, 2008 and
         2009 that we treated as compensation to certain of our executive officers. In 2008, Tactical Hawker was owned by Daniel
         Clarkson, Luke Hillier, Michael Hillier, Jr. and R. Scott LaRose in the amounts of 16.64%, 50.08%, 16.64% and 16.64%,
         respectively. From 2009 to the date of this prospectus, Tactical Hawker has been owned by Daniel Clarkson, Luke Hillier
         and R. Scott LaRose in the amounts of 16.63%, 58.42% and 24.95%, respectively.


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            Tactical Pilot Operations, LLC

             We purchase pilot services for chartered aircraft from Tactical Pilot Operations, LLC, or “Tactical Pilot.” This entity
         employs the pilots that operate the planes held by Tactical Air and Tactical Hawker and provides maintenance and other
         operational services in connection with these planes. Tactical Pilot provides services only to ADS and to Mythics. We
         believe the fees that we paid to Tactical Pilot were favorable as compared to the fees and expenses that would have been
         incurred for comparable services from an independent third-party provider. For the years ended December 31, 2008, 2009
         and 2010, we had purchases of $49,208, $134,944 and $202,201 from Tactical Pilot, respectively. At December 31, 2008,
         2009 and 2010, we had accounts payable to Tactical Pilot in the amounts of $33,825, $19,022 and $12,287, respectively. We
         also had transactions with Tactical Pilot for each of the years ended December 31, 2008 and 2009 that we treated as
         compensation to certain of our executive officers. In 2008, each of Luke Hillier, Michael Hillier, Jr. and R. Scott LaRose
         owned 33% of Tactical Pilot. In 2009, each of Luke Hillier and R. Scott LaRose owned 50% of Tactical Pilot. From
         January 1, 2010 to the date of this prospectus, Tactical Pilot has been owned by Daniel Clarkson, Luke Hillier and R. Scott
         LaRose in the amounts of 16.64%, 41.68% and 41.68%, respectively.


         Arrangements Relating to Real Property

            Tactical Warehouse, LLC

             We lease our kitting facility from Tactical Warehouse, LLC, or “Tactical Warehouse,” which owns the building that
         houses our kitting facility. We also guarantee debt in the amount of $7.5 million incurred by Tactical Warehouse to purchase
         the building that houses our kitting facility. We believe that the rent we pay is comparable to that which would be paid by an
         unaffiliated third party leasing the same space. For the years ended December 31, 2008, 2009 and 2010, we paid rent to
         Tactical Warehouse in the amounts of $223,000, $577,125 and $698,435, respectively. In 2008, Tactical Warehouse was
         owned by Daniel Clarkson, Luke Hillier, Michael Hillier, Jr. and R. Scott LaRose in the amounts of 16.64%, 50.08%,
         16.64% and 16.64%, respectively. From 2009 to the date of this prospectus, Tactical Warehouse has been owned by Daniel
         Clarkson, Luke Hillier and R. Scott LaRose in the amounts of 16.63%, 58.42% and 24.95%, respectively. Tactical
         Warehouse is consolidated with ADS in our historical financial statements.


            Tactical Office, LLC

             In the fourth quarter of 2009, we entered into a lease for office space in our corporate headquarters with Tactical Office,
         LLC, or “Tactical Office,” which owns and operates the office building that contains our corporate headquarters as well as
         the offices of several additional, non-affiliated third-party tenants that are located in the same building as our corporate
         headquarters. We also guarantee debt in the amount of $6.1 million incurred by Tactical Office to purchase the building in
         which our corporate headquarters resides. For the years ended December 31, 2009 and 2010, we paid rent to Tactical Office
         in the amounts of $360,000 and $1,392,693, respectively. At December 31, 2009 and 2010, we had cash advances to Tactical
         Office of $704,901 and $0, respectively. These advances were related to an allowance for leasehold improvements, which
         was provided to Tactical Office by us. The rent that we pay to Tactical Office is slightly more per square foot than the rent
         paid by the non-affiliated third-party tenants who reside in the same building because our leased space was recently
         improved while the other space in the building was not. We believe that the rent that we pay to Tactical Office is similar to
         that paid for comparable office space in the area. At December 31, 2010, we had accounts payable to Tactical Office of $0.
         From 2009 to the date of this prospectus, Tactical Office has been owned by Daniel Clarkson, Luke Hillier and R. Scott
         LaRose in the amounts of 16.63%, 58.42% and 24.95%, respectively. Tactical Office is consolidated with ADS in our
         historical financial statements.


         Transactions with Related Persons That We Do Not Expect to Continue in the Future

            Tactical Exporters, Inc.

            We have utilized the services of Tactical Exporters, Inc., or “Tactical Exporters” in connection with the sale of the
         products and related services we offer outside of the United States. Tactical Exporters is a DISC under the Internal Revenue
         Code, which provides a tax savings for transactions that utilize a DISC in order to


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         encourage the export of U.S.-made products. Because we have historically operated as a subchapter S corporation, the
         stockholders of ADS were able to realize tax savings by effecting certain qualifying sales outside of the United States
         through Tactical Exporters. The fees paid by us to Tactical Exporters were calculated in accordance with the IRS guidelines
         governing the use of DISCs and were contributed back to ADS by the stockholders of Tactical Exporters on an annual basis.
         For the years ended December 31, 2008, 2009 and 2010, we made payments to Tactical Exporters of $2,364,635, $4,544,266
         and $0, respectively, in exchange for services provided by Tactical Exporters. In 2008, Tactical Exporters was owned by
         Daniel Clarkson, Luke Hillier, Michael Hillier, Jr. and R. Scott LaRose in the amounts of 16.64%, 50.08%, 16.64% and
         16.64%, respectively. From 2009 to the date of this prospectus, Tactical Exporters was owned by Daniel Clarkson, Luke
         Hillier, and R. Scott LaRose in the amounts of 16.63%, 58.42% and 24.95%, respectively. Tactical Exporters is consolidated
         with ADS in our historical financial statements for fiscal years 2008, 2009 and 2010. Tactical Exporters‟ existence will
         terminate upon consummation of this offering.


            Mythics, Inc.

             In 2006, we purchased products and services from Mythics, Inc., or “Mythics,” in connection with the implementation of
         our Oracle Enterprise Resource Planning, or “Oracle ERP,” software system. Prior to engaging Mythics, we evaluated other
         operational and accounting software systems and found that our needs would be best served by implementing Oracle ERP. In
         subsequent years, in order to complete the implementation of our Oracle ERP system, we purchased additional support
         services from Mythics. Our Oracle ERP-related maintenance and support services are now provided by a non-affiliated third
         party on pricing terms similar to those we received from Mythics. For the year ended December 31, 2008, we purchased
         software, development and implementation services from Mythics in the amount of $113,469, and had accounts payable to
         Mythics at the end of this fiscal year in the amount of $102,069. For the year ended December 31, 2010 we purchased
         software, development and implementation services from Mythics in the amount of $30,000. In 2008 and 2009, each of Luke
         Hillier, Michael Hillier, Jr. and R. Scott LaRose owned 33.3% of Mythics. As of the date of this prospectus, Mythics is
         owned by Luke Hillier, Michael Hillier, Jr., R. Scott LaRose and Charles Salle in the amounts of 3.33%, 33.33%, 13% and
         50.33%, respectively. Charles Salle is our General Counsel. At December 31, 2010, we had cash advances due from Mythics
         of $62,462 related to payments we made on behalf of Mythics.


            Tactical Properties, LLC

             We leased two homes from Tactical Properties, LLC, or “Tactical Properties.” For each of the years ended December 31,
         2008, 2009 and 2010, we paid rent and other fees in connection with property management services to Tactical Properties in
         the amount of $180,000, $180,000 and $0, respectively. At December 31, 2009 and 2010, we had cash advances to Tactical
         Properties of $9,015 and $0, respectively. Each of Daniel Clarkson, Luke Hillier, Michael Hillier, Sr., Michael Hillier, Jr., R.
         Scott LaRose and Charles Salle own 16.67% of Tactical Properties. Michael Hillier, Sr. is the father of Luke Hillier. Our
         relationship with Tactical Properties has been discontinued.


            Other

            From time to time, we have made payments on behalf of our stockholders for personal expenses and on behalf of entities
         owned by certain of our stockholders for expenses incurred, for which we were subsequently reimbursed. At December 31,
         2008, 2009 and 2010, we had advances due from affiliates of $2,707,643, $635,361 and $239,687, respectively, including
         advances to certain entities discussed above. All advances have been repaid. After this offering, we do not expect to make
         any advances to, or payments on behalf of, our stockholders or any of our employees for personal expenses.



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                                              DESCRIPTION OF CERTAIN INDEBTEDNESS

            The following is a summary of the material provisions of the instruments evidencing our existing material indebtedness.
         This summary is not a complete description of all of the terms of the agreements governing our material indebtedness.


         Senior Secured Notes

             On March 25, 2011, we issued $275.0 million of 11% senior secured notes due April 1, 2018 at an offering price of
         100% of the face value of the senior secured notes. Interest on the senior secured notes is payable on April 1 and October 1
         of each year. The proceeds from the offering of the senior secured notes were used (1) to make a distribution of
         $217.1 million to our stockholders, (2) to repay our term loan facility, (3) to pay the transaction bonuses and (4) to pay
         related transaction fees and expenses, including discounts and commissions to the initial purchasers of the senior secured
         notes. See “Prospectus Summary — Recent Developments.”

             The senior secured notes are secured by a first-priority lien (subject to certain exceptions and permitted liens) on certain
         fixed and intangible assets, capital stock of certain subsidiaries, certain intercompany loans held by us and the guarantors of
         the senior secured notes, and proceeds of the foregoing, in each case held by us and the guarantors of the senior secured
         notes. The senior secured notes are also secured by a second-priority lien (subject to certain exceptions and permitted liens)
         on all accounts (other than certain notes accounts), instruments, chattel paper and other contracts evidencing such accounts,
         inventory, certain investment property, cash (other than cash proceeds of the collateral subject to a first-priority lien in favor
         of the senior secured notes), general intangibles and instruments related to the foregoing and proceeds of the foregoing, in
         each case held by us and the guarantors of the senior secured notes.

             Prior to April 1, 2015, the senior secured notes may be redeemed in part or in full at a redemption price equal to 100% of
         the principal amount of the senior secured notes, plus a make-whole premium calculated in accordance with the senior
         secured notes indenture and accrued and unpaid interest, if any. In addition, prior to April 1, 2014, up to 35% of the original
         principal amount of the senior secured notes (including any additional notes issued under the senior secured notes indenture)
         may be redeemed with the net proceeds of certain equity offerings completed before April 1, 2014 at 111%, provided that
         after giving effect to such redemption, not less than 50% of the senior secured notes remain outstanding. On or after April 1,
         2015, the senior secured notes may be redeemed in part or in full at the following percentages of the outstanding principal
         amount prepaid: 108.250% prior to April 1, 2016; 105.500% on or after April 1, 2016, but prior to April 1, 2017; and 100%
         on or after April 1, 2017.

             In the event of a “Change in Control” (as defined in the senior secured notes indenture and described in the following
         sentence), we will be required to offer to repurchase the senior secured notes at a price equal to 101% of the principal
         amount, plus accrued and unpaid interest, if any, to the date of repurchase. “Change in Control” under the senior secured
         notes indenture means the occurrence of any of the following: (1) any person or group (other than Permitted Holders (as
         defined in the senior secured notes indenture) or a direct or indirect parent entity) becomes the beneficial owner, directly or
         indirectly, of a majority of the total voting power of the Voting Stock (as defined in the senior secured notes indenture), (2) a
         sale or transfer of all or substantially all of our assets or (3) a change in the majority of our board of directors in certain
         circumstances. In addition, we will be required to offer to repurchase the senior secured notes at a price equal to 100% of the
         principal amount, plus accrued and unpaid interest, if any, with Net Proceeds (as defined in the senior secured notes
         indenture) from certain asset sales (including collateral securing the senior secured notes) as defined under the senior secured
         notes indenture, if such proceeds have not otherwise been used in certain specified manners within 365 days of the date of
         the asset sale.

             The senior secured notes indenture contains customary covenants and restrictions on the activities of us and our restricted
         subsidiaries, including, but not limited to, the incurrence of additional indebtedness; pay dividends or make distributions or
         redeem our capital stock; pay or redeem or purchase certain indebtedness; make certain loans and investments; sell assets;
         create liens on certain assets to secure debt; enter into agreements restricting our subsidiaries‟ ability to pay dividends;
         consolidate, merge, sell or otherwise dispose


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         of all or substantially all of our assets; and engage in transactions with affiliates. Certain of these covenants will be
         suspended if the senior secured notes are assigned an investment grade rating by both Standard & Poor‟s Rating Services and
         Moody‟s Investor Service, Inc. and no default has occurred or is continuing. If either such rating on the senior secured notes
         should subsequently decline to below investment grade, the suspended covenants will be reinstated.

             Events of default under senior secured notes indenture include, but are not limited to, (1) failure to pay principal or
         interest when due; (2) failure to comply with the terms of the senior secured notes indenture after 60 days notice; (3) a
         default with respect to other indebtedness for failure to pay amounts due or which results in the acceleration of such
         indebtedness if the aggregate amount of such indebtedness is $20.0 million or greater; (4) certain bankruptcy events;
         (5) failure to pay final non-appealable judgments entered by a court aggregating in excess of $20.0 million within 60 days;
         and (6) subject to certain exceptions, the documents evidencing our obligations pursuant to the senior secured notes and the
         senior secured revolving credit facility cease to be in effect or are denied or disaffirmed by us or any of the guarantors
         thereunder.

             All obligations under the senior secured notes are unconditionally guaranteed on a senior secured basis by all of our
         existing and future direct and indirect subsidiaries that borrow under or guarantee any obligation under our senior secured
         revolving credit facility or any other indebtedness of us or any other guarantor of the senior secured notes.

             The senior secured notes will not be registered under the Securities Act.


         Senior Secured Revolving Credit Facility

             On February 18, 2010, we refinanced our then-existing credit facility by entering into a $180.0 million senior secured
         revolving credit facility (including an optional increase in commitments of up to $25.0 million) among Atlantic Diving
         Supply, Inc. as borrower, ADS Tactical, Inc. and MAR-VEL as guarantors and Wells Fargo Bank, National Association
         (successor by merger to Wachovia Bank, National Association), as administrative agent (as defined therein) and the other
         parties thereto. On October 22, 2010, we amended our senior secured revolving credit facility to permit us to enter into our
         term loan facility. In connection with the refinancing transactions, we amended and restated the senior secured revolving
         credit facility to, among other things, repay our term loan facility, provide for up to $200.0 million in borrowings with an
         optional increase in commitments of up to $50.0 million, and permit the offering of the senior secured notes and the
         distributions to our equity holders. The amended and restated senior secured revolving credit facility became effective
         concurrently with the completion of the offering of the senior secured notes. In connection with the amendment and
         restatement of our senior secured revolving credit facility, we refinanced our senior secured revolving credit facility with
         certain lenders, Wells Fargo Bank, National Association, as administrative agent, Wells Fargo Capital Finance, LLC, as sole
         lead arranger, manager and bookrunner and each of Suntrust Bank, RBS Business Capital (a division of RBS Asset Finance,
         Inc., a subsidiary of RBS Citizens, N.A.) and Bank of America, N.A. as co-syndication agents and added ADS Tactical, Inc.
         as a borrower.

              The senior secured revolving credit facility, as amended and restated, matures on March 25, 2016 and provides senior
         secured financing of up to $200.0 million, subject to a borrowing base. The senior secured revolving credit facility allows for
         an optional increase in commitments up to an additional $50.0 million. Atlantic Diving Supply, Inc.‟s future domestic
         subsidiaries may become co-borrowers with us and Atlantic Diving Supply, Inc., or co-guarantors with MAR-VEL, under
         the senior secured revolving credit facility. Availability under the senior secured revolving credit facility is subject to the
         assets of Atlantic Diving Supply, Inc. and any co-borrowers that are available to collateralize the borrowing and is reduced
         by reserves established by the administrative agent from time-to-time. As of March 31, 2011, we had $66.1 million drawn
         under the senior secured revolving credit facility, resulting in availability of $133.9 million, subject to borrowing base
         limitations. As of March 31, 2011, we had $6.8 million letters of credit outstanding. The borrowing base for the senior
         secured revolving credit facility at any time is expected to equal the (a) sum of 90% of eligible government accounts
         receivable, plus 85% of eligible commercial accounts receivable, plus the lesser of (i) 65% of the value of eligible inventory,
         (ii) 85% of the net recovery percentage of the value of


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         eligible inventory and (iii) $80.0 million and minus (b) reserves established and modified from time to time. The senior
         secured revolving credit facility includes borrowing capacity available for letters of credit up to $50.0 million and for
         swingline loans up to $10.0 million, with same-day notice for borrowings under the senior secured revolving credit facility
         and swingline loans, and is available in U.S. dollars.

             The senior secured revolving credit facility, as amended, provides us with the right to request up to $50.0 million of
         additional commitments under this facility. The lenders under the senior secured revolving credit facility are not under any
         obligation to provide any such additional commitments under this facility, and any increase in commitments is subject to
         customary conditions precedent. If we were to request any such additional commitments and the existing lenders or new
         lenders were to agree to provide such commitments, we expect that the facility size could be increased to up to
         $250.0 million, but our ability to borrow under this facility would still be limited by the amount of the borrowing base.

             Borrowings under the senior secured revolving credit facility bear interest at a rate per annum equal to, at our option,
         either (a) with respect to base rate loans and swingline loans, a base rate determined by reference to the highest of (1) the
         prime rate of Wells Fargo Bank, National Association, (2) the federal funds effective rate plus 0.50% and (3) a LIBOR rate
         determined by reference to the costs of funds for U.S. dollar deposits for an interest period of one month adjusted for certain
         additional costs, plus 1.00% or (b) with respect to Eurodollar rate loans, a LIBOR rate determined by reference to the costs
         of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain eurocurrency
         liabilities established by the Federal Reserve Board (“Adjusted LIBOR”), in each case plus an applicable margin.
         Commencing with the completion of the first calendar quarter after June 30, 2011, the applicable margin for borrowings
         thereunder will be subject to adjustment each fiscal quarter, based on the average excess availability.

             In addition to paying interest on outstanding principal under our senior secured revolving credit facility, we are required
         to pay a commitment fee in respect of the unutilized commitments thereunder, which we initially expect to be equal to 0.5%.
         Commencing with the completion of the first calendar quarter after June 30, 2011, the commitment fee will range between
         0.375% to 0.500% and be subject to adjustment based on the amount of unutilized commitments. We must also pay
         customary letter of credit fees and agency fees.

             If at any time the aggregate amount of all loans, special agent advances (i.e. advances that the agent is entitled to charge
         to the borrower‟s account to preserve the collateral), unreimbursed letter of credit drawings and undrawn letters of credit
         under our senior secured revolving credit facility exceeds the lesser of (a) the aggregate commitment amount and (b) the
         borrowing base, we are required to repay the amount of the excess. We are required to prepay loans with 100% of the
         proceeds of the sale of, or insurance recoveries in respect of, our assets constituting collateral, provided that any such
         proceeds in respect of assets constituting collateral other than collateral securing a first-priority lien on the senior secured
         revolving credit facility, so long as no event of default has occurred and is occurring, such mandatory prepayment shall be
         subject to our option to reinvest such proceeds in assets useful to our business for a period of 365 days (which period shall be
         extended by 180 days if we enter into a legally binding commitment to reinvest such proceeds within such 365 day period).

             We may voluntarily reduce the unutilized portion of the commitments under the senior secured revolving credit facility,
         in whole or in part, with prior written notice to the administrative agent. Prepayments of loans may be made without
         premium or penalty other than customary “breakage” costs with respect to Eurodollar rate loans.

             There is no scheduled amortization under our senior secured revolving credit facility. The principal amount outstanding
         of the loans under the senior secured revolving credit facility is due and payable in full on the fifth anniversary of the closing
         date, except for swingline loans, which are payable on demand.

             All obligations under our senior secured revolving credit facility are unconditionally guaranteed by MAR-VEL and our
         future domestic subsidiaries are required to guarantee or become a co-borrower under our senior secured revolving credit
         facility.

             The senior secured revolving credit facility is secured by first priority security interests in the all of our accounts
         receivable, inventory, cash (other than cash proceeds of the collateral securing a first-priority lien on


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         the senior secured notes), general intangibles and instruments related to the foregoing and proceeds of the foregoing and by
         second priority security interests in the collateral securing a first-priority lien on the senior secured notes, which includes all
         equipment, real estate, intellectual property, certain capital stock, general intangibles and instruments related to the foregoing
         and proceeds of the foregoing. See “— Senior Secured Notes.”

             Our senior secured revolving credit facility contains a number of covenants that, among other things and subject to
         certain exceptions, restrict our ability and the ability of our subsidiaries to incur additional indebtedness and alter, modify or
         make payments on certain indebtedness; incur additional liens; make investments, including: purchase of obligations or
         securities, capital contributions, loans, deposits, guarantees, or acquisitions; consolidate, merge, dissolve or liquidate; pay
         dividends on our or our subsidiaries‟ capital stock or redeem, repurchase or retire such capital stock or our other
         indebtedness; create restrictions on the payment of dividends or other amounts to us; engage in transactions with our
         affiliates; make accounting changes or amendments to organizational documents; modify material contracts; alter the
         business we conduct; and sell or transfer assets, including capital stock of our subsidiaries.

             Each of the covenants limiting dividends and other restricted payments, investments, loans and acquisitions, incurrence
         of unsecured debt, and prepayments or redemptions of certain indebtedness are expected to permit the restricted actions so
         long as certain payment conditions are satisfied, including certain specified excess availability and fixed charge coverage
         tests. In addition, we are required to maintain, on a monthly basis, a fixed charge coverage ratio of not less than 1.1 to 1.0 if
         either an event of default has occurred and is continuing or the undrawn availability under our senior secured revolving
         credit facility is less than 12.5% of our aggregate commitment, which requirement shall no longer apply after such
         conditions cease to apply for a period of 90 days. The loan and security agreement contains certain customary
         representations and warranties, affirmative covenants and collateral reporting and covenants.


         Events of Default

             The senior secured revolving credit facility includes customary events of default, including, but not limited to, payment
         defaults; material misrepresentations; breaches of certain covenants; bankruptcy; change of control; material judgments;
         certain Employee Retirement Income Security Act of 1974, as amended (“ERISA”) related breaches; and cross-defaults to
         material indebtedness.


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                                                   DESCRIPTION OF CAPITAL STOCK

            The following is a description of the material terms of our amended and restated certificate of incorporation and bylaws.
         We refer you to our amended and restated certificate of incorporation and bylaws, copies of which have been filed as
         exhibits to the registration statement relating to this offering.

             Upon completion of this offering, there will be        shares of common stock outstanding and no shares of preferred
         stock outstanding.

         Common Stock

             Pursuant to our amended and restated certificate of incorporation, we will be authorized to issue up to shares of common
         stock, par value $0.01 per share. Holders of common stock will be entitled to one vote for each share held on all matters
         submitted to a vote of stockholders and will not have cumulative voting rights. Accordingly, holders of a majority of the
         shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election.
         Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by our board of directors
         out of funds legally available therefor, subject to any preferential dividend rights of outstanding preferred stock. Upon our
         liquidation, dissolution or winding up, the holders of common stock are entitled to receive ratably our net assets available
         after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders
         of our common stock have no preemptive, subscription, redemption or conversion rights. The outstanding shares of common
         stock are, and the shares offered by us hereby will be, when issued and paid for, fully paid and nonassessable. If we issue
         any preferred stock, the rights, preferences and privileges of holders of common stock will be subject to, and may be
         adversely affected by, the rights of the holders of our preferred stock. See “—Preferred Stock.”

         Preferred Stock

             Pursuant to the terms of our amended and restated certificate of incorporation, we will be authorized to issue up
         to       shares of preferred stock, par value $0.01 per share. Our board of directors is authorized, subject to any limitations
         prescribed by law, without further stockholder approval, to issue such shares of preferred stock in one or more series. Each
         such series of preferred stock shall have such rights, preferences, privileges and restrictions, including voting rights,
         dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be determined by our board of
         directors.

             The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to
         eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing
         desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it
         more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of our
         outstanding voting stock. The existence of the authorized but undesignated preferred stock may have a depressive effect on
         the market price of our common stock.

         Stockholders’ Agreement

             Upon consummation of this offering, our existing stockholders, Luke Hillier, Daniel Clarkson and Robert Scott LaRose
         will enter into a stockholders agreement. The stockholders agreement will provide that so long as Messrs. Hillier, Clarkson
         and LaRose, along with each of their respective affiliates, hold at least 50% of our outstanding common stock, each of
         Messrs. Hillier, Clarkson and LaRose, and each of their respective affiliates, will vote their shares of common stock in favor
         of one director designated by Mr. Clarkson, one director designated by Mr. LaRose and such other directors as may be
         designated by Mr. Hillier. There is no limit on the number of directors that Mr. Hillier may designate. Upon consummation
         of this offering, the parties to the stockholders agreement will continue to own approximately % of our common stock,
         collectively.

             The stockholders agreement will also include customary limitations on transfer such that the parties to the agreement will
         not be permitted to transfer their shares, other than pursuant to a registered public


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         offering or a sale through a broker-dealer pursuant to Rule 144 of the Securities Act, unless they have first made the offer to
         sell such shares to the other stockholders party to the stockholders agreement.

           Under the terms of the stockholders agreement, we will agree to register the shares of our common stock owned by
         Messrs. Hillier, Clarkson and LaRose and their respective affiliates under the following circumstances:

              •     Demand Rights. At any time after the expiration of the lock-up agreements that we signed with the underwriters,
                    upon the written request from any of the parties to the stockholders agreement, we will register shares of our
                    common stock specified in such request for resale under an appropriate registration statement field and declared
                    effective by the SEC. We may defer a demand registration by up to 90 days if our board of directors determines it
                    would be detrimental to us to file a registration statement.

              •     Piggyback Rights. If at any time we file a registration statement for the purposes of making a public offering of our
                    common stock, or register outstanding shares of our common stock for resale on behalf of any holder of our
                    common stock, the parties to the stockholders agreement may elect to include in such registration statement any
                    shares of common such person holds. The managing underwriter in the contemplated offering may exclude all or a
                    part of the shares according to market factors pursuant to an order of priority set forth in the stockholders agreement.

         Certain Corporate Anti-Takeover Provisions

            Our amended and restated certificate of incorporation and bylaws will contain a number of provisions relating to
         corporate governance and to the rights of stockholders. Certain of these provisions may be deemed to have a potential
         “anti-takeover” effect in that such provisions may delay, defer or prevent a change of control of the company. These
         provisions include:

            Preferred Stock. Our board of directors has authority to issue series of preferred stock with such voting rights and other
         powers as the board of directors may determine, as described above.

            Classified Board. Our board of directors will be classified into three classes. Each director will serve a three year term
         and will stand for re-election once every three years.

             Removal of Directors, Vacancies. Our stockholders will be able to remove directors only for cause and only by the
         affirmative vote of the holders of a majority of the outstanding shares of our capital stock entitled to vote in the election of
         directors. Vacancies on our board of directors may be filled only by a majority of our board of directors.

             No Cumulative Voting. Our amended and restated certificate of incorporation will provide that stockholders do not have
         the right to cumulative votes in the election of directors. Cumulative voting rights would have been available to the holders
         of our common stock if our amended and restated certificate of incorporation had not negated cumulative voting.

             No Stockholder Action by Written Consent; Calling of Special Meetings of Stockholders. Our amended and restated
         certificate of incorporation will not permit stockholder action without a meeting by consent except for the unanimous
         consent of all holders of our common stock. They also will provide that special meetings of our stockholders may be called
         only by our board of directors or the chairman of our board of directors.

             Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our bylaws will provide that
         stockholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of
         stockholders must provide timely notice of their proposal in writing to the corporate secretary.

             Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or
         brought before the meeting by or at the direction of our board of directors or by a stockholder of record on the record date
         for the meeting, who is entitled to vote at the meeting and who has delivered timely


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         written notice in proper form to our secretary of the stockholder‟s intention to bring such business before the meeting.

             Section 203 of the Delaware General Corporation Law. We are subject to Section 203 of the Delaware General
         Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested
         stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the
         following exceptions:

              •     before such date, the board of directors of the corporation approved either the business combination or the
                    transaction that resulted in the stockholder becoming an interested stockholder;

              •     upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested
                    stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began,
                    excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by
                    the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee
                    stock plans in which employee participants do not have the right to determine confidentially whether shares held
                    subject to the plan will be tendered in a tender or exchange offer; or

              •     on or after such date, the business combination is approved by the board of directors and authorized at an annual or
                    special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2 / 3 % of the
                    outstanding voting stock that is not owned by the interested stockholder.

             In general, Section 203 defines business combination to include the following:

              •     any merger or consolidation involving the corporation and the interested stockholder;

              •     any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested
                    stockholder;

              •     subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock
                    of the corporation to the interested stockholder;

              •     any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any
                    class or series of the corporation beneficially owned by the interested stockholder; or

              •     the receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges or other financial
                    benefits by or through the corporation.

             In general, Section 203 defines an “interested stockholder” as an entity or person who, together with the person‟s
         affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder
         status did own, 15% or more of the outstanding voting stock of the corporation.

         Limitation on Directors’ Liability and Indemnification

             Section 145 of the Delaware General Corporation Law grants each corporation organized thereunder the power to
         indemnify any person who is or was a director, officer, employee or agent of a corporation or enterprise, against expenses,
         including attorneys‟ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in
         connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or
         investigative, other than an action by or in the right of the corporation, by reason of being or having been in any such
         capacity, if he acted in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the
         corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was
         unlawful. A similar standard of care is applicable in the case of expenses, including attorneys‟ fees, in actions by or in the
         right of the corporation, except that no indemnification may be made in respect of any claim, issue or matter as to which
         such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of
         Chancery or the court in which such action was brought determines that, despite adjudication of liability, but in view of all of
         the circumstances of the case, the person is fairly and reasonably entitled to indemnity for expenses that the Delaware Court
         of Chancery or other court shall deem proper.
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             Section 102(b)(7) of the Delaware General Corporation Law enables a corporation in its certificate of incorporation, or
         an amendment thereto, to eliminate or limit the personal liability of a director to the corporation or its stockholders of
         monetary damages for violations of the directors‟ fiduciary duty of care as a director, except (i) for any breach of the
         director‟s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve
         intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law
         (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or
         (iv) for any transaction from which a director derived an improper personal benefit.

             Our amended and restated bylaws will indemnify the directors and officers to the full extent of the Delaware General
         Corporation Law and also allow our board of directors to indemnify all other employees. Such indemnification extends to
         the payment of judgments against such officers and directors and to reimbursement of amounts paid in settlement of such
         claims or actions and may apply to judgments in favor of the corporation or amounts paid in settlement to the corporation.
         Such indemnification also extends to the payment of counsel fees and expenses of such officers and directors in suits against
         them where successfully defended by them or where unsuccessfully defended, if there is no finding or judgment that the
         claim or action arose from the gross negligence or willful misconduct of such officers or directors. Such right of
         indemnification is not exclusive of any right to which such officer or director may be entitled as a matter of law and shall
         extend and apply to the estates of deceased officers and directors.

             We will maintain a directors‟ and officers‟ insurance policy. The policy will insure directors and officers against
         unindemnified losses arising from certain wrongful acts in their capacities as directors and officers and will reimburse us for
         those losses for which we have lawfully indemnified the directors and officers. The policy contains various exclusions that
         are normal and customary for policies of this type.

             The foregoing summaries are subject to the complete text of our amended and restated certificate of incorporation and
         amended and restated bylaws and the Delaware General Corporation Law and are qualified in their entirety by reference
         thereto.

             We believe that our amended and restated certificate of incorporation and amended and restated bylaws and insurance
         are necessary to attract and retain qualified persons as directors and officers. The limitation of liability and indemnification
         provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage
         stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. They may also reduce the likelihood
         of derivative litigation against directors and officers, even though an action, if successful, might benefit us and other
         stockholders. Furthermore, a stockholder‟s investment may be adversely affected to the extent we pay the costs of settlement
         and damage awards against directors and officers as required or allowed by these indemnification provisions.

         Transfer Agent and Registrar

             The transfer agent and registrar for the common stock is        .

         Exchange Listing

             We will apply for listing of our common stock on the New York Stock Exchange under the symbol “ADSI.”



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                                                   SHARES ELIGIBLE FOR FUTURE SALE


             We cannot predict what effect, if any, market sales of shares of common stock or the availability of shares of common
         stock for sale will have on the market price of our common stock. Nevertheless, sales of substantial amounts of common
         stock in the public market, or the perception that such sales could occur, could materially and adversely affect the market
         price of our common stock and could impair our future ability to raise capital through the sale of our equity or equity-related
         securities at a time and price that we deem appropriate.

             Upon the closing of this offering, we will have outstanding an aggregate of approximately            shares of common
         stock, assuming the over-allotment option is not exercised. Of the outstanding shares, the shares sold in this offering will be
         freely tradable without restriction or further registration under the Securities Act, except that any shares held by our
         “affiliates,” as that term is defined under Rule 144 of the Securities Act, may be sold only in compliance with the limitations
         described below. The remaining outstanding shares of common stock will be deemed “restricted securities” as that term is
         defined under Rule 144. Restricted securities may be sold in the public market only if registered or if they qualify for an
         exemption from registration under Rule 144 under the Securities Act, which are summarized below.

             Rule 144. The availability of Rule 144 will vary depending on whether restricted shares are held by an affiliate or a
         non-affiliate. Under Rule 144 as in effect on the date of this prospectus, once we have been a reporting company subject to
         the reporting requirements of Section 13 or Section 15(d) of the Exchange Act for 90 days, an affiliate who has beneficially
         owned restricted shares of our common stock for at least six months would be entitled to sell within any three-month period
         a number of shares that does not exceed the greater of either of the following:

              •     1% of the number of shares of common stock then outstanding, which will equal           shares immediately after this
                    offering (or     shares if the underwriters‟ over-allotment option is exercised in full); and



              •     the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a
                    notice on Form 144 with respect to the sale.

             However, the six month holding period increases to one year in the event we have not been a reporting company for at
         least 90 days. In addition, any sales by affiliates under Rule 144 are also limited by manner of sale provisions and notice
         requirements and the availability of current public information about us.

             The volume limitation, manner of sale and notice provisions described above will not apply to sales by non-affiliates. For
         purposes of Rule 144, a non-affiliate is any person or entity who is not our affiliate at the time of sale and has not been our
         affiliate during the preceding three months. Once we have been a reporting company for 90 days, a non-affiliate who has
         beneficially owned restricted shares of our common stock for six months may rely on Rule 144 provided that certain public
         information regarding us is available. The six month holding period increases to one year in the event we have not been a
         reporting company for at least 90 days. However, a non-affiliate who has beneficially owned the restricted shares proposed
         to be sold for at least one year will not be subject to any restrictions under Rule 144 regardless of how long we have been a
         reporting company.

             Rule 701. Under Rule 701, common stock acquired upon the exercise of certain currently outstanding options or
         pursuant to other rights granted under our stock plans may be resold, to the extent not subject to lock-up agreements, (1) by
         persons other than affiliates, beginning 90 days after the effective date of this offering, subject only to the manner-of-sale
         provisions of Rule 144, and (2) by affiliates, subject to the manner-of-sale, current public information and filing
         requirements of Rule 144, in each case, without compliance with the one-year holding period requirement of Rule 144.

            Form S-8 Registration Statements. We intend to file one or more registration statements on Form S-8 under the
         Securities Act following this offering to register our shares of common stock that are issuable pursuant to our equity
         compensation plans. These registration statements are expected to become effective


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         upon filing. Shares covered by these registration statements will then be eligible for sale in the public markets, subject to any
         applicable lock-up agreements and to Rule 144 limitations applicable to affiliates.

             Lock-Up Agreements. We, our officers, directors and certain of our existing security holders have agreed with the
         underwriters not to sell, dispose of or hedge any of their common stock or securities convertible into or exchangeable for
         shares of common stock, during the period from the date of this prospectus continuing through the date 180 days after the
         date of this prospectus, except with the prior written consent of the representatives of the underwriters.

             The 180-day restricted period described in the preceding paragraph will be automatically extended if: (1) during the last
         17 days of the 180-day restricted period we issue an earnings release or announce material news or a material event; or
         (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the
         16-day period beginning on the last day of the 180-day period, in which case, the restrictions described in the preceding
         paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release
         of the announcement of the material news or material event. See “Underwriting.”



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            MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR NON-UNITED STATES
                                     HOLDERS OF OUR COMMON STOCK


              The following is a general discussion of certain material United States federal income tax consequences relating to the
         ownership and disposition of our common stock by a non-United States holder (as defined below) that acquires our common
         stock in this offering and holds such common stock as a capital asset for United States federal income tax purposes
         (generally, property held for investment). This discussion is not a complete analysis of all the potential tax consequences
         relating to the ownership and disposition of our common stock and does not constitute tax advice. For purposes of this
         discussion, a non-United States holder is any beneficial owner of our common stock (other than an entity or arrangement that
         is treated as a partnership for United States federal income tax purposes) that is not, for United States federal income tax
         purposes, a “United States person.” For purposes of this discussion, the term United States person means:

              •     an individual citizen or resident of the United States;

              •     a corporation (or other entity taxable as a corporation for United States federal income tax purposes) created or
                    organized in the United States or under the laws of the United States or any state thereof, including the District of
                    Columbia;

              •     an estate whose income is subject to United States federal income tax regardless of its source; or

              •     a trust (x) if a court within the United States is able to exercise primary supervision over the administration of the
                    trust and one or more United States persons have the authority to control all substantial decisions of the trust or
                    (y) which has made a valid election to be treated as a United States person under applicable United States Treasury
                    Regulations.

             If a partnership (or an entity treated as a partnership for United States federal income tax purposes) holds our common
         stock, the tax treatment of a partner will generally depend on the status of the partner and upon the activities of the
         partnership. Partnerships which hold our common stock and partners in such partnerships should consult their own tax
         advisors.

             This discussion does not address all aspects of United States federal income taxation that may be relevant in light of a
         non-United States holder‟s special tax status or special circumstances. Former citizens or residents of the United States,
         insurance companies, tax-exempt organizations, partnerships or other pass-through entities for United States federal income
         tax purposes, dealers in securities, banks or other financial institutions and investors that hold our common stock as part of a
         hedge, straddle or conversion transaction are among those categories of potential investors that are subject to special rules
         not covered in this discussion. Furthermore, this discussion does not address any aspects of United States federal estate or
         gift taxation or tax consequences arising under the laws of any state, local or non-United States taxing jurisdiction.

             This discussion is based on the Internal Revenue Code of 1986, as amended, or the “Code,” and Treasury Regulations
         and administrative and judicial interpretations thereof, all as in effect on the date hereof, and all of which are subject to
         change, possibly with retroactive effect. No ruling has been or will be sought from the Internal Revenue Service, or the
         “IRS,” with respect to the matters discussed below, and there can be no assurance that the IRS will not take a contrary
         position regarding the tax consequences of the ownership or disposition of our common stock, or that any such contrary
         position would not be sustained by a court. Each non-United States holder should consult its own tax advisors regarding the
         United States federal, state, local and non-United States income and other tax consequences of acquiring, holding and
         disposing of our common stock.


         Distributions on common stock

             Distributions on our common stock generally will constitute dividends for United States federal income tax purposes to
         the extent paid from our current or accumulated earnings and profits, as determined under United States federal income tax
         principles. To the extent those distributions exceed our current and accumulated earnings and profits, they will constitute a
         return of capital and will first reduce a holder‟s adjusted tax basis in the common stock, but not below zero, and then the
         excess, if any, will be treated as gain from the sale of the common stock, subject to treatment as described below under
         “—Gain on disposition of common stock.”


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             As discussed under “Dividend Policy” above, we do not currently expect to pay dividends. In the event we do pay
         dividends, dividends paid to a non-United States holder generally will be subject to withholding of United States federal
         income tax either at a rate of 30% of the gross amount of the dividends or such lower rate as may be specified by an
         applicable income tax treaty. In order to receive a reduced treaty rate, a non-United States holder must provide to us or our
         paying agent prior to the payment of dividends a valid IRS Form W-8BEN or other successor form certifying qualification
         for the reduced rate.

             Dividends received by a non-United States holder that are effectively connected with a United States trade or business
         conducted by the non-United States holder (and, if a treaty applies, attributable to the non-United States holder‟s United
         States permanent establishment or fixed base) are exempt from such withholding tax. In order to obtain this exemption, a
         non-United States holder must provide a valid IRS Form W-8ECI or other successor form properly certifying such
         exemption. However, such effectively connected dividends are generally taxed on a net income basis at the same graduated
         rates that would be applicable if the non-United States holder were a United States person, subject to an applicable treaty
         providing otherwise. In addition to the graduated tax, dividends received by a corporate non-United States holder that are
         effectively connected with a United States trade or business of such holder may also be subject to a branch profits tax at a
         rate of 30% or such lower rate as may be specified by an applicable tax treaty.

             A non-United States holder may obtain a refund of any excess amounts withheld if an appropriate claim for refund is
         filed timely with the IRS. If a non-United States holder holds our common stock through a foreign partnership or a foreign
         intermediary, the foreign partnership or foreign intermediary will also be required to comply with additional certification
         requirements under applicable Treasury Regulations.


         Gain on disposition of common stock

             A non-United States holder generally will not be subject to United States federal income tax on any gain realized upon
         the sale or other disposition of our common stock unless:

              •     the gain is effectively connected with a United States trade or business of the non-United States holder and, if a tax
                    treaty applies, is attributable to a United States permanent establishment or fixed base maintained by such
                    non-United States holder;

              •     the non-United States holder is an individual who is present in the United States for a period or periods aggregating
                    183 days or more during the taxable year in which the sale or other disposition occurs and other conditions are
                    met; or

              •     our common stock constitutes a United States real property interest by reason of our status as a “United States real
                    property holding corporation” (“USRPHC”) for United States federal income tax purposes at any time within the
                    shorter of the five-year period preceding the disposition or the holder‟s holding period for our common stock.

             Gain described in the first bullet point above is generally taxed on a net income basis at the same graduated rates that
         would be applicable if the non-United States holder were a United States person. In addition to the graduated tax, gain
         realized by a corporate non-United States holder that is effectively connected with a United States trade or business of such
         holder may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable tax
         treaty. Gain described in the second bullet point above (which may be offset by United States source capital losses) will be
         subject to a flat 30% United States federal income tax. Non-United States holders should consult any applicable income tax
         treaties that may provide for different rules.

             With respect to the third bullet point above, we believe that we are not currently and do not anticipate becoming a
         USRPHC. However, because the determination of whether we are a USRPHC depends on the fair market value of our
         United States real property interests relative to the fair market value of our other business assets and our non-United States
         real property interests, there can be no assurance that we will not become a USRPHC in the future. Even if we become a
         USRPHC, as long as our common stock is regularly traded on an established securities market, within the meaning of the
         applicable Treasury Regulations, such common stock will be treated as a United States real property interest with respect to
         a particular non-United


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         States holder only if such non-United States holder actually or constructively holds more than 5 percent of such regularly
         traded common stock during the applicable period.


         Backup withholding and information reporting

             Generally, we must report annually to the IRS and to each non-United States holder the amount of any dividends paid,
         the name and address of the recipient, and the amount of any tax withheld. These information reporting requirements apply
         even if withholding was not required because the dividends were effectively connected dividends or withholding was
         reduced or eliminated by an applicable tax treaty. Pursuant to tax treaties or other agreements, the IRS may make its reports
         available to tax authorities in the recipient‟s country of residence.

            Backup withholding will generally not apply to payments of dividends to a non-United States holder if the holder has
         properly certified to us or our paying agent that it is not a United States person, such as by providing a valid IRS
         Form W-8BEN or W-8ECI, or has otherwise established an exemption, provided we or the paying agent have no actual
         knowledge or reason to know that the beneficial owner is a United States person.

             Information reporting and backup withholding generally are not required with respect to the amount of any proceeds
         from the sale or other disposition of our common stock by a non-United States holder outside the United States through a
         foreign office of a foreign broker that does not have certain specified connections to the United States. However, payment of
         the proceeds from a disposition by a non-United States holder of common stock made by or through the United States office
         of a broker may be subject to information reporting and backup withholding will apply unless the non-United States holder
         certifies as to its non-United States holder status under penalties of perjury or otherwise establishes an exemption from
         information reporting and backup withholding, provided that the broker has no knowledge or reason to know that the
         beneficial owner is a United States person.

             Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed
         as a refund or a credit against a non-United States holder‟s United States federal income tax liability provided the required
         information is furnished timely to the IRS.


         New Legislation

             Newly enacted legislation may impose withholding taxes on certain types of payments made to “foreign financial
         institutions” and certain other non-United States entities. Under this legislation, the failure to comply with additional
         certification, information reporting and other specified requirements could result in withholding tax being imposed on
         payments of dividends and sales proceeds to foreign intermediaries and certain non-United States holders. The legislation
         imposes a 30% withholding tax on dividends on, or gross proceeds from the sale or other disposition of, our common stock
         paid to a foreign financial institution or to a foreign non-financial entity, unless (i) the foreign financial institution undertakes
         certain diligence and reporting obligations or (ii) the foreign non-financial entity either certifies it does not have any
         substantial United States owners or furnishes identifying information regarding each substantial United States owner. If the
         payee is a foreign financial institution, it must enter into an agreement with the United States Treasury requiring, among
         other things, that it undertake to identify accounts held by certain United States persons or United States-owned foreign
         entities, annually report certain information about such accounts, and withhold 30% on payments to account holders whose
         actions prevent it from complying with these reporting and other requirements. The legislation would apply to payments
         made after December 31, 2012. Prospective investors should consult their tax advisors regarding this legislation.

           THE PRECEDING DISCUSSION OF UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS IS FOR
         GENERAL INFORMATION ONLY. IT IS NOT TAX ADVICE. EACH PROSPECTIVE INVESTOR SHOULD
         CONSULT ITS OWN TAX ADVISORS REGARDING THE PARTICULAR UNITED STATES FEDERAL, STATE,
         LOCAL, AND NON-UNITED STATES TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF
         OUR COMMON STOCK, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE
         LAWS.



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                                                               UNDERWRITERS


             Under the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus, between us,
         the selling stockholders and the underwriters named below, for whom J.P. Morgan Securities LLC (“J.P. Morgan”) and
         Morgan Stanley & Co. Incorporated (“Morgan Stanley”) are acting as representatives, the underwriters have severally agreed
         to purchase and we and the selling stockholders have agreed to sell to them, severally, the number of shares indicated below:


         Nam
         e                                                                                                               Number of Shares


         J.P. Morgan Securities LLC
         Morgan Stanley & Co. Incorporated
            Total


             The underwriters and the representatives are collectively referred to as the “underwriters” and the “representatives,”
         respectively. The underwriters are offering the shares of common stock subject to their acceptance of the shares from the us
         and the selling stockholders and subject to prior sale. The underwriting agreement provides that the obligations of the several
         underwriters to pay for and accept delivery of the shares of common stock offered by this prospectus are subject to the
         approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and
         pay for all of the shares of common stock offered by this prospectus if any such shares are taken. However, the underwriters
         are not required to take or pay for the shares covered by the underwriters‟ over-allotment option described below.

              The underwriters initially propose to offer part of the shares of common stock directly to the public at the offering price
         listed on the cover page of this prospectus and part to certain dealers. After the initial offering of the shares of common
         stock, the offering price and other selling terms may from time to time be varied by the representatives.

             We and the selling stockholders have granted to the underwriters an option, exercisable for 30 days from the date of this
         prospectus, to purchase up to an aggregate of        additional shares of common stock at the public offering price listed on
         the cover page of this prospectus, less underwriting discounts and commissions, to cover over-allotments. The underwriters
         may exercise this option if they sell more shares than the total number of shares set forth in the table above. To the extent the
         option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase about the same
         percentage of the additional shares of common stock as the number listed next to the underwriter‟s name in the preceding
         table bears to the total number of shares of common stock listed next to the names of all underwriters in the preceding table.

             If the underwriters‟ option is exercised in full, the total price to the public of all the shares of common stock sold would
         be $     , the total underwriting discounts and commissions would be $           , the total proceeds to us would be $   and the
         total proceeds to the selling stockholders would be $ .

            The following table shows the per share and total public offering price, underwriting discounts and commissions, and
         proceeds before expenses to us and the selling stockholders. These amounts are shown assuming both no exercise and full
         exercise of the underwriters‟ option to purchase up to an additional      shares of common stock.


                                                                                                                 Total
                                                                                                                                        Full
                                                                                              Per Share      No Exercise              Exercise


         Public offering price                                                                $              $                    $
         Underwriting discounts and commissions to be paid by us                              $              $                    $
         Underwriting discounts and commissions to be paid by the selling stockholders        $              $                    $
         Proceeds, before expenses, to us                                                     $              $                    $
         Proceeds, before expenses, to the selling stockholders                               $              $                    $


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            The estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are
         approximately $ , which includes legal, accounting and printing costs and various other fees associated with registration
         and listing of our common stock.

            The underwriters have informed us that they do not intend sales to discretionary accounts to exceed 5% of the total
         number of shares of common stock offered by them.

             We intend to apply to list our common stock on the New York Stock Exchange under the trading symbol “ADSI.”

             We and our directors and executive officers and the holders of all of our outstanding stock and stock options have agreed
         that, without the prior written consent of J.P. Morgan and Morgan Stanley on behalf of the underwriters, we and they will
         not, during the period ending 180 days after the date of this prospectus:

              •     offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell,
                    grant any option, right or warrant to purchase lend or otherwise transfer or dispose of, directly or indirectly, any
                    shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common
                    stock;

              •     file any registration statement with the SEC relating to the offering of any shares of common stock or any securities
                    convertible into or exercisable or exchangeable for common stock; or

              •     enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
                    consequences of ownership of the common stock,

         whether any such transaction described above is to be settled by delivery of common stock or such other securities, in cash
         or otherwise. In addition, we and each such person agrees that, without the prior written consent of J.P. Morgan and Morgan
         Stanley on behalf of the underwriters, it will not, during the period ending 180 days after the date of this prospectus, make
         any demand for, or exercise any right with respect to, the registration of any shares of common stock or any security
         convertible into or exercisable or exchangeable for common stock.

             The restrictions described in the immediately preceding paragraph to do not apply to:

              •     the sale of shares to the underwriters;

              •     transactions by any person other than us relating to shares of common stock or other securities acquired in open
                    market transactions after the completion of the offering of the shares;

              •     transfers of any shares of common stock or any security convertible into common stock as a bona fide gift, provided
                    certain requirements are met;

              •     dispositions to any trust or partnership for the benefit of a director, executive officer or holder of our outstanding
                    common stock or any immediate family member thereof, provided certain requirements are met;

              •     the transfer of common stock to another corporation, partnership, limited liability company or other business entity
                    so long as the transferee is an affiliate of a director, executive officer or holder of our outstanding common stock and
                    such transfer is not for value, provided certain requirements are met;

              •     distributions of shares of common stock or any security convertible into common stock to limited partners or
                    stockholders of such directors, executive officers and the holders of all of our outstanding stock and stock options
                    referred to above, provided certain requirements are met;

              •     the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of
                    common stock;

              •     the filing of a Form S-8 relating to the offering of securities in accordance with the terms of an equity incentive plan
                    in effect on the date hereof;
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              •     the grant of restricted stock, options, long-term incentive units or other securities pursuant to an equity incentive
                    plan in effect on the date hereof, provided certain requirements are met; or

              •     the issuance of up to 5% of the total number of outstanding shares of common stock in connection with bona fide
                    mergers or acquisitions, joint ventures, commercial relationships or other strategic transactions, provided certain
                    requirements are met.

             The 180 day restricted period described in the preceding paragraph will be automatically extended if:

              •     during the last 17 days of the 180 day restricted period we issue an earnings release or announce material news or a
                    material event relating to us occurs, or

              •     prior to the expiration of the 180 day restricted period, we announce that we will release earnings results during the
                    16 day period beginning on the last day of the 180 day period,

         in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18 day
         period beginning on the issuance of the earnings release or the announcement of the material news or material event.

             In order to facilitate the offering of the common stock, the underwriters may engage in transactions that stabilize,
         maintain or otherwise affect the price of the common stock. Specifically, the underwriters may sell more shares than they are
         obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short
         position is no greater than the number of shares available for purchase by the underwriters under the over-allotment option.
         The underwriters can close out a covered short sale by exercising the over-allotment option or purchasing shares in the open
         market. In determining the source of shares to close out a covered short sale, the underwriters will consider, among other
         things, the open market price of shares compared to the price available under the over-allotment option. The underwriters
         may also sell shares in excess of the over-allotment option, creating a naked short position. The underwriters must close out
         any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the
         underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after
         pricing that could adversely affect investors who purchase in this offering. As an additional means of facilitating this
         offering, the underwriters may bid for, and purchase, shares of common stock in the open market to stabilize the price of the
         common stock. These activities may raise or maintain the market price of the common stock above independent market
         levels or prevent or retard a decline in the market price of the common stock. The underwriters are not required to engage in
         these activities and may end any of these activities at any time.

             We, the selling stockholders and the underwriters have agreed to indemnify each other against certain liabilities,
         including liabilities under the Securities Act or to contribute to payments the underwriters may be required to make because
         of any of those liabilities.

             A prospectus in electronic format may be made available on websites maintained by one or more underwriters, or selling
         group members, if any, participating in this offering. The representatives may agree to allocate a number of shares of
         common stock to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by
         the representatives to underwriters that may make Internet distributions on the same basis as other allocations.

             The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which
         may include securities trading, commercial and investment banking, financial advisory, investment management, investment
         research, principal investment, hedging, financing, cash management and brokerage activities. The underwriters and their
         affiliates have performed and will continue to perform investment banking, commercial banking, hedging, cash management
         and advisory services for us and our affiliates from time to time, including as acting as initial purchasers, book-runners or
         underwriters in our past offerings, for which they have received or may receive customary fees and expenses. In particular,
         affiliates of certain underwriters are lenders under our senior secured revolving credit facility, for which they would be
         entitled to receive their pro rata portion of the proceeds of this offering that are used to repay such facility, as well as certain
         customary breakage fees with respect to Eurodollar rate loans in connection with such


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         repayment. In addition, certain of the underwriters acted as initial purchasers in the issuance of our senior secured notes, for
         which they received customary discounts and commissions. See “Description of Certain Indebtedness.”

         Pricing of the Offering

             Prior to this offering, there has been no public market for our common stock. The initial public offering price was
         determined by negotiations between us and the representatives. Among the factors considered in determining the initial
         public offering price were our future prospects and those of our industry in general, our sales, earnings and certain other
         financial and operating information in recent periods, and the price-earnings ratios, price-sales ratios, market prices of
         securities, and certain financial and operating information of companies engaged in activities similar to ours.

         Directed Share Program

             At our request, the underwriters will reserve up to five percent of the shares of common stock to be issued by the
         company and offered by this prospectus for sale, at the initial public offering price, to directors, officers, employees,
         business associates and related persons of ADS, Inc. If purchased by these persons, these shares will be subject to a 180-day
         lock-up restriction. The lock-up period will be extended if, during the last 17 days of the lock-up period we issue a release
         about earnings or material news or events relating to us occurs; or, prior to the expiration of the lock-up period, we announce
         that we will release earnings results during the 16-day period beginning on the last day of the lock-up period, in which case
         the restrictions described above will continue to apply until the expiration of the 18-day period beginning on the issuance of
         the release or the occurrence of the material news or material event. The number of shares of common stock available for
         sale to the general public will be reduced to the extent these individuals purchase such reserved shares. Any reserved shares
         that are not so purchased will be offered by the underwriters to the general public on the same basis as the other shares
         offered by this prospectus. We have agreed to indemnify           in connection with the directed share program including for
         the failure of any participant to pay for its shares.


         Notice to Prospective Investors in the European Economic Area

             In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive
         (each, a “Relevant Member State”) an offer to the public of any shares which are the subject of the offering contemplated by
         this Prospectus (the “Shares”) may not be made in that Relevant Member State, except that an offer to the public in that
         Relevant Member State of any Shares may be made at any time under the following exemptions under the Prospectus
         Directive, if they have been implemented in that Relevant Member State:

                    (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;

                    (b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD
               Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus
               Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives for
               any such offer; or

                    (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer
               of Shares shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3
               of the Prospectus Directive.

             For the purposes of this provision, the expression an “offer to the public” in relation to any Shares in any Relevant
         Member State means the communication in any form and by any means of sufficient information on the terms of the offer
         and any Shares to be offered so as to enable an investor to decide to purchase any Shares, as the same may be varied in that
         Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus
         Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent
         implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member
         State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.


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         Notice to Prospective Investors in the United Kingdom

             Each underwriter has represented and agreed that:

                  (a) it has only communicated or caused to be communicated and will only communicate or cause to be
               communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the
               FSMA) received by it in connection with the issue or sale of the Shares in circumstances in which Section 21(1) of the
               FSMA does not apply to us; and

                     (b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it
               in relation to the Shares in, from or otherwise involving the United Kingdom.



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                                                              LEGAL MATTERS

            The validity of the shares sold in this offering will be will be passed upon for us by Latham & Watkins LLP, New York,
         New York. Certain legal matters will be passed upon for the underwriters by Davis Polk & Wardwell LLP, New York, New
         York.


                                                                   EXPERTS

             The consolidated financial statements of ADS Tactical, Inc. and subsidiary as of December 31, 2009 and December 31,
         2010 and for each of the years in the three-year period ended December 31, 2010 have been included herein in reliance upon
         the report of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority
         of said firm as experts in accounting and auditing.


                                            WHERE YOU CAN FIND MORE INFORMATION

             This prospectus is part of a registration statement on Form S-1 that we have filed with the SEC under the Securities Act
         covering the common stock we are offering. As permitted by the rules and regulations of the SEC, this prospectus omits
         certain information contained in the registration statement. For further information with respect to us and our common stock,
         you should refer to the registration statement and to its exhibits and schedules. We make reference in this prospectus to
         certain of our contracts, agreements and other documents that are filed as exhibits to the registration statement. For
         additional information regarding those contracts, agreements and other documents, please see the exhibits attached to this
         registration statement.

              You can read and copy the registration statement and the exhibits and schedules filed with the registration statement or
         any reports, statements or other information we have filed or file, at the public reference facilities maintained by the SEC at
         100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents from such offices upon payment
         of the prescribed fees. You may call the SEC at 1-800-SEC-0330 for further information on the operation of the public
         reference room. You may also request copies of the documents upon payment of a duplicating fee by writing to the SEC. In
         addition, the SEC maintains a web site that contains reports and other information regarding registrants (including us) that
         file electronically with the SEC, which you can access at http://www.sec.gov .

             In addition, you may request copies of this filing and such other reports as we may determine or as the law requires at no
         cost, by telephone at (901) 419-7130, or by mail to ADS, Inc., 621 Lynnhaven Parkway, Suite 400, Virginia Beach, Virginia
         23452. Our website address is http://www.adsinc.com . Information on our website is not considered part of this prospectus.


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                                             ADS TACTICAL, INC. AND SUBSIDIARY
                                                   Financial Statement Index


                                                                                                                Page


         Report of Independent Registered Public Accounting Firm                                                F-2
         Consolidated Financial Statements:
           Consolidated Balance Sheets as of December 31, 2009 and 2010                                         F-3
           Consolidated Statements of Operations for the years ended December 31, 2008, 2009, and 2010          F-4
           Consolidated Statements Stockholders‟ Equity for the years ended December 31, 2008, 2009, and 2010   F-5
           Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2009, and 2010          F-6
         Notes to Consolidated Financial Statements                                                             F-7


                                                                  F-1
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         When the transaction referred to in note 13(b) of the notes to consolidated financial statements has been consummated,
         we will be in a position to render the following report.


         /s/ KPMG LLP


                                         Report of Independent Registered Public Accounting Firm


         The Board of Directors
         ADS Tactical, Inc.:

             We have audited the accompanying consolidated balance sheets of ADS Tactical, Inc. and subsidiary (the Company) as
         of December 31, 2009 and 2010, and the related consolidated statements of operations, stockholders‟ equity, and cash flows
         for each of the years in the three-year period ended December 31, 2010. These consolidated financial statements are the
         responsibility of the Company‟s management. Our responsibility is to express an opinion on these consolidated financial
         statements based on our audits.

             We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
         States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
         consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
         supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the
         accounting principles used and significant estimates made by management, as well as evaluating the overall financial
         statement presentation. We believe that our audits provide a reasonable basis for our opinion.

            In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
         position of ADS Tactical, Inc. and subsidiary as of December 31, 2009 and 2010, and the results of their operations and their
         cash flows for each of the years in the three-year period ended December 31, 2010, in conformity with U.S. generally
         accepted accounting principles.


         Norfolk, Virginia
         March 12, 2011, except as to note 13(a), which is as of April 5, 2011
           and note 13(b), which is as of      , 2011


                                                                        F-2
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                                                  ADS TACTICAL, INC. AND SUBSIDIARY

                                                            Consolidated Balance Sheets
                                                            December 31, 2009 and 2010


                                                                                                    2009          2010


                                                                     Assets
         Current assets:
           Cash and cash equivalents                                                          $     1,355,414      2,810,093
           Accounts receivable, net                                                               119,863,686    171,353,312
           Inventories                                                                             60,844,076     87,345,649
           Prepaid expenses and other current assets                                                2,100,513      2,276,871
             Total current assets                                                                 184,163,689    263,785,925
         Property and equipment, net                                                               16,884,085     19,212,282
         Due from affiliates                                                                          635,361        239,687
         Other assets                                                                                 246,307      2,861,606
               Total assets                                                                   $   201,929,442    286,099,500

                                                      Liabilities and Stockholders’ Equity
         Current liabilities:
           Line of credit                                                                     $     23,175,000    90,154,626
           Current portion of long-term debt                                                         9,297,072    21,097,261
           Accounts payable                                                                         86,130,676   115,067,593
           Accrued expenses                                                                          5,173,515     6,680,454
           Deferred revenue                                                                            504,411       139,036
             Total current liabilities                                                            124,280,674    233,138,970
         Long-term debt, excluding current portion                                                 12,193,322     37,573,067
               Total liabilities                                                                  136,473,996    270,712,037
         Stockholders‟ equity:
           Common stock (no par value; 300,000 shares authorized; outstanding
             148,140 shares)                                                                                —             —
           Additional paid-in capital                                                                   63,324        63,324
           Retained earnings                                                                        63,097,764    11,368,460
              Total equity attributable to ADS Tactical, Inc.                                       63,161,088    11,431,784
            Noncontrolling interests                                                                 2,294,358     3,955,679
               Total stockholders‟ equity                                                           65,455,446    15,387,463
               Total liabilities and stockholders‟ equity                                     $   201,929,442    286,099,500


                                            See accompanying notes to consolidated financial statements.


                                                                        F-3
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                                                   ADS TACTICAL, INC. AND SUBSIDIARY

                                                     Consolidated Statements of Operations
                                                  Years ended December 31, 2008, 2009, and 2010


                                                                                2008                2009             2010


         Net sales                                                       $     660,535,126        932,177,116      1,330,839,600
         Cost of goods sold                                                    572,992,387        809,116,969      1,166,391,155
                 Gross profit                                                   87,542,739        123,060,147       164,448,445
         Selling, general, and administrative expenses                          44,322,361         60,897,157        80,944,623
         Intangible asset impairment                                                    —           2,996,025                —
                    Income from operations                                      43,220,378         59,166,965        83,503,822
         Other income (expense):
           Interest income                                                         225,129              84,211           127,306
           Interest expense                                                     (1,481,896 )        (1,401,361 )      (5,388,081 )
                                                                                (1,256,767 )        (1,317,150 )      (5,260,775 )
                Net income                                                      41,963,611         57,849,815        78,243,047
         Net income (loss) attributable to noncontrolling interests                (46,576 )          141,292           961,321
                    Net income attributable to ADS Tactical, Inc.        $      42,010,187         57,708,523        77,281,726

         Pro forma net income and net income per share
           information:
              Net income attributable to ADS Tactical, Inc.              $      42,010,187         57,708,523        77,281,726
              Pro forma provision for income taxes (unaudited)                  16,594,024         22,794,867        30,912,690
                    Pro forma net income (unaudited)                     $      25,416,163         34,913,656        46,369,036

               Pro forma net income per share after giving effect to
                 stock split (note 13(b)):
                 Basic and diluted (unaudited)                           $
               Pro forma weighted average shares outstanding after
                 giving effect to stock split (unaudited)
                 (note 13(b))

                                             See accompanying notes to consolidated financial statements.


                                                                         F-4
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                                                    ADS TACTICAL, INC. AND SUBSIDIARY

                                                  Consolidated Statements of Stockholders’ Equity
                                                   Years ended December 31, 2008, 2009, and 2010

                                                                                            Equity
                                                        Additional                       attributable
                                    Common stock         paid-in        Retained            to ADS            Noncontrolling
                                              Amoun
                                   Shares        t       capital        earnings         Tactical, Inc.          interests          Total


         Balance, January 1,
           2008                    148,140    $    —        63,324        18,212,333          18,275,657                    —        18,275,657
         Net income (loss)              —          —            —         42,010,187          42,010,187               (46,576 )     41,963,611
         Distributions declared
           to stockholders              —          —               —     (23,268,989 )       (23,268,989 )                   —      (23,268,989 )
         Capital contributions —
           noncontrolling
           interests                                                                                                1,215,554         1,215,554

         Balance, December 31,
           2008                    148,140         —        63,324        36,953,531          37,016,855            1,168,978        38,185,833
         Net income                     —          —            —         57,708,523          57,708,523              141,292        57,849,815
         Distributions declared
           to stockholders              —          —               —     (31,564,290 )       (31,564,290 )                   —      (31,564,290 )
         Capital contributions —
           noncontrolling
           interests                    —          —               —               —                      —           984,088           984,088

         Balance, December 31,
           2009                    148,140         —        63,324        63,097,764          63,161,088            2,294,358        65,455,446
         Net income                     —          —            —         77,281,726          77,281,726              961,321        78,243,047
         Distributions paid to
           stockholders                 —          —               —    (129,011,030 )     (129,011,030 )                    —     (129,011,030 )
         Capital contributions —
           noncontrolling
           interests                    —          —               —               —                      —           700,000           700,000

         Balance, December 31,
           2010                    148,140    $    —        63,324        11,368,460          11,431,784            3,955,679        15,387,463



                                             See accompanying notes to consolidated financial statements.


                                                                         F-5
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                                                     ADS TACTICAL, INC. AND SUBSIDIARY

                                                       Consolidated Statements of Cash Flows
                                                    Years ended December 31, 2008, 2009, and 2010


                                                                                           2008            2009            2010


         Cash flows from operating activities:
           Net income                                                                 $   41,963,611      57,849,815        78,243,047
           Adjustments to reconcile net income to net cash provided by
             operating activities:
             Depreciation and amortization                                                  2,049,355       2,140,410          974,476
             Amortization of deferred financing costs                                              —               —           537,143
             Intangible asset impairment                                                           —        2,996,025               —
             Loss (gain) on sale of property and equipment                                         —          (52,439 )         53,580
             Changes in operating assets and liabilities, net of acquisition:
                 Accounts receivable                                                      (12,093,694 )   (53,052,113 )    (51,489,626 )
                 Inventories                                                              (21,467,717 )    (8,497,009 )    (26,501,573 )
                 Prepaid expenses and other assets                                           (394,646 )       (76,941 )       (153,505 )
                 Accounts payable                                                           7,923,746      32,058,689       28,936,917
                 Accrued expenses                                                           1,463,664       1,420,598        1,506,939
                 Deferred revenue                                                          (3,551,190 )       504,411         (365,375 )

                    Net cash provided by operating activities                             15,893,129      35,291,446        31,742,023

         Cash flows from investing activities:
           Purchases of property and equipment                                             (8,297,070 )    (9,181,467 )     (3,386,682 )
           Proceeds from sale of property and equipment                                        11,500         523,161           44,100
           Advances from (to) affiliated companies and stockholders                        (1,852,352 )     2,072,282          395,674
           Purchase of subsidiary, net of cash acquired of $750,387                        (4,749,613 )            —                —

                    Net cash used in investing activities                                 (14,887,535 )    (6,586,024 )     (2,946,908 )

         Cash flows from financing activities:
           Net proceeds from line of credit                                                21,539,000       1,636,000       66,979,626
           Proceeds from long-term debt                                                     6,290,612       6,400,000       51,489,436
           Principal payments on long-term debt                                            (3,072,903 )    (5,339,135 )    (14,309,502 )
           Cash paid for debt issuance costs                                                       —               —        (3,188,966 )
           Cash distributions to stockholders                                             (25,480,689 )   (33,227,590 )   (129,011,030 )
           Capital contributions from stockholders — noncontrolling interests               1,215,554         984,088          700,000

                    Net cash provided by (used in) financing activities                      491,574      (29,546,637 )    (27,340,436 )

                   Net increase (decrease) in cash and cash equivalents                     1,497,168        (841,215 )      1,454,679
         Cash and cash equivalents, beginning of year                                         699,461       2,196,629        1,355,414

         Cash and cash equivalents, end of year                                       $     2,196,629       1,355,414        2,810,093

         Supplemental disclosure of cash flow information:
           Interest paid during year                                                  $     1,482,994       1,388,288        4,533,373

                                             See accompanying notes to consolidated financial statements.


                                                                                F-6
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                                                 ADS TACTICAL, INC. AND SUBSIDIARY

                                                 Notes to Consolidated Financial Statements
                                                     December 31, 2008, 2009, and 2010


         (1)        Organization and Nature of Business

             On October 2, 2009, Tactical Holdcorp, Inc., a Virginia corporation having no separate operations, acquired all the stock
         of Atlantic Diving Supply, Inc. (ADS, Inc.) at which time ADS, Inc. became a wholly owned subsidiary of Tactical
         Holdcorp, Inc. The stockholders of Tactical Holdcorp, Inc. are the same as the stockholders of ADS, Inc. In June 2010,
         Tactical Holdcorp, Inc. changed its name to ADS Tactical, Inc.

             ADS, Inc., a Virginia corporation, was incorporated in 1997 and commenced operations on September 18, 1997 and is a
         leading provider of value-added logistics and supply chain solutions specializing in tactical and operational equipment. ADS,
         Inc. operates between a fragmented base of vendors and a decentralized group of customers. Most of ADS, Inc.‟s customers
         are within the Department of Defense and the Department of Homeland Security. The products ADS, Inc. offers include
         apparel, expeditionary equipment, optical equipment, communications equipment, emergency medical supplies, lighting,
         eyewear, and other items.

            On June 7, 2008, all of the outstanding stock of Mar-Vel International, Inc. (Mar-Vel) was purchased by ADS, Inc.
         Mar-Vel, a New Jersey corporation and wholly owned subsidiary of ADS, Inc., sells underwater equipment to
         environmental, commercial, and retail customers, principally in the United States.

            Tactical Exporters, Inc., a Delaware corporation, was incorporated in 2008 to facilitate the foreign distribution of
         products.

             ADS Tactical, Inc., ADS, Inc., Mar-Vel, Tactical Exporters, Inc., and the consolidated variable interest entities (VIEs)
         discussed in note 11 are collectively referred to as ADS or the Company.


         (2)        Summary of Significant Accounting Policies

            (a) Basis of Consolidation

             The consolidated financial statements include the accounts of ADS Tactical, Inc. and its direct and indirect subsidiaries.
         In accordance with the Variable Interest Entity Subsections of Financial Accounting Standards Board (FASB) Accounting
         Standards Codification (ASC) Subtopic 810-10, Consolidation — Overall (FASB Interpretation No. 46(R), Consolidation of
         Variable Interest Entities ), the Company also consolidates any VIEs of which it is the primary beneficiary, as defined. All
         material intercompany transactions and balances have been eliminated in the preparation of these consolidated financial
         statements.


            (b) Revenue Recognition

             The Company recognizes revenue when products are shipped and the customer takes ownership and assumes risk of loss,
         collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and sales price is fixed and
         determinable. Revenue is recognized under contracts only when funding authorization from the U.S. government has been
         received. Shipping and transportation costs charged to customers are recorded in both sales and selling, general, and
         administrative expenses.

             The Company evaluates whether it is appropriate to record product sales and related costs on a gross or net basis in
         accordance with ASC 605-45, Principal Agent Considerations . Management uses judgment in its consideration, including
         whether the Company is primarily obligated in a transaction, subject to inventory risk, has latitude in establishing prices and
         suppliers, and other factors or indicators that support the determination of whether it has acted as a principal or agent in the
         related transaction.

             Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and are
         therefore excluded from net sales in the consolidated statements of operations.
F-7
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                                                ADS TACTICAL, INC. AND SUBSIDIARY

                                         Notes to Consolidated Financial Statements — (Continued)
                                                    December 31, 2008, 2009, and 2010


            Substantially all of the Company‟s revenues are derived from net sales of a single major product group, tactical and
         operational equipment. Disclosure of additional information regarding aggregate sales of individual products or categories of
         similar products within this major product group is impracticable.


            (c) Cash and Cash Equivalents

            The Company considers all highly liquid investments with a remaining maturity of three months or less at the time of
         purchase to be cash equivalents. These cash equivalents consist primarily of term deposits and certificates of deposit. Cash
         equivalents are stated at cost, which approximates market value.

             Outstanding checks in excess of funds on deposit (book overdrafts) totaled $7,828,561 and $19,520,370 at December 31,
         2009 and 2010, respectively, and are included in accounts payable in the Company‟s consolidated balance sheets. Changes
         in the Company‟s book overdraft are included in net cash provided by operating activities in the consolidated statements of
         cash flows.


            (d) Credit Risk

             At various times during the year, the Company has cash deposits in financial institutions in excess of the amount insured
         by agencies of the federal government. In assessing this credit risk, the Company periodically evaluates the stability of these
         financial institutions.


            (e) Business Concentration

             The Company‟s revenues are dependent upon the government renewing contracts with the Company and the Company‟s
         ability to obtain new contracts. Approximately 95% of the Company‟s net sales are derived from multiple federal, state, and
         local government agencies under various contracts that terminate at various times through 2015.


            (f) Accounts Receivable

             Accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts
         receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. In
         determining whether an allowance for doubtful accounts is required, management considers the customer‟s financial
         condition, the current receivables aging, and current payment patterns. Past due balances over 90 days and over a specified
         amount are reviewed individually for collectibility. The allowance for doubtful accounts was $0 and $400,000 at
         December 31, 2009 and 2010, respectively. The Company does not have any off-balance-sheet credit exposure related to its
         customers.


            (g) Inventories

             Inventories consist of tactical and operational equipment produced and manufactured by other parties and are stated at
         the lower of cost or market. Cost is determined by the first-in, first-out basis.


            (h) Property and Equipment

             Property and equipment are stated at cost. Expenditures for repairs and maintenance are charged to expense as incurred.
         Additions and betterments are capitalized. The cost and related accumulated depreciation on property and equipment sold or
         otherwise disposed of are removed from the accounts, and any gain or loss is reported as current year revenue or expense.
F-8
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                                                    ADS TACTICAL, INC. AND SUBSIDIARY

                                            Notes to Consolidated Financial Statements — (Continued)
                                                       December 31, 2008, 2009, and 2010


            Depreciation is generally provided for using the straight-line method over the estimated useful lives as follows for the
         major classes of assets:


         Software                                                                                                                   3 years
         Transportation equipment                                                                                                   5 years
         Office equipment, furniture, and fixtures                                                                               5-10 years
         Building and improvements                                                                                               5-39 years


            (i) New Accounting Pronouncements

             In June 2009, the FASB issued updated guidance, which amends guidance for determining whether an entity is a VIE
         and requires the performance of a qualitative rather than a quantitative analysis to determine the primary beneficiary of a
         VIE. Under this guidance, an entity would be required to consolidate a VIE if it has (i) the power to direct the activities that
         most significantly impact the entity‟s economic performance and (ii) the obligation to absorb losses of the VIE or the right to
         receive benefits from the VIE that could be significant to the VIE. The Company‟s adoption of this guidance on January 1,
         2010 did not have a material impact on the consolidated financial statements.


            (j) Fair Value of Financial Instruments

             During 2008 and 2009, the Company adopted guidance for accounting for fair value measurements of financial assets
         and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in
         the consolidated financial statements. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation
         techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets
         for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant
         unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

              •     Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has
                    the ability to access at the measurement date.

              •     Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
                    liability, either directly or indirectly.

              •     Level 3 inputs are unobservable inputs for the asset or liability.

             The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest
         level input that is significant to the fair value measurement in its entirety.

             Fair value is the price that would be received for an asset or paid to transfer a liability (an exit price) in the Company‟s
         principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the
         measurement date.

              Management of the Company believes that the carrying amount of its financial instruments, including cash and cash
         equivalents, accounts receivable, prepaid expenses and other assets, accounts payable, and accrued expenses, approximate
         fair value due to the relative short maturity of these instruments. Borrowings under the line of credit bear a variable interest
         rate, and therefore, the carrying amounts of these borrowings approximate fair value. Fair values for long-term debt
         arrangements are not readily available, but the Company estimates that the carrying values for these arrangements
         approximate fair value based on discounted cash flows using current market interest rates for debt with similar terms.


                                                                           F-9
Table of Contents



                                                ADS TACTICAL, INC. AND SUBSIDIARY

                                        Notes to Consolidated Financial Statements — (Continued)
                                                   December 31, 2008, 2009, and 2010


            (k) Long-Lived Assets

             Long-lived assets, such as property and equipment, and purchased intangible assets subject to amortization, are reviewed
         for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
         recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first
         compares the undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the
         carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized equal to the amount
         by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are not depreciated
         and are reported at the lower of the carrying amount or fair value, less costs to sell.


            (l) Selling, General, and Administrative Expenses

             Selling, general, and administrative expenses include wages, rent, insurance, utilities, delivery costs, warehouse
         distribution costs, repairs and maintenance of equipment, and other general administrative expenses.

            Shipping and handling costs and expenses related to freight of $6,280,480, $7,082,717, and $11,762,205 for
         December 31, 2008, 2009 , and 2010, respectively, are included in selling, general, and administrative expenses.

             During 2008, 2009, and 2010, the Company incurred costs of $0, $874,135, and $7,838,379, which principally consisted
         of professional fees in connection with a proposed initial public offering of common stock and the pursuit of other strategic
         opportunities and financings. These costs are included in selling, general, and administrative expenses.


            (m) Advertising, Marketing, and Promotional Costs

            The Company follows the policy of charging the costs of advertising, marketing, and promotions to expense as incurred.
         These costs were $1,873,463, $2,244,845, and $3,700,087 in 2008, 2009, and 2010, respectively, and are included in selling,
         general, and administrative expenses.


            (n) Use of Estimates

             The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make
         estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
         liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the
         reporting period. Actual results could differ from those estimates and may have an impact on future periods.


            (o) Income Taxes

             The Company has elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those
         provisions, the Company does not pay federal or state income taxes on its taxable income. Instead, the stockholders are
         liable for individual federal and state income taxes on their respective share of the Company‟s income or loss.


            (p) Subsequent Events

             In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential
         recognition or disclosure through April 5, 2011, the date the consolidated


                                                                      F-10
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                                                  ADS TACTICAL, INC. AND SUBSIDIARY

                                            Notes to Consolidated Financial Statements — (Continued)
                                                       December 31, 2008, 2009, and 2010


         financial statements were available to be issued, and determined that, except as described herein, there are no other items to
         disclose.


         (3)        Property and Equipment

               Property and equipment consist of the following at December 31, 2009 and 2010:


                                                                                                      2009                  2010


         Building and improvements                                                              $    12,833,560            13,467,834
         Land                                                                                         2,979,892             2,979,892
         Software                                                                                     2,575,371             2,646,001
         Transportation equipment                                                                        98,658               183,208
         Office equipment, furniture, and fixtures                                                    1,992,520             2,923,036
         Construction in progress                                                                            —              1,454,395
                                                                                                     20,480,001            23,654,366
         Less — accumulated depreciation                                                             (3,595,916 )          (4,442,084 )
                                                                                                $    16,884,085            19,212,282


               Depreciation expense was $1,212,776, $1,274,983, and $974,476 for 2008, 2009, and 2010, respectively.


         (4)        Intangible Assets

             On June 7, 2008, the Company purchased 100% of the stock of Mar-Vel. The aggregate purchase price was $5,500,000.
         The Company purchased Mar-Vel primarily to obtain available contract capacity under its largest contract. The acquisition
         was accounted for using the purchase price method of accounting in accordance with accounting standards governing FASB
         ASC Topic 805, Business Combinations . The Company‟s final purchase allocation related to the Mar-Vel acquisition is as
         follows:


         Fair value of tangible assets:
           Current assets                                                                             $      3,043,987
           Other assets                                                                                          5,182
         Fair value of intangible asset:
           Amortizable sales contract                                                                        4,698,031
                Total assets acquired                                                                        7,747,200
         Current liabilities                                                                                 2,110,360
         Long-term debt                                                                                        136,840
                Total liabilities assumed                                                                    2,247,200
                Total purchase price                                                                  $      5,500,000


             For financial reporting purposes, the intangible asset sales contract of $4,698,031 was being amortized over the
         remaining 38 months (including renewal option) of the contract term. Amortization expense was $836,579, $865,427, and $0
         for 2008, 2009, and 2010, respectively. In 2009, ADS, Inc. was awarded a similar contract; consequently, the renewal option
on the sales contract obtained in the Mar-Vel acquisition was not exercised. Therefore, the remaining unamortized portion of
the Mar-Vel sales contract of $2,996,025 has been recorded as an impairment loss included in operating expenses in 2009.


                                                           F-11
Table of Contents



                                                 ADS TACTICAL, INC. AND SUBSIDIARY

                                         Notes to Consolidated Financial Statements — (Continued)
                                                    December 31, 2008, 2009, and 2010


         (5)        Line of Credit

             ADS, Inc. had a bank operating line of credit providing for borrowings of up to $45,000,000, bearing interest at LIBOR
         plus 2.00% (2.23% at December 31, 2009) and due on demand. The note had a stated maturity of October 13, 2009 and was
         temporarily extended through February 28, 2010. The note was secured by a general security agreement covering all the
         assets of ADS, Inc., the carrying value of which totaled $188,863,034 at December 31, 2009. The outstanding balance on
         this line of credit was $23,175,000 at December 31, 2009. The agreement, among other things, required the maintenance of
         certain specified financial ratios. At December 31, 2009, the Company was in compliance with its financial covenants.

              On February 18, 2010, the Company entered into a senior secured revolving credit facility, which replaced the previous
         line of credit. The new facility has a credit limit of $180,000,000 with an optional increase in commitments of up to an
         additional $25,000,000. The facility bears interest at variable rates based on the Eurodollar rate or the bank‟s base rate, and
         in each case includes an applicable margin ranging from 1.25% to 3.25% depending on the average excess availability.
         Interest-only payments are due monthly. The facility matures on February 18, 2013 and was used to repay the outstanding
         balance on the previous line of credit, retire long-term debt (note 6), and is available to fund future operating cash needs of
         the Company. The facility and certain other debt obligations of the Company require the maintenance of certain specified
         financial ratios and provide restrictive covenants that impose other significant operating restrictions, including, but not
         limited to additional indebtedness and distributions to the Company‟s stockholders. The Company was in compliance with
         its financial covenants at December 31, 2010. The facility is secured by a general security agreement covering all the assets
         of the Company. The borrowing capacity under this facility is generally limited to 90% of government accounts receivable,
         85% of commercial accounts receivable, and 65% of inventory, in each case subject to certain limitations. On October 22,
         2010, the facility was amended to allow the Company to enter into a senior secured term loan (note 6). As of December 31,
         2010, and after taking into account outstanding letters of credit of $6,011,589, the Company could have borrowed up to an
         additional $68,788,785 under this facility.


                                                                       F-12
Table of Contents



                                                  ADS TACTICAL, INC. AND SUBSIDIARY

                                          Notes to Consolidated Financial Statements — (Continued)
                                                     December 31, 2008, 2009, and 2010


         (6)        Long-Term Debt

               Long-term debt consists of the following:


                                                                                                  2009               2010


         Note payable to bank; monthly interest-only payments at LIBOR plus 2.00%
           (2.23% at December 31, 2009); fully repaid in 2010 (note 5)                       $    9,000,000                  —
         Senior secured term loan; monthly principal and interest payments beginning
           December 31, 2010; first principal payment of $5,000,000 with subsequent
           monthly payments of $1,730,769, plus interest; variable interest rate at
           Eurodollar rate or bank‟s base rate plus an applicable margin of 4.00% or
           3.00%, respectively; secured by all assets of ADS, Inc.; due February 18, 2013                —          45,000,000
         Mortgage payable to bank on Tactical Office; monthly principal and interest
           payments of $36,000; variable interest rate at LIBOR plus 2.00% subject to a
           4.50% minimum and a 7.85% maximum (4.50% at December 31, 2010);
           secured by the property with a carrying value of $7,149,969 at December 31,
           2010; due February 2034                                                                6,281,495           6,135,398
         Mortgage payable to bank on Tactical Warehouse; monthly principal and interest
           payments of $41,000; fixed interest rate at 6.03%; secured by the property with
           a carrying value of $8,370,445 at December 31, 2010; due July 2033                     6,132,141           6,012,890
         Mortgage payable to bank on Tactical Warehouse; monthly interest payments
           calculated on the outstanding note balance for the first twelve months, with
           monthly principal and interest payments of $23,000 thereafter; fixed interest
           rate at 7.28%; secured by the property with a carrying value of $8,370,445 at
           December 31, 2010; due July 2036                                                              —            1,489,436
         Capital lease obligation payable in monthly installments of $3,174 including
           imputed interest at 8.40%; matures in December 2012                                       76,758              32,604
                                                                                                 21,490,394          58,670,328
         Less current portion                                                                    (9,297,072 )       (21,097,261 )
                                                                                             $   12,193,322         37,573,067


               Estimated future maturities of long-term debt are as follows:


         2011                                                                                                   $   21,097,261
         2012                                                                                                       21,109,807
         2013                                                                                                        3,823,370
         2014                                                                                                          382,536
         2015                                                                                                          404,468
         Thereafter                                                                                                 11,852,886
                                                                                                                $   58,670,328



                                                                        F-13
Table of Contents



                                                 ADS TACTICAL, INC. AND SUBSIDIARY

                                           Notes to Consolidated Financial Statements — (Continued)
                                                      December 31, 2008, 2009, and 2010


         (7)        Retirement Plan

            ADS, Inc. sponsors a 401(k) retirement plan, which covers substantially all employees, as defined in the plan document.
         The Company matches 50% of an employee‟s contribution on the first 4% of salary. The Company made contributions of
         $188,813, $260,362, and $313,741 for 2008, 2009, and 2010, respectively.

             Mar-Vel has a defined contribution 401(k) profit sharing plan. Participants make elective deferrals and catch-up
         contributions, subject to statutory limits. A safe harbor contribution may be made by Mar-Vel based on an annual decision
         and, if made, is required to be 3% of eligible compensation. The profit sharing contribution is discretionary and is computed
         using a class-based formula. Employees with one year of service and having attained the age of 21 are eligible to participate.
         The Company contributed $55,631, $0, and $0 to the Mar-Vel plan in 2008, 2009, and 2010, respectively.


         (8)        Stockholders’ Equity

            (a) Common Stock

             On May 13, 2010, the Company approved a 200-for-1 stock split of the Company‟s no par value common stock and
         concurrently increased the number of authorized shares from 5,000 shares to 300,000 shares. As a result, these consolidated
         financial statements have been retroactively adjusted to reflect this stock split.


            (b) Noncontrolling Interests

             On January 1, 2009, the Company adopted FASB Statement No. 160, Noncontrolling Interests in Consolidated
         Financial Statements — an amendment of ARB No. 51 (included in FASB ASC Topic 810, Consolidation ), which requires
         certain changes to the presentation of the consolidated financial statements. This amendment requires noncontrolling
         interests (previously referred to as minority interests) to be classified in the consolidated statements of operations as part of
         consolidated net income (loss) of $(46,576), $141,292, and $961,321 for the years ended December 31, 2008, 2009, and
         2010, respectively, and to include the accumulated amount of noncontrolling interests in the consolidated balance sheets as
         part of stockholders‟ equity of $2,294,358 and $3,955,679 at December 31, 2009 and 2010, respectively. The amount
         previously reported as net income is now presented as net income attributable to ADS Tactical, Inc. If a change in ownership
         of a consolidated subsidiary results in a loss of control and deconsolidation, any retained ownership interests are remeasured
         with the gain or loss reported in net income.


            (c) Subsequent Distributions Made to Stockholders

             During January 2011, the Company declared and made distributions to stockholders aggregating $10,648,716, primarily
         for income taxes. These distributions were funded by the Company‟s senior secured revolving credit facility (note 5).


                                                                       F-14
Table of Contents



                                                  ADS TACTICAL, INC. AND SUBSIDIARY

                                         Notes to Consolidated Financial Statements — (Continued)
                                                    December 31, 2008, 2009, and 2010


         (9)        Commitments and Contingencies

            (a) Leases

             The Company leases various office and warehouse space under noncancelable operating leases expiring at various dates
         through 2015. Future lease payments due under noncancelable operating leases (with initial or remaining lease terms in
         excess of one year) are as follows:


         2011                                                                                                        $         703,586
         2012                                                                                                                  377,687
         2013                                                                                                                  389,020
         2014                                                                                                                  256,449
         2015                                                                                                                  229,536
                                                                                                                     $       1,956,278


               Rent expense under all leases was $1,364,719, $1,500,726, and $776,248 for 2008, 2009, and 2010, respectively.


            (b) Guarantees

             Mar-Vel is a guarantor on two mortgages totaling approximately $2,000,000 at December 31, 2010 held by one of the
         entities from which the Company leases office and warehouse space.


            (c) Employment Agreement

             The Company has an employment agreement in place that provides for a bonus to an employee in connection with a
         change in control if such change in control is the sale of the company for at least $100,000,000. The bonus payable under the
         agreement is 0.5% of the purchase price over any amounts paid or payable to the employee pursuant to the terms of the
         Transaction Bonus Agreement (note 13(a)).


            (d) Legal Proceedings

             The Company is involved in various claims and legal actions arising in the ordinary course of business. When
         management concludes that it is probable that a liability has been incurred and the amount of the liability can be reasonably
         estimated, it is accrued through a charge to earnings. While the ultimate amount of liability incurred in any of these claims
         and legal actions is dependent on future developments, in management‟s opinion, the ultimate disposition of these matters
         will not have a material adverse effect on the Company‟s financial position, results of operations, or liquidity.


         (10)        Related Party Transactions

             ADS, Inc. sells products to a related wholesale company having common ownership, Tactical Distributors, LLC
         (Tactical Distributors), which are sold to nongovernmental customers. Occasionally, the Company purchases some of its
         products from Tactical Distributors. ADS, Inc. had sales of $1,141,734, $1,775,451, and $1,793,383 to Tactical Distributors
         in 2008, 2009, and 2010, respectively, and purchases from Tactical Distributors of $147,394, $1,415,843, and $541,834 in
         2008, 2009, and 2010, respectively. The Company had accounts receivable of $253,214 and $227,651 and accounts payable
         of $9,409 and $3,828 with Tactical Distributors at December 31, 2009 and 2010, respectively.

             ADS, Inc. is charged for airplane usage, pilots, fuel, and other incidental costs from three related companies, Tactical
         Air, LLC (Tactical Air), Tactical Hawker, LLC (Tactical Hawker), and Tactical Pilot
F-15
Table of Contents



                                                 ADS TACTICAL, INC. AND SUBSIDIARY

                                         Notes to Consolidated Financial Statements — (Continued)
                                                    December 31, 2008, 2009, and 2010


         Operations, LLC (Tactical Pilot), each of which have common ownership. ADS, Inc. purchased $336,547, $779,890, and
         $1,008,668 of services from these three related companies in 2008, 2009, and 2010, respectively. These amounts are
         included in selling, general, and administrative expenses. The Company had accounts payable of $140,317 and $62,572 to
         these three related companies at December 31, 2009 and 2010, respectively.

             ADS, Inc. purchased software from a related software reseller having common ownership, Mythics, Inc. (Mythics), and
         hired this software company to implement and manage a software conversion. ADS, Inc. incurred costs of $113,469, $0, and
         $30,000 for software, development, and implementation services with Mythics in 2008, 2009, and 2010, respectively.

             At times, ADS, Inc. may make short-term advances to Company stockholders and entities owned by Company
         stockholders. Advances to the stockholders and related affiliates do not bear interest and are generally settled on a quarterly
         basis. ADS, Inc. had advances included in due from affiliates of $635,361 and $239,687 at December 31, 2009 and 2010,
         respectively, as a result of these advances.


         (11)       Variable Interest Entities

             The Company evaluates its related parties and other affiliated companies to determine whether such entities may be a
         VIE, and, if a VIE, whether the Company is the primary beneficiary. Generally, an entity is determined to be a VIE when
         either (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest,
         (2) the equity investment at risk is insufficient to finance that entity‟s activities without additional subordinated financial
         support, or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities
         of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The primary
         beneficiary is the entity that has both (1) the power to direct matters that most significantly impact the VIE‟s economic
         performance and (2) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be
         significant to the VIE. The Company considers a variety of factors in identifying the entity that holds the power to direct
         matters that most significantly impact the VIE‟s economic performance including, but not limited to, the ability to direct
         financing, the nature and terms of leasing arrangements, and other operating decisions and activities. The obligation to
         absorb losses and the right to receive benefits when a reporting entity is affiliated with a VIE may be based on ownership,
         contractual, and/or other pecuniary interests in that VIE.

             The Company has determined that, although it has no voting interest in Tactical Warehouse and Tactical Office, these
         entities, which have common ownership with the Company, are VIEs. Their assets consist primarily of land and buildings
         leased to, and used in the operations of the Company, and their liabilities consist primarily of mortgage debt related to such
         land and buildings, which is guaranteed by the Company. The assets of the VIEs can be used only to settle the VIEs‟
         obligations.

             The Company determined that the guarantees of the related mortgage debt and the present value of the minimum lease
         payments in relation to the fair values of the respective assets exposes it to a majority of the risk of the leased assets over
         their remaining economic life and, accordingly, the VIEs are consolidated and


                                                                       F-16
Table of Contents



                                                 ADS TACTICAL, INC. AND SUBSIDIARY

                                           Notes to Consolidated Financial Statements — (Continued)
                                                      December 31, 2008, 2009, and 2010


         reflected in the accompanying consolidated financial statements. A summary of the VIEs at December 31, 2009 and 2010
         and for the years then ended follows:


                                                                                                     2009                 2010


         Cash and cash equivalents                                                             $      317,453               503,220
         Accounts receivable                                                                            4,857                 1,628
         Property and equipment, net                                                               15,308,105            15,718,716
         Other assets                                                                                 126,114             1,599,361
            Total assets                                                                       $   15,756,529            17,822,925

         Accounts payable and accrued expenses                                                 $      192,021                90,485
         Due to ADS, Inc.                                                                             704,901                    —
         Deferred revenue                                                                             151,614               139,037
         Long-term debt                                                                            12,413,635            13,637,724
           Total liabilities                                                                       13,462,171            13,867,246
         Equity                                                                                     2,294,358             3,955,679
            Total liabilities and equity                                                       $   15,756,529            17,822,925

         Operating income                                                                      $     1,689,529            2,759,358
         Operating expenses                                                                            916,059            1,123,249
           Operating income                                                                           773,470             1,636,109
         Other expenses                                                                               632,178               674,788
            Net income                                                                         $      141,292               961,321


            ADS, Inc. incurred $937,000 and $2,091,000 in lease expense to Tactical Warehouse and Tactical Office for the years
         ended December 31, 2009 and 2010, respectively. These expenses and the related income on Tactical Warehouse and
         Tactical Office have been eliminated in consolidation.

             Management has evaluated its other related party transactions (note 10) and determined that Tactical Air, Tactical
         Hawker, and Tactical Pilot are VIEs; however, the Company is not the primary beneficiary and consolidation is not required
         as the Company does not control these related entities.


         (12)       Pro Forma Information (Unaudited)

            (a) Income Taxes

             The pro forma net income was computed under the assumption that the Company will convert from S Corporation status
         to a taxable C Corporation. Prior to such conversion, the Company was not subject to income taxes. The pro forma net
         income, therefore, includes adjustments for income tax expense as if the Company had been a taxable corporation at an
         effective tax rate of 39.5% in 2008 and 2009 and 40.0% in 2010.


            (b) Net Income Per Share

             Basic and diluted net income per common share are computed using the weighted average number of common shares
         outstanding during the year. For the years ended December 31, 2008, 2009, and 2010, the Company had no dilutive
         securities outstanding, and therefore, diluted net income per share is equal to basic net income per share for each year.
F-17
Table of Contents



                                                ADS TACTICAL, INC. AND SUBSIDIARY

                                        Notes to Consolidated Financial Statements — (Continued)
                                                   December 31, 2008, 2009, and 2010


         (13)       Subsequent Events

            (a) Debt Transactions & Transaction Bonus Agreements

             On March 25, 2011, the Company issued $275,000,000 of 11.00% senior secured notes due 2018. The net proceeds of
         the offering were used to make distributions to stockholders of $217,126,251, to repay the existing term loan facility
         (note 6), and to pay cash bonuses (Transaction Bonuses) in recognition of services and contributions of certain members of
         management of the Company pursuant to agreements entered into on March 1, 2011. The aggregate amount of all
         Transaction Bonuses expected to be paid is $9,000,000. Approximately $6,600,000 was payable upon consummation of the
         debt offering, with the remaining $2,400,000 payable upon the earlier of (x) the consummation of a proposed initial public
         offering of common stock and (y) December 31, 2011.

             On March 25, 2011, the Company amended and restated its senior secured revolving credit facility increasing the
         existing credit limit to $200,000,000, with an optional increase in commitments of up to an additional $50,000,000, and
         extending the maturity date to March 25, 2016. The amended facility bears interest at variable rates based on the Eurodollar
         rate or the bank‟s base rate, and in each case includes an applicable margin ranging from 1.25% to 2.75% depending on the
         average excess availability.


            (b) Stock Split

            The consolidated financial statements give retroactive effect to the      for       stock split of the Company‟s
         common stock in connection with an initial public offering.


                                                                     F-18
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© 2010 ADS, Inc. The ADS Logo is a registered trademark of ADS, Inc.
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                                                                    PART II

                                        INFORMATION NOT REQUIRED IN THE PROSPECTUS


         ITEM 13.      Other Expenses of Issuance and Distribution.

            The following table sets forth all expenses other than the underwriting discount, payable by the Registrant in connection
         with the sale of the common shares being registered. All amounts shown are estimates except for the SEC registration fee.


         SEC registration fee                                                                                                $ 11,610
         FINRA fee                                                                                                           $ 10,500
         Legal fees and expenses                                                                                             $      *
         Printing and engraving expenses                                                                                     $      *
         Blue sky fees                                                                                                       $      *
         NYSE fees                                                                                                           $      *
         Transfer agent fees                                                                                                 $      *
         Accounting fees and expenses                                                                                        $      *
         Miscellaneous                                                                                                       $      *
            Total                                                                                                            $        *


         * To be provided by amendment.

         ITEM 14.      Indemnification of Officers and Directors.

             ADS Tactical, Inc. is incorporated under the laws of the state of Delaware.

             Section 145 of the Delaware General Corporation Law, or the “DGCL,” provides that a corporation may indemnify any
         person, including an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or
         completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in
         the right of such corporation), by reason of the fact that such person is or was a director, officer, employee or agent of such
         corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another
         corporation, partnership, joint venture, trust or other enterprise. The indemnity may include expenses (including attorneys‟
         fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with
         such action, suit or proceeding, provided such person acted in good faith and in a manner such person reasonably believed to
         be in or not opposed to the best interests of such corporation, and, with respect to any criminal actions and proceedings, had
         no reasonable cause to believe that his conduct was unlawful. A Delaware corporation may indemnify any person, including
         an officer or director, who was or is, or is threatened to be made, a party to any threatened, pending or contemplated action
         or suit by or in the right of such corporation, under the same conditions, except that such indemnification is limited to
         expenses (including attorneys‟ fees) actually and reasonably incurred by such person, and except that no indemnification is
         permitted without judicial approval if such person is adjudged to be liable to such corporation. Where an officer or director
         of a corporation is successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to above,
         or any claim, issue or matter therein, the corporation must indemnify that person against the expenses (including attorneys‟
         fees) which such officer or director actually and reasonably incurred in connection therewith.

             The amended and restated certificate of incorporation of ADS Tactical, Inc. will provide for the indemnification of
         directors, officers and employees to the fullest extent permitted by the DGCL. In addition, as permitted by the DGCL, the
         amended and restated certificate of incorporation of ADS Tactical, Inc. will provide that none of its directors will be
         personally liable to it or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent
         such exemption from liability or limitation thereof is not permitted under the DGCL as currently in effect or as the same may
         hereafter be amended.


                                                                       II-1
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             The amended and restated bylaws of ADS Tactical, Inc. will provide for the indemnification of all of their respective
         current and former directors and current or former officers to the fullest extent permitted by the DGCL.


         Item 15.       Recent Sales of Unregistered Securities.

             Not applicable


         Item 16.       Exhibits and Financial Statement Schedules.

             (a) Exhibits

                    See the Exhibit Index beginning on page II-4, which follows the signature pages hereof and is incorporated by
               reference.

             (b) Financial Statement Schedules

                    Schedules have been omitted because the information required to be set forth therein is not applicable or is shown
               in the consolidated financial statements or notes thereto.


         Item 17.       Undertakings.

             Insofar as indemnification for liabilities arising under the Securities Act may be permitted as to directors, officers and
         controlling persons of the registrant pursuant to the provisions described in Item 14, or otherwise, we have been advised that
         in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore,
         unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant
         of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any
         action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being
         registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a
         court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the
         Securities Act and will be governed by the final adjudication of such issue.

             The undersigned registrant hereby undertakes that:

                    (1) For purposes of determining any liability under the Securities Act, the information omitted from the form of
               prospectus as filed as part of this registration statement in reliance upon Rule 430A and contained in a form of
               prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
               to be part of this registration statement as of the time it was declared effective.

                    (2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that
               contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered
               therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

                     (3) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the
               initial distribution of the securities:

                         The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant
                    pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the
                    purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications,
                    the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to
                    such purchaser:

                                 (i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering
                            required to be filed pursuant to Rule 424;


                                                                         II-2
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                              (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned
                         registrant or used or referred to by the undersigned registrant;

                              (iii) The portion of any other free writing prospectus relating to the offering containing material
                         information about the undersigned registrant or its securities provided by or on behalf of the undersigned
                         registrant; and

                             (iv) Any other communication that is an offer in the offering made by the undersigned registrant to the
                         purchaser.

             The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting
         agreements, certificates in such denominations and registered in such names as required by the underwriters to permit
         prompt delivery to each purchaser.


                                                                      II-3
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                                                                SIGNATURE

            Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to this
         Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Virginia
         Beach, State of Virginia, on April 6, 2011.


                                                                     ADS Tactical, Inc.



                                                                    By: /s/ DANIEL J. CLARKSON
                                                                         Daniel J. Clarkson
                                                                         Chief Operating Officer, Vice President,
                                                                         Treasurer, Secretary and Director

             Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following
         persons in the capacities and on the dates indicated.


                                 Signature                                                Title                               Date



         *                                                          Chief Executive Officer, President, and              April 6, 2011
         Luke M. Hillier                                            Director
                                                                    (Principal Executive Officer)

         /s/ DANIEL J. CLARKSON                                     Chief Operating Officer, Vice President,             April 6, 2011
         Daniel J. Clarkson                                         Treasurer, Secretary and Director

         *                                                          Chief Financial Officer                              April 6, 2011
         Patricia A. Bohlen                                         (Principal Financial Officer and Principal
                                                                    Accounting Officer)

         *                                                          Director                                             April 6, 2011
         R. Scott LaRose

         *                                                          Director                                             April 6, 2011
         William A. Roper, Jr.



         *By: /s/ DANIEL J. CLARKSON
               Daniel J. Clarkson, as Attorney-In-Fact


                                                                      II-4
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                                                                EXHIBIT INDEX


            Exhibit
                        Description of
              No.       Exhibit


               1 .1†    Form of Underwriting Agreement.
               3 .1+    Certificate of Incorporation of ADS Tactical, Inc.
               3 .2+    Bylaws of ADS Tactical, Inc.
               3 .3†    Form of Amended and Restated Certificate of Incorporation of ADS Tactical, Inc.
               3 .4†    Form of Amended and Restated Bylaws of ADS Tactical, Inc.
               4 .1†    Specimen Common Stock Certificate of ADS Tactical, Inc.
               4 .2*    Senior Secured Notes Indenture, dated as of March 25, 2011, among ADS Tactical, Inc., the Guarantors
                        named therein, Wilmington Trust FSB, as Trustee and Wilmington Trust FSB, as Collateral Trustee.
               4 .3*    Form of 11.00% Senior Secured Note due 2018 (included in Exhibit 4.2 above).
               5 .1†    Opinion of Latham & Watkins LLP, special counsel to ADS Tactical, Inc.
              10 .1+    Loan and Security Agreement, dated as of February 18, 2010, among ADS Tactical, Inc. (f/k/a Tactical
                        HoldCorp, Inc.), Atlantic Diving Supply, Inc., Mar-Vel International, Inc., a New Jersey corporation, the
                        lenders party thereto, Wachovia Bank, National Association, as Administrative Agent, SunTrust Bank, RBS
                        Business Capital, a division of RBS Asset Finance, Inc., a subsidiary of RBS Citizens, NA, and Bank of
                        America, N.A., each as a Syndication Agent, and Wells Fargo Capital Finance, LLC as Sole Lead Arranger,
                        Manager and Bookrunner.
              10 .2+    First Amendment to Loan and Security Agreement, as of dated October 22, 2010, among ADS Tactical, Inc.
                        (formerly known as Tactical HoldCorp, Inc.), a Delaware corporation, Atlantic Diving Supply, Inc. (d/b/a
                        ADS, Inc.), a Virginia corporation, the Subsidiaries of the Company identified as “Borrowers” on the
                        signature pages thereto, Mar-Vel International, Inc., a New Jersey corporation, the lenders party thereto, and
                        Wells Fargo Bank, National Association, as Administrative Agent.
              10 .3*    Amended and Restated Loan and Security Agreement, dated as of March 25, 2011, among ADS Tactical,
                        Inc. and Atlantic Diving Supply, Inc., as Borrowers, Certain other Subsidiaries of the Company, as
                        Subsidiary Guarantors, the lenders from time to time party thereto and Wells Fargo Bank, National
                        Association, as Administrative Agent, Suntrust Bank, RBS Business Capital, a division of RBS Asset
                        Finance, Inc., a subsidiary of RBS Citizens, NA and Bank of America, N.A., each, as a Syndication Agent
                        and Wells Fargo Capital Finance, LLC, as Sole Lead Arranger, Manager and Bookrunner.
              10 .4†    Form of Stockholders Agreement among Luke Hillier, Daniel Clarkson, R. Scott LaRose and ADS Tactical,
                        Inc.
              10 .5†    Employment Agreement, dated as of          , 2011, between Luke Hillier and ADS Tactical, Inc.
              10 .6†    Employment Agreement, dated as of          , 2011, between Daniel Clarkson and ADS Tactical, Inc.
              10 .7+    2010 Compensation Plan Details for Patricia Bohlen.
              10 .8+    Employment Agreement, dated as of January 11, 2009, between Bruce Dressel and Atlantic Diving Supply,
                        Inc.
              10 .9+    2010 Compensation Plan Details for Bruce Dressel.
              10 .10+   2010 Compensation Plan Details for Jason Wallace.
              10 .11+   Lease Agreement, dated as of August 1, 2009, between Tactical Office, LLC and Atlantic Diving Supply,
                        Inc.
              10 .12+   Lease Agreement, dated as of May 22, 2007, between Kettler Realty Corp. and ADS, Inc.
              10 .13+   Lease Addendum for Temporary Space, dated as of December 1, 2009, between Kettler Realty Corp. and
                        ADS, Inc.


                                                                     II-5
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            Exhibit
                        Description of
              No.       Exhibit


              10 .14+   Lease Agreement, dated as of July 23, 2008, between Tactical Warehouse, LLC and Atlantic Diving Supply,
                        Inc.
              10 .15*   Lease Agreement, dated as of November 18, 2010, between SEBCO, Inc. and Atlantic Diving Supply, Inc.
              10 .16*   Flex Lease Agreement, dated as of November 30, 2005, between 7115 Airport Highway, LLC and Mar-Vel
                        International, Inc., as amended.
              10 .17*   2011 Compensation Plan Details for Bruce Dressel.
              10 .18*   2011 Compensation Plan Details for Patricia Bohlen.
              10 .19*   2011 Compensation Plan Details for Jason Wallace.
              21 .1+    Subsidiaries of the Registrant.
              23 .1†    Consent of Latham & Watkins LLP, special counsel to ADS Tactical, Inc. (included in Exhibit 5.1).
              23 .2*    Consent of KPMG LLP, Independent Registered Public Accounting Firm.
              23 .3+    Power of Attorney (included on signature pages attached hereto).


         * Filed herewith.

         † To be filed by amendment.

         + Previously filed.


                                                                  II-6
                                       Exhibit 4.2



 SENIOR SECURED NOTES INDENTURE
       Dated as of March 25, 2011
                 Among
         ADS TACTICAL, INC.
       The Guarantors named herein
                  and
       WILMINGTON TRUST FSB
             as Trustee
       WILMINGTON TRUST FSB
          as Collateral Trustee
11.00% SENIOR SECURED NOTES DUE 2018
                                                         TABLE OF CONTENTS



                                                                                          PAGE
                                                              ARTICLE 1
                                             DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01 . Definitions                                                                  1
Section 1.02 . Other Definitions                                                           39
Section 1.03 . Rules of Construction                                                       41
Section 1.04 . Incorporation by Reference of Trust Indenture Act                           42
Section 1.05 . Acts of Holders                                                             42

                                                                   ARTICLE 2
                                                                   THE NOTES

Section 2.01 . Form and Dating; Terms                                                      45
Section 2.02 . Execution and Authentication                                                46
Section 2.03 . Registrar and Paying Agent                                                  46
Section 2.04 . Paying Agent To Hold Money in Trust                                         47
Section 2.05 . Holder Lists                                                                47
Section 2.06 . Transfer and Exchange                                                       47
Section 2.07 . Replacement Notes                                                           49
Section 2.08 . Outstanding Notes                                                           49
Section 2.09 . Treasury Notes                                                              49
Section 2.10 . Temporary Notes                                                             50
Section 2.11 . Cancellation                                                                50
Section 2.12 . Defaulted Interest                                                          50
Section 2.13 . CUSIP and ISIN Numbers                                                      51

                                                                   ARTICLE 3
                                                                   REDEMPTION

Section 3.01 . Notices to Trustee                                                          51
Section 3.02 . Selection of Notes To Be Redeemed or Purchased                              52
Section 3.03 . Notice of Redemption                                                        52
Section 3.04 . Effect of Notice of Redemption                                              53
Section 3.05 . Deposit of Redemption or Purchase Price                                     54
Section 3.06 . Notes Redeemed or Purchased in Part                                         54
Section 3.07 . Optional Redemption                                                         54
Section 3.08 . Mandatory Redemption                                                        56
Section 3.09 . Offers to Repurchase by Application of Collateral Excess Proceeds           56
Section 3.10 . Offers to Repurchase by Application of Excess Proceeds                      58

                                                                        i
                                                                                        PAGE
                                                                 ARTICLE 4
                                                                 COVENANTS

Section 4.01 . Payments of Notes                                                         61
Section 4.02 . Maintenance of Office or Agency                                           61
Section 4.03 . Reporting                                                                 61
Section 4.04 . Compliance Certificate                                                    65
Section 4.05 . Stay, Extension and Usury Laws                                            65
Section 4.06 . Limitation on Restricted Payments                                         65
Section 4.07. Limitation on Restrictions on Distribution From Restricted Subsidiaries    73
Section 4.08 . Limitation on Indebtedness                                                75
Section 4.09. Limitation on Sales of Assets and Subsidiary Stock                         80
Section 4.10 . Transactions with Affiliates                                              84
Section 4.11 . Limitation on Liens                                                       87
Section 4.12 . Offer To Repurchase upon Change of Control                                87
Section 4.13 . Additional Guarantees                                                     89
Section 4.14 . Effectiveness of Covenants                                                90

                                                                 ARTICLE 5
                                                                 SUCCESSORS

Section 5.01 . Merger, Consolidation or Sale of All or Substantially All Assets          91
Section 5.02 . Successor Entity Substituted                                              95

                                                               ARTICLE 6
                                                          DEFAULTS AND REMEDIES

Section 6.01 . Events of Default                                                         95
Section 6.02 . Acceleration                                                              98
Section 6.03 . Other Remedies                                                            99
Section 6.04 . Waiver of Past Defaults                                                  100
Section 6.05 . Control by Majority                                                      100
Section 6.06 . Limitation on Suits                                                      100
Section 6.07 . Rights of Holders to Receive Payment                                     101
Section 6.08 . Collection Suit by Trustee                                               101
Section 6.09 . Restoration of Rights and Remedies                                       101
Section 6.10 . Rights and Remedies Cumulative                                           101
Section 6.11 . Delay or Omission Not Waiver                                             102
Section 6.12 . Trustee May File Proofs of Claim                                         102
Section 6.13 . Priorities                                                               102
Section 6.14 . Undertaking for Costs                                                    103

                                                                  ARTICLE 7
                                                                   TRUSTEE

Section 7.01 . Duties of Trustee                                                        103
Section 7.02 . Rights of Trustee                                                        104

                                                                        ii
                                                                                                                     PAGE
Section 7.03 . Individual Rights                                                                                     106
Section 7.04 . Disclaimer                                                                                            106
Section 7.05 . Notice of Defaults                                                                                    106
Section 7.06 . Reports by Trustee to Holders of the Notes                                                            107
Section 7.07 . Compensation and Indemnity                                                                            107
Section 7.08 . Replacement of Trustee or the Notes Agent                                                             108
Section 7.09 . Successor by Merger, Etc                                                                              110
Section 7.10 . Eligibility; Disqualification                                                                         110
Section 7.11 . Preferential Collection of Claims Against the Issuer                                                  110

                                                             ARTICLE 8
                                              LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01 . Option To Effect Legal Defeasance or Covenant Defeasance                                              110
Section 8.02 . Legal Defeasance and Discharge                                                                        111
Section 8.03 . Covenant Defeasance                                                                                   112
Section 8.04 . Conditions to Legal or Covenant Defeasance                                                            112
Section 8.05 . Deposited Money and U.S. Government Obligations To Be Held in Trust; Other Miscellaneous Provisions   114
Section 8.06 . Repayment to the Issuer                                                                               115
Section 8.07 . Reinstatement                                                                                         115

                                                              ARTICLE 9
                                                   AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01 . Without Consent of Holders                                                                            115
Section 9.02 . With Consent of Holders                                                                               117
Section 9.03 . [Intentionally Omitted]                                                                               119
Section 9.04 . Revocation and Effect of Consents                                                                     119
Section 9.05 . Notation on or Exchange of Notes                                                                      120
Section 9.06 . Trustee and Notes Agent To Sign Amendments, etc                                                       120
Section 9.07 . Payments for Consent                                                                                  120

                                                               ARTICLE 10
                                                             SECURITY INTEREST

Section 10.01 . Grant of Security Interest                                                                           120
Section 10.02 . Release of Security Interest                                                                         122
Section 10.03 . Pledge of Additional Collateral, Etc                                                                 123
Section 10.04 . Notes Agent                                                                                          123
Section 10.05 . Replacement of Notes Agent                                                                           124
Section 10.06 . Ranking                                                                                              124
Section 10.07 . Notes Obligations Not Subordinated                                                                   124

                                                                      iii
                                                                                                              PAGE
                                                              ARTICLE 11
                                                            NOTE GUARANTEES

Section 11.01 . The Note Guarantees                                                                           124
Section 11.02 . Note Guarantee Unconditional                                                                  125
Section 11.03 . Discharge; Reinstatement                                                                      126
Section 11.04 . Waiver by the Guarantors                                                                      126
Section 11.05 . Subrogation and Contribution                                                                  126
Section 11.06 . Stay of Acceleration                                                                          126
Section 11.07 . Limitation on Amount of Note Guarantee                                                        126
Section 11.08 . Execution and Delivery of Note Guarantee                                                      127
Section 11.09 . Release of Note Guarantee                                                                     127

                                                              ARTICLE 12
                                                       SATISFACTION AND DISCHARGE

Section 12.01 . Satisfaction and Discharge                                                                    128
Section 12.02 . Application of Trust Money                                                                    129

                                                               ARTICLE 13
                                                              MISCELLANEOUS

Section 13.01 . [Intentionally Omitted]                                                                       130
Section 13.02 . Notices                                                                                       130
Section 13.03 . Communication by Holders with Other Holders                                                   132
Section 13.04 . Certificate and Opinion as to Conditions Precedent                                            132
Section 13.05 . Statements Required in Certificate or Opinion                                                 132
Section 13.06 . Rules by Trustee and Agents                                                                   133
Section 13.07 . No Personal Liability of Directors, Officers, Employees, Members, Partners and Stockholders   133
Section 13.08 . Governing Law                                                                                 133
Section 13.09 . Waiver of Jury Trial                                                                          133
Section 13.10 . Force Majeure                                                                                 133
Section 13.11 . No Adverse Interpretation of Other Agreements                                                 134
Section 13.12 . Successors                                                                                    134
Section 13.13 . Severability                                                                                  134
Section 13.14 . Counterpart Originals                                                                         134
Section 13.15 . Table of Contents, Headings, etc                                                              134
Section 13.16 . U.S.A. PATRIOT Act                                                                            134
Section 13.17 . Payments Due on Non-Business Days                                                             134
Section 13.18 . Consent to Jurisdiction                                                                       135

Appendix A Provisions Relating to Initial Notes and Additional Notes

Exhibit A Form of Note
Exhibit B Form of Institutional Accredited Investor Transferee Letter of Representation
Exhibit C Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors

                                                                       iv
   INDENTURE, dated as of March 25, 2011, among ADS Tactical, Inc. (the “ Issuer ”), the Guarantors (as defined herein), Wilmington
Trust FSB, a federal savings bank, as trustee (“ Trustee ”), and Wilmington Trust FSB, a federal savings bank, as Collateral Trustee (“ Notes
Agent ”).


                                                                WITNESSETH
  WHEREAS, the Issuer has duly authorized the creation of and issue of $275,000,000 aggregate principal amount of 11.00% Senior Secured
Notes due 2018 (the “ Initial Notes ”); and
   WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture.
   NOW, THEREFORE, the Issuer, the Trustee and the Notes Agent agree as follows for the benefit of each other and for the equal and ratable
benefit of the Holders of the Notes.


                                                                  ARTICLE 1
                                                 DEFINITIONS AND INCORPORATION BY REFERENCE
   Section 1.01 . Definitions.
   “ ABL Agent ” means the representative(s) from time to time administrating the Collateral on behalf of the lenders under the ABL Facility.
   “ ABL Facility ” means the Amended and Restated Loan and Security Agreement, dated as of the Issue Date, as amended, by and among
the Issuer and Atlantic Diving Supply, Inc., as borrowers, Mar-Vel, as guarantor, the lenders party thereto and Wells Fargo Bank, National
Association, as Administrative Agent, including any guarantees, collateral documents, instruments and agreements executed in connection
therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof and any
indentures, guarantees, credit facilities or commercial paper facilities with banks or other institutional lenders or investors that replace, refund,
exchange or refinance any part of the loans, notes, guarantees, other credit facilities or commitments thereunder, including any such
replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof (
provided that such increase in borrowings is permitted under Section 4.08).
   “ ABL Liens ” means all Liens in favor of the ABL Agent on the Collateral securing the ABL Obligations.
   “ ABL Obligations ” means all Indebtedness and other Obligations under the ABL Facility.
   “ ABL Priority Collateral ” means the term defined in the Intercreditor Agreement.
   “ ABL Secured Party ” means the lenders party to the ABL Facility and the ABL Agent.
    “ Acquired Indebtedness ” means, with respect to any specified Person, Indebtedness (a) of any Person or any of its Subsidiaries existing
at the time such Person becomes a Restricted Subsidiary or (b) assumed in connection with the acquisition of assets from such Person, in each
case whether or not Incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary or such acquisition, and Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. Acquired
Indebtedness shall be deemed to have been Incurred, with respect to clause (a) of the preceding sentence, on the date such Person becomes a
Restricted Subsidiary and, with respect to clause (b) of the preceding sentence, on the date of consummation of such acquisition of assets.
   “ Additional Assets ” means:
   (1) any property, plant, equipment or other asset to be used by the Issuer or a Restricted Subsidiary in a Similar Business;
  (2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Issuer or a
Restricted Subsidiary; or
   (3) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary.
   “ Additional Notes ” means additional Notes (other than the Original Notes) issued from time to time under this Indenture in accordance
with Sections 2.01 and 4.08 (other than Notes issued or authenticated upon transfer, replacement or exchange of such Notes).
   “ Administrative Agent ” means Wells Fargo Bank, National Association, as administrative agent under the ABL Facility.
   “ Affiliate ” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”) when used with respect to any Person means possession, directly or
indirectly, of the power to direct the management and

                                                                          2
policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.
   “ Agent ” means any Registrar or Paying Agent.
   “ Applicable Premium ” means, with respect to a Note on any date of redemption, the greater of:
   (1) 1.0% of the principal amount of such Note; and
   (2) the excess, if any, of (a) the present value as of such date of redemption of (i) the redemption price of such Note on April 1, 2015 (each
such redemption price being set forth in Section 3.07) plus (ii) all remaining scheduled interest payments due on such Note through April 1,
2015 (excluding accrued but unpaid interest to the date of redemption), computed using a discount rate equal to the Treasury Rate as of such
date of redemption plus 50 basis points, over (b) the then-outstanding principal of such Note.
   “ Asset Sale ” means any direct or indirect sale, lease (other than an operating lease entered into in the ordinary course of business), transfer,
issuance or other disposition, or a series of related sales, leases, transfers, issuances or dispositions that are part of a common plan, of shares of
Capital Stock of a Subsidiary (other than directors‟ qualifying shares), property or other assets (each referred to for the purposes of this
definition as a “disposition”) by the Issuer or any of its Restricted Subsidiaries, including any disposition by means of a merger, consolidation
or similar transaction.
   Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales:
   (1) a disposition of assets by a Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary to a Restricted Subsidiary;
   (2) the sale of Cash Equivalents in the ordinary course of business;
   (3) a disposition of inventory or other damaged, obsolete or worn-out assets in the ordinary course of business;
  (4) a disposition of obsolete or worn-out equipment or equipment that is no longer useful in the conduct of the business of the Issuer and its
Restricted Subsidiaries;
   (5) the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to Section 5.01 or any disposition that
constitutes a Change of Control;

                                                                           3
   (6) an issuance of Capital Stock by a Restricted Subsidiary to the Issuer or to a Restricted Subsidiary;
   (7) the making of any Restricted Payment permitted by Section 4.06 and the making of any Permitted Investment;
   (8) dispositions of assets in a single transaction or series of related transactions with an aggregate fair market value in any calendar year of
less than $5.0 million, with unused amounts in any calendar year being carried over to the immediately succeeding year;
   (9) the creation of a Permitted Lien and dispositions in connection with Permitted Liens;
   (10) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in
bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;
   (11) the issuance by a Restricted Subsidiary of Preferred Stock that is permitted under Section 4.08;
   (12) the licensing or sublicensing of intellectual property or other general intangibles and licenses, leases or subleases of other property in
the ordinary course of business which do not materially interfere with the business of the Issuer and its Restricted Subsidiaries;
   (13) foreclosure or any similar action with respect to assets;
   (14) any concurrent exchange or swap of assets in exchange for goods and/or services (including in connection with any outsourcing
arrangements) of comparable or greater value and useful to the business of the Issuer and the Restricted Subsidiaries as a whole, as determined
in good faith by an Officer of the Issuer;
   (15) any sale of Capital Stock in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
   (16) any payment in respect of, or unwinding of, any Hedging Obligations;
   (17) sales, transfers and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell
arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements;
   (18) the abandonment of intellectual property rights in the ordinary course of business, which in the reasonable good faith determination of
the Issuer

                                                                          4
are not material to the conduct of the business of the Issuer and its Restricted Subsidiaries taken as a whole; and
    (19) any sale or other distribution by the Issuer of the shares and/or assets of Mar-Vel and/or the Law Enforcement Business, respectively,
in any transaction or transactions that are permitted by the covenant described under Section 4.06.
   “ Average Life ” means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal
payment of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such
payment by (2) the sum of all such payments.
   “ Bank Product Obligations ” means all Obligations with respect to facilities or services related to (a) cash management, including
treasury, depository, overdraft, electronic funds transfer, cash pooling and other cash management arrangements, (b) commercial credit card
and merchant card services, credit or debit cards, stored value cards and purchase cards and (c) E-payables and comparable services.
   “ Bankruptcy Code ” means the United States Bankruptcy Code (11 U.S.C. § 101 et seq.), as amended from time to time.
  “ beneficial ownership ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, and “ beneficial
owner ” has a corresponding meaning.
   “ Board of Directors ” means:
   (1) with respect to a corporation, the Board of Directors of the corporation or (other than for purposes of determining Change of Control) the
executive committee of the Board of Directors;
   (2) with respect to a partnership, the Board of Directors or other like governing body, as applicable, of the general partner of the partnership;
and
   (3) with respect to any other Person, the board or committee of such Person serving a similar function.
   “ Borrowing Base ” means, as of any date an amount equal to (a) 90% of the book value of government accounts receivable of the Issuer
and its Restricted Subsidiaries plus (b) 85% of the book value of commercial accounts receivable of the Issuer and its Restricted Subsidiaries
plus (c) 65% of the book value of inventory of the Issuer and its Restricted Subsidiaries, in each case (i) as set forth in the consolidated balance
sheet of the Issuer and its Restricted Subsidiaries as of

                                                                          5
the end of the most recently ended fiscal quarter for which internal consolidated financial statements are available immediately preceding the
Incurrence of such Indebtedness and (ii) on a pro forma basis to give effect to any acquisition or disposition after such balance sheet date and
on or prior to such date of determination.
   “ Business Day ” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York are
authorized or required by law to close.
   “ Capital Stock ” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents
of or interests in (however designated) equity of such Person, including any Preferred Stock and limited liability or partnership interests
(whether general or limited), but excluding any debt securities convertible into such equity.
   “ Capitalized Lease Obligations ” means an obligation that is required to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount
of such obligation at the time any determination thereof is to be made as determined in accordance with GAAP, and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated
without penalty.
   “ Cash Equivalents ” means:
   (1) United States dollars;
   (2) (a) Canadian dollars, pounds sterling or Euros; or
     (b) in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies as may be held by it from time to time in
  the ordinary course of business;
   (3) securities issued or directly and fully guaranteed or insured by the United States Government or any agency or instrumentality of the
United States, provided that the full faith and credit of the United States is pledged in support thereof, having maturities of not more than one
year from the date of acquisition;
   (4) marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of acquisition and, at the time of acquisition, having a credit rating of
“A” or better from either Standard & Poor‟s Ratings Group, Inc. or Moody‟s Investors Service, Inc.;

                                                                         6
   (5) certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits or bankers‟ acceptances having maturities of not
more than one year from the date of acquisition thereof issued by any commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least “A” or the equivalent thereof by Standard & Poor‟s Ratings Group, Inc., or “A” or the equivalent thereof by
Moody‟s Investors Service, Inc., and having combined capital and surplus in excess of $500.0 million;
   (6) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2), (3) and
(4) entered into with any bank meeting the qualifications specified in clause (4) above;
   (7) commercial paper rated at the time of acquisition thereof at least “A-2” or the equivalent thereof by Standard & Poor‟s Ratings Group,
Inc. or “P-2” or the equivalent thereof by Moody‟s Investors Service, Inc., or carrying an equivalent rating by a nationally recognized Rating
Agency, if both of the two named Rating Agencies cease publishing ratings of investments, and in any case maturing within one year after the
date of acquisition thereof;
   (8) marketable short-term money market and similar funds having a rating of at least P-2 or A-2 from either Moody‟s Investors Service, Inc.
or Standard & Poor‟s Ratings Group, Inc., respectively (or, if at any time neither Moody‟s Investors Service, Inc. nor Standard & Poor‟s
Ratings Group, Inc. shall be rating such obligations, an equivalent rating from another Rating Agency);
   (9) readily marketable direct obligations issued by any state, commonwealth or territory of the United States or any political subdivision or
taxing authority thereof having an Investment Grade Rating from either Moody‟s Investors Service, Inc. or Standard & Poor‟s Ratings Group,
Inc. (or, if at any time neither Moody‟s Investors Service, Inc. nor Standard & Poor‟s Ratings Group, Inc. shall be rating such obligations, an
equivalent rating from another Rating Agency) with maturities of 24 months or less from the date of acquisition;
    (10) readily marketable direct obligations issued by any foreign government or any political subdivision or public instrumentality thereof, in
each case having an Investment Grade Rating from either Moody‟s Investors Service, Inc. or Standard & Poor‟s Ratings Group, Inc. (or, if at
any time neither Moody‟s Investors Service, Inc. nor Standard & Poor‟s Ratings Group, Inc. shall be rating such obligations, an equivalent
rating from another Rating Agency) with maturities of 24 months or less from the date of acquisition;
   (11) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA- (or the
equivalent thereof) or better by Standard & Poor‟s Ratings Group, Inc. or Aaa3 (or the equivalent thereof) or better by Moody‟s Investors
Service, Inc. (or, if at any time neither Moody‟s Investors Service, Inc. nor Standard & Poor‟s Ratings Group, Inc. shall be rating such
obligations, an equivalent rating from another Rating Agency); and

                                                                         7
   (12) investment funds investing at least 90.0% of their assets in Investments, securities and other obligations of the types described in
clauses (1) through (11) above.
   In the case of Investments by any Foreign Subsidiary that is a Restricted Subsidiary or Investments made in a country outside the United
States of America, Cash Equivalents shall also include (a) investments of the type and maturity described in clauses (1) through (8) and clauses
(10) and (11) above of foreign obligors, which Investments or obligors (or the parents of such obligors) have ratings described in such clauses
or equivalent ratings from comparable foreign rating agencies and (b) other short-term investments utilized by Foreign Subsidiaries that are
Restricted Subsidiaries in accordance with normal investment practices for cash management in investments analogous to the foregoing
investments in clauses (1) through (11) and in this paragraph.
   Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses
(1) and (2) above, provided that such amounts are converted into any currency listed in clauses (1) and (2) as promptly as practicable and in any
event within ten Business Days following the receipt of such amounts.
   “ Change of Control ” means:
    (1) the Issuer becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written
notice or otherwise) the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or
any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of
Rule 13d-5(b)(1) under the Exchange Act), other than one or more Permitted Holders or a direct or indirect parent entity, becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a majority in the aggregate of the
total voting power of the Voting Stock of the Issuer or any of its direct or indirect parent entities, whether as a result of the issuance of
securities of the Issuer or any of its direct or indirect parent entities, any merger, consolidation, liquidation or dissolution of the Issuer or any of
its direct or indirect parent entities, any direct or indirect transfer of securities by any Permitted Holder or otherwise; or
   (2) the Issuer sells or transfers (in one or a series of related transactions) all or substantially all of the assets of the Issuer and its Restricted
Subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) other than transactions
with a Permitted Holder; or
   (3) during any period of two consecutive years (during which period the Issuer has been a party to this Indenture), individuals who at the
beginning of such period were members of the Board of Directors of the Issuer (together with

                                                                             8
any new members thereof whose election by such Board of Directors or whose nomination for election by holders of Capital Stock of the Issuer
was approved by one or more Permitted Holders or by a vote of a majority of the members of such Board of Directors then still in office who
were either members thereof at the beginning of such period or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of such Board of Directors then in office.
   “ Code ” means the Internal Revenue Code of 1986, as amended.
   “ Collateral ” means the Notes Priority Collateral and the ABL Priority Collateral.
   “ Commodity Agreement ” means any commodity futures contract, commodity option or other similar agreement or arrangement entered
into by the Issuer or any Restricted Subsidiary designed to protect the Issuer or any of its Restricted Subsidiaries against fluctuations in the
price of commodities actually used in the ordinary course of business of the Issuer and its Restricted Subsidiaries.
   “ Common Stock ” means with respect to any Person, any and all shares, interest or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of such Person‟s common stock whether or not outstanding on the Issue Date, and includes,
without limitation, all series and classes of such common stock.
   “ Consolidated Coverage Ratio ” means as of any date of determination, with respect to any Person, the ratio of (x) the aggregate amount
of Consolidated EBITDA of such Person for the period of the most recent four consecutive fiscal quarters ending prior to the date of such
determination for which internal financial statements are available to (y) Consolidated Interest Expense for such four fiscal quarters; provided ,
however , that:
   (1) if the Issuer or any Restricted Subsidiary:
      (a) has Incurred any Indebtedness since the beginning of such period that remains outstanding on such date of determination or if the
  transaction giving rise to the need to calculate the Consolidated Coverage Ratio includes an Incurrence of Indebtedness, Consolidated
  EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness
  as if such Indebtedness had been Incurred on the first day of such period (except that in making such computation, the amount of
  Indebtedness under the ABL Facility outstanding on the date of such calculation shall be deemed to be (i) the average daily balance of such
  Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (ii) if such facility was
  created after the end of such four fiscal quarters,

                                                                         9
  the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation)
  and the discharge of any other Indebtedness repaid, repurchased, redeemed, retired, defeased or otherwise discharged with the proceeds of
  such new Indebtedness as if such discharge had occurred on the first day of such period; or
      (b) has repaid, repurchased, redeemed, retired, defeased or otherwise discharged any Indebtedness since the beginning of the period that
  is no longer outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage
  Ratio includes a repayment, repurchase, redemption, retirement, defeasance or discharge of Indebtedness (in each case, other than
  Indebtedness Incurred under the ABL Facility unless such Indebtedness has been permanently repaid and the related commitment terminated
  and not replaced), Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro
  forma basis to such repayment, repurchase, redemption, retirement, defeasance or discharge of such Indebtedness, including with the
  proceeds of such new Indebtedness, as if such discharge had occurred on the first day of such period;
   (2) if since the beginning of such period the Issuer or any Restricted Subsidiary has made any Asset Sale or disposed of or discontinued (as
defined under GAAP) any company, division, operating unit, segment, business, group of related assets or line of business or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio includes such a transaction:
      (a) the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) directly
  attributable to the assets that are the subject of such disposition or discontinuation for such period or increased by an amount equal to the
  Consolidated EBITDA (if negative) directly attributable thereto for such period; and
      (b) Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly
  attributable to any Indebtedness of the Issuer or any Restricted Subsidiary repaid, repurchased, redeemed, retired, defeased or otherwise
  discharged with respect to the Issuer and its continuing Restricted Subsidiaries in connection with such transaction for such period (or, if the
  Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness
  of such Restricted Subsidiary to the extent the Issuer and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness
  after such sale);

                                                                        10
   (3) if since the beginning of such period the Issuer or any Restricted Subsidiary (by merger or otherwise) has made an Investment in any
Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary or is merged with or into the Issuer or a Restricted Subsidiary) or an
acquisition of assets, including any merger or acquisition of assets occurring in connection with a transaction causing a calculation to be made
hereunder, which constitutes all or substantially all of a company, division, operating unit, segment, business, group of related assets or line of
business, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or merger or acquisition occurred on the first day of such period; and
   (4) if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Issuer
or any Restricted Subsidiary since the beginning of such period) has Incurred any Indebtedness or discharged any Indebtedness, made any
disposition or discontinued any operations or made any Investment or acquisition of assets that would have required an adjustment pursuant to
clauses (1), (2) or (3) above if made by the Issuer or a Restricted Subsidiary during such period, Consolidated EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such transaction had occurred on the first day of
such period.
   For purposes of this definition, whenever pro forma effect is to be given to any calculation under this definition, the pro forma calculations
shall be determined in good faith by the chief financial officer of the Issuer (including pro forma expense and cost reductions whether or not
permitted by Regulation S-X under the Securities Act). If any Indebtedness bears a floating rate of interest and is being given pro forma effect,
the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for
the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a
remaining term in excess of 12 months). If any Indebtedness that is being given pro forma effect bears an interest rate at the option of the
Issuer, the interest rate shall be calculated by applying such optional rate chosen by the Issuer.
   “ Consolidated EBITDA ” means, for any period and as of any date of calculation (the “ Calculation Date ”), the sum of (all determined
on a consolidated basis for the Issuer and its Subsidiaries in accordance with GAAP for the most recently completed period)
     (a) Consolidated Net Income,
     plus
     (b) without duplication and in each case solely to the extent deducted in determining such Consolidated Net Income for such period, the sum
of

                                                                         11
      (i) Consolidated Interest Expense;
      (ii) income tax expense;
      (iii) depreciation and amortization expense;
      (iv) any restructuring charges;
      (v) expenses and adjustments related to purchase accounting;
     (vi) the amount of “run-rate” cost savings and synergies projected by the chief financial officer of the Issuer to be realized as a result of
  specified actions expected to be taken during the twelve-month period following the Calculation Date (calculated on a pro forma basis as if
  such cost savings and synergies had been realized at the beginning of the applicable four-quarter period), net of the amount of actual benefits
  realized during such period from such actions; provided that
        (A) the chief financial officer of the Issuer shall have certified that (x) such cost savings and synergies are reasonably identifiable,
     factually supportable and reasonably attributable to and reasonably anticipated to result from such actions and (y) such actions have been
     taken and the benefits resulting therefrom are anticipated by the Issuer to be realized within 12 months after the closing date of such
     acquisition;
        (B) no cost savings or synergies shall be added pursuant to this clause (vi) to the extent duplicative of any pro forma adjustments made
     pursuant to the definition of “Consolidated Coverage Ratio”; and
       (C) the aggregate amount of cost savings and synergies added pursuant to this clause (vi) shall not exceed 10% of Consolidated
     EBITDA for any period of four consecutive fiscal quarters;
      (vii) any extraordinary or non-recurring losses; and
     (viii) any impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to
  intangible assets, long-lived assets, investments in debt and equity securities (including any losses with respect to the foregoing in
  bankruptcy, insolvency or similar proceedings);
   minus
   (c) the amount of all cash payments made in such period to the extent that such payments relate to any reserve or similar non-cash charge
incurred in a

                                                                       12
previous period that was added back in determining Consolidated EBITDA pursuant to the preceding subclause (b); and
     (d) any extraordinary or non-recurring gains to the extent included in Consolidated Net Income;
    provided , that, Consolidated EBITDA for such period shall not include the cumulative effect of a change in accounting principles during
such period.
  “ Consolidated Interest Expense ” means, for any period, the total interest expense of the Issuer and its consolidated Restricted
Subsidiaries, whether paid or accrued, plus, to the extent not included in such interest expense:
   (1) interest expense attributable to Capitalized Lease Obligations in respect of the relevant lease giving rise thereto, determined as if such
lease were a capitalized lease in accordance with GAAP and the interest component of any deferred payment obligations;
   (2) amortization of debt discount (including the amortization of original issue discount resulting from the issuance of Indebtedness at less
than par) and debt issuance cost; provided , however , that any amortization of bond premium shall be credited to reduce Consolidated Interest
Expense unless, pursuant to GAAP, such amortization of bond premium has otherwise reduced Consolidated Interest Expense;
  (3) non-cash interest expense, but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of
Hedging Obligations (or other derivative instruments pursuant to GAAP);
     (4) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers‟ acceptance financing;
   (5) interest actually paid by the Issuer or any such Restricted Subsidiary under any Guarantee of Indebtedness or other obligation of any
other Person;
   (6) actual cash costs associated with Hedging Obligations (excluding any costs attributable to movement in the mark to market valuation of
Hedging Obligations) related to Indebtedness; provided , however , that if Hedging Obligations result in net benefits rather than costs, such
benefits shall be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in
Consolidated Net Income;
     (7) the interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period;
     (8) all dividends payable to a party other than the Issuer or a Wholly Owned Subsidiary which are paid or payable in cash, Cash Equivalents
or

                                                                          13
Indebtedness or accrued during such period in respect of any series of Disqualified Stock of such Person or in respect of Preferred Stock of the
Restricted Subsidiaries that are not Guarantors; and
   (9) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Issuer and its Restricted Subsidiaries) in connection with Indebtedness Incurred by
such plan or trust.
   For purposes of the foregoing, total interest expense shall be determined (i) after giving effect to any net payments made or received by the
Issuer and its Subsidiaries with respect to Interest Rate Agreements and (ii) exclusive of amounts classified as other comprehensive income in
the balance sheet of the Issuer. Notwithstanding anything to the contrary contained herein, commissions, discounts, yield and other fees and
charges Incurred in connection with any transaction pursuant to which the Issuer or its Restricted Subsidiaries may sell, convey or otherwise
transfer or grant a security interest in any accounts receivable or related assets shall be included in Consolidated Interest Expense.
   “ Consolidated Net Income ” means, for any period, the net income (loss) of the Issuer and its consolidated Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP; provided , however , that there shall not be included in such Consolidated Net
Income on an after-tax basis:
   (1) any net after tax effects of gains or losses attributable to Asset Sales and other asset dispositions or abandonments (including any
disposal of abandoned or discontinued operations) or the sale or other disposition of any Capital Stock of any Person other than in the ordinary
course of business as determined in good faith by an Officer of the Issuer;
   (2) any net income (loss) of any Person if such Person is not a Restricted Subsidiary or that is accounted for by the equity method of
accounting, except that:
     (a) the Issuer‟s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the
  aggregate amount of cash actually distributed by such Person during such period to the Issuer or a Restricted Subsidiary as a dividend or
  other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause
  (4) below); and
     (b) the Issuer‟s equity in a net loss of any such Person (other than an Unrestricted Subsidiary) for such period shall be included in
  determining such Consolidated Net Income to the extent such loss has been funded with cash from the Issuer or a Restricted Subsidiary;

                                                                        14
   (3) solely for the purpose of determining the amount available for Restricted Payments under clause (C)(1) of Section 4.06(a), any net
income (but not loss) of any Restricted Subsidiary (other than a Guarantor) if such Subsidiary is subject to prior government approval or other
restrictions due to the operation of its charter or any agreement, instrument, judgment, decree, order statute, rule or government regulation
(which has not been waived), directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary,
directly or indirectly, to the Issuer, except that:
      (a) the Issuer‟s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net
  Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Issuer or
  another Restricted Subsidiary as a dividend (subject, in the case of a dividend to another Restricted Subsidiary, to the limitation contained in
  this clause (a)); and
    (b) the Issuer‟s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated
  Net Income;
   (4) any after-tax effect of income (loss) from the early extinguishment of Indebtedness or Hedging Obligations or other derivative
instruments;
   (5) the amortization of intangibles arising pursuant to GAAP;
   (6) the cumulative effect of a change in accounting principles;
   (7) any non-cash compensation charge or expense associated with grants of stock appreciation or similar rights, stock options, restricted
stock or other rights or equity incentive programs to officers, directors or employees;
   (8) any fees, expenses or charges incurred during such period, or any amortization thereof for such period, in connection with any
acquisition, Investment, Asset Sale, disposition, Incurrence or repayment of Indebtedness (including all fees, expenses and charges related to
the offering of the Notes or the obtaining or closing of the ABL Facility), issuance of Equity Interests, refinancing transaction or amendment or
modification of any debt instrument (including any amendment or other modification of the Notes, the ABL Facility) and including, in each
case, any such transaction consummated prior to the Issue Date and any such transaction undertaken but not completed and any charges or
costs incurred during such period as a result of any such transaction, in each case whether or not successful;
  (9) any net unrealized gain or loss (after any offset) resulting from Hedging Obligations and the application of ASC 815, Derivatives and
Hedging ; and

                                                                        15
    (10) any net unrealized gain or loss (after any offset) resulting from currency translation and transaction gains or losses including those
related to currency remeasurements of Indebtedness (including any net loss or gain resulting from Hedging Obligations for currency exchange
risk) and any other monetary assets and liabilities.
   “ continuing ” means, with respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.
   “ Contribution Indebtedness ” means Indebtedness of the Issuer or any Restricted Subsidiary in an aggregate principal amount not to
exceed the aggregate amount of cash received by the Issuer after the Issue Date from the sale of its Equity Interests (other than Disqualified
Stock) or as a contribution to its common equity capital (in each case, other than to or from a Subsidiary of the Issuer); provided that such
Indebtedness is designated as “Contribution Indebtedness” pursuant to an Officer‟s Certificate on the date of its Incurrence. Any sale of Equity
Interests or capital contribution that forms the basis for an Incurrence of Contribution Indebtedness may not be designated as an Excluded
Contribution and shall be excluded from the calculation set forth in clause (C) under Section 4.06(a).
   “ Corporate Trust Office ” means the designated office of the Trustee at which the corporate trust business of the Trustee shall at any
particular time be administered, which office at the date of original execution of this Indenture is located at address for the Trustee set forth in
Section 13.02.
   “ Currency Agreement ” means in respect of a Person any foreign exchange contract, currency swap agreement, futures contract, option
contract or other similar agreement as to which such Person is a party or a beneficiary.
   “ Custodian ” means the Trustee, in its capacity as custodian for the Global Notes, and any successor in that capacity.
   “ Default ” means any event that is, or after notice or passage of time or both would be, an Event of Default.
    “ Depositary ” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03(b)
as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such
pursuant to the applicable provision of this Indenture.
  “ Designated Non-cash Consideration ” means the fair market value of non-cash consideration received by the Issuer or one of its
Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer‟s
Certificate setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection

                                                                          16
with a subsequent sale, redemption or payment of, on or with respect to such Designated Non-cash Consideration.
   “ Disqualified Stock ” means, with respect to any Person, any Capital Stock of such Person that by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable) or upon the happening of any event:
   (1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;
   (2) is convertible into or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of the Issuer or a Restricted Subsidiary (it being understood that upon such conversion or exchange it shall be
an Incurrence of such Indebtedness or Disqualified Stock)); or
   (3) is redeemable at the option of the holder of the Capital Stock in whole or in part,
in each case on or prior to the date 91 days after the earlier of the final maturity date of the Notes or the date the Notes are no longer
outstanding; provided , however , that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or
exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided ,
further that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Issuer to
repurchase such Capital Stock upon the occurrence of a Change of Control or Asset Sale (each defined in a substantially identical manner to the
corresponding definitions in this Indenture) shall not constitute Disqualified Stock if the terms of such Capital Stock (and all such securities
into which it is convertible or exchangeable or for which it is redeemable or exchangeable) provide that the Issuer may not repurchase or
redeem any such Capital Stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) pursuant to such
provision prior to compliance by the Issuer with Sections 4.09 and 4.12 and unless such repurchase or redemption complies with Section 4.06.
   “ Equity Interests ” means:
   (i) in the case of a corporation, corporate stock;
   (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;

                                                                           17
   (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited);
   (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, and any rights (other than debt securities convertible into capital stock) warrants or options exchangeable for or
convertible into such capital stock; and
   (v) all warrants, options or other rights to acquire any of the interests described in clauses (i) through (iv) above (but excluding any debt
security that is convertible into, or exchangeable for, any of the interests described in clauses (i) through (iv) above).
   “ Equity Offering ” means a public offering for cash by the Issuer or any of its direct or indirect parent entities to the extent contributed to
the Issuer as equity (other than Disqualified Stock), as the case may be, of its Common Stock, or options, warrants or rights with respect to its
Common Stock to the extent an amount equal to the cash proceeds of such offering is contributed to the Issuer in the case of an offering by a
parent entity, other than (x) public offerings with respect to the Issuer‟s or any of its direct or indirect parent entities‟, as the case may be,
Common Stock, or options, warrants or rights, registered on Form S-4 or Form S-8 or (y) an issuance to any Subsidiary.
   “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated
thereunder.
   “ Excluded Contributions ” means the Cash Equivalents or other assets (valued at their fair market value in good faith by an Officer of the
Issuer) received by the Issuer after the Issue Date from:
   (1) contributions to its common equity capital, and
  (2) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other management or
employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock) of the Issuer,
in each case after the Issue Date and in each case designated as Excluded Contributions pursuant to an Officer‟s Certificate on or promptly after
the date such capital contribution is made or the date such Capital Stock is sold, as the case may be. Excluded Contributions may not be used as
a basis for Incurring Contribution Indebtedness and shall be excluded from the calculation set forth in clause (C) of Section 4.06(a).

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   “ Foreign Subsidiary ” means any Subsidiary that is not organized under the laws of the United States of America or any state or territory
thereof or the District of Columbia and any Subsidiary of such Subsidiary.
    “ GAAP ” means generally accepted accounting principles in the United States of America as in effect from time to time, including those
set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a
significant segment of the accounting profession; provided that leases shall be accounted for using the accounting principles in effect on the
Issue Date and any change in the accounting for leases after the Issue Date shall be disregarded. All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP. For the avoidance of doubt, all calculations, ratios and computations
with respect to leases contained in this Indenture shall be computed in conformity with GAAP as in effect as of the Issue Date.
   “ Global Notes Legend ” means the legend set forth under that caption in Appendix A hereto.
   “ Guarantee ” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any
other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:
   (1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising
by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise); or
   (2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided , however , that the term “Guarantee” shall not include endorsements for
collection or deposits in the ordinary course of business.
   The term “Guarantee” used as a verb has a corresponding meaning.
   “ Guarantor ” means each Restricted Subsidiary that provides a Note Guarantee on the Issue Date and any other Restricted Subsidiary that
provides a Note Guarantee in accordance with this Indenture; provided that upon release or discharge of such Restricted Subsidiary from its
Note Guarantee in accordance with this Indenture, such Restricted Subsidiary ceases to be a Guarantor.
   “ Guarantor Subordinated Obligation ” means, with respect to any Guarantor, any Indebtedness of such Guarantor (whether outstanding
on the Issue

                                                                        19
Date or thereafter Incurred) that is expressly subordinated in right of payment to the obligations of such Guarantor under its Note Guarantee
pursuant to a written agreement.
  “ Hedging Obligations ” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency
Agreement or Commodity Agreement.
   “ Holder ” means a Person in whose name a Note is registered on the Registrar‟s books.
   “ Incur ” means issue, create, assume, Guarantee, incur or otherwise become liable for; provided , however , that any Indebtedness or
Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary; and the terms
“Incurred” and “Incurrence” have meanings correlative to the foregoing.
   “ Indebtedness ” means, with respect to any Person on any date of determination (without duplication):
   (1) the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money;
   (2) the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar
instruments;
   (3) the principal component of all obligations of such Person in respect of letters of credit, bankers‟ acceptances or other similar instruments
(including reimbursement obligations with respect thereto, except to the extent such letter of credit, bankers‟ acceptance or other similar
instrument relates to a trade payable and any such reimbursement obligation is satisfied within 30 days of Incurrence);
   (4) the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property, which purchase
price is due after the date of placing such property in service or taking delivery and title thereto, except (i) any such balance that constitutes a
trade payable or similar obligation to a trade creditor, in each case accrued in the ordinary course of business and (ii) any earn-out obligation
until the amount of such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP;
   (5) Capitalized Lease Obligations of such Person;
   (6) the principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other
repurchase of any Disqualified Stock or, with respect to any Subsidiary that is not a Guarantor, any Preferred Stock (but excluding, in each
case, any accrued dividends);

                                                                          20
   (7) the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided , however , that the amount of such Indebtedness shall be the lesser of (a) the fair market
value of such assets at such date of determination and (b) the amount of such Indebtedness of such other Persons;
   (8) the principal component of Indebtedness of other Persons to the extent Guaranteed by such Person (whether or not such items would
appear on the balance sheet of the guarantor or obligor);
   (9) to the extent not otherwise included in this definition, net obligations of such Person under Hedging Obligations (the amount of any such
obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such Obligation that would be
payable by such Person at such time); and
    (10) to the extent not otherwise included in this definition, the amount of obligations outstanding under the legal documents entered into as
part of a securitization transaction or series of securitization transactions that would be characterized as principal if such transaction were
structured as a secured lending transaction rather than as a purchase outstanding relating to a securitization transaction or series of
securitization transactions;
provided , however , that notwithstanding the foregoing, Indebtedness shall be deemed not to include (i) contingent obligations, Incurred in the
ordinary course of business and not in respect of borrowed money; (ii) deferred or prepaid revenues; or (iii) purchase price holdbacks in respect
of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller.
   Notwithstanding the foregoing, money borrowed and set aside at the time of the Incurrence of any Indebtedness in order to pre-fund the
payment of interest on such Indebtedness shall not be deemed to be “Indebtedness,” provided that such money is held to secure the payment of
such interest.
   “ Indenture ” means this Indenture, as amended or supplemented from time to time.
   “ Independent Financial Advisor ” means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar
Businesses of nationally recognized standing that is, as determined in the good faith judgment of an Officer of the Issuer, qualified to perform
the task for which it has been engaged.
   “ Initial Notes ” has the meaning set forth in the recitals hereto (and any Notes issued or authenticated upon transfer, replacement or
exchange thereof)

                                                                        21
   “ Initial Purchasers ” means J.P. Morgan Securities LLC, Morgan Stanley & Co. Incorporated and Wells Fargo Securities, LLC.
    “ Intercreditor Agreement ” means the Intercreditor Agreement dated March 25, 2011, among the Issuer, the Notes Agent, on behalf of
itself and the Holders, the Trustee, and the ABL Agent, on behalf of itself and the holders of the ABL Obligations, as the same may be
amended, supplemented or otherwise modified from time to time.
   “ Interest Payment Date ” means April 1 and October 1 each year to the Stated Maturity of the Notes.
   “ Interest Rate Agreement ” means, with respect to any Person any interest rate protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary.
   “ Investment ” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of any
direct or indirect advance, loan (other than advances or extensions of credit to customers in the ordinary course of business) or other extensions
of credit (including by way of Guarantee or similar arrangement, but excluding any debt or extension of credit represented by a bank deposit
other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by,
such Person and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided
that none of the following shall be deemed to be an Investment:
   (1) Hedging Obligations entered into in the ordinary course of business and in compliance with this Indenture;
   (2) endorsements of negotiable instruments and documents in the ordinary course of business; and
   (3) an acquisition of assets, Capital Stock or other securities by the Issuer or a Subsidiary for consideration to the extent such consideration
consists of Common Stock of the Issuer.
   For purposes of Section 4.06,
   (1) “ Investment ” shall include the portion (proportionate to the Issuer‟s equity interest in a Restricted Subsidiary to be designated as an
Unrestricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary at the time that such Restricted Subsidiary is
designated an

                                                                         22
Unrestricted Subsidiary; provided , however , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be
deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the Issuer‟s
aggregate “Investment” in such Subsidiary as of the time of such redesignation less (b) the portion (proportionate to the Issuer‟s equity interest
in such Subsidiary) of the fair market value of the net assets (as determined in good faith by an Officer of the Issuer) of such Subsidiary at the
time that such Subsidiary is so redesignated a Restricted Subsidiary;
   (2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, in each
case as determined in good faith by an Officer of the Issuer; and
   (3) if the Issuer or any Restricted Subsidiary sells or otherwise disposes of any Voting Stock of any Restricted Subsidiary such that, after
giving effect to any such sale or disposition, such entity is no longer a Subsidiary of the Issuer, the Issuer shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market value (as determined in good faith by an Officer of the Issuer) of
the Capital Stock of such Subsidiary not sold or disposed of.
   “ Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody‟s Investors Service, Inc. and BBB-
(or the equivalent) by Standard & Poor‟s Ratings Group, Inc., in each case, with a stable or better outlook.
   “ Issue Date ” means March 25, 2011.
   “ Issuer ” means ADS Tactical, Inc. and, if applicable, any successor obligor to its obligations under this Indenture and the Notes pursuant
to Article 5.
   “ Law Enforcement Business ” means the state and local law enforcement business of the Issuer and its Subsidiaries including, without
limitation, the business of providing tactical and operational equipment and services, including value-added logistics and supply chain
solutions, to state and local government customers for use in law enforcement.
    “ Lien ” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or
give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed to constitute a Lien.

                                                                         23
   “ Loan Documents ” means, collectively, the ABL Facility, this Indenture, the Intercreditor Agreement, the Security Documents and the
other agreements contemplated thereby.
   “ Mar-Vel ” means Mar-Vel International, Inc. and assets related to the business conducted by Mar-Vel International, Inc.
    “ Net Proceeds ” means the aggregate cash proceeds received by the Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale,
including any cash received upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale, net of the
direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration, including legal, accounting and
investment banking fees, and brokerage and sales commissions, any relocation expenses incurred as a result thereof; taxes paid or payable as a
result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be
applied to the repayment of principal, premium, if any, and interest on Senior Indebtedness secured by a Lien on the assets disposed of required
(other than required by Section 4.09(b)(i)) to be paid as a result of such transaction and any deduction of appropriate amounts to be provided by
the Issuer or any of its Restricted Subsidiaries as a reserve in accordance with GAAP against any liabilities associated with the asset disposed
of in such transaction and retained by the Issuer or any of its Restricted Subsidiaries after such sale or other disposition thereof, including
pension and other post- employment benefit liabilities and liabilities related to environmental matters or against any indemnification
obligations associated with such transaction.
   “ Non-Guarantor Subsidiary ” means any Restricted Subsidiary that is not a Guarantor.
   “ Non-Recourse Debt ” means Indebtedness of a Person:
   (1) as to which neither the Issuer nor any Restricted Subsidiary (a) provides any Guarantee or credit support of any kind (including any
undertaking, Guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a
guarantor or otherwise);
  (2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any Indebtedness of the Issuer or any Restricted
Subsidiary to declare a default under such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated
Maturity; and
  (3) pursuant to which there is no recourse against any of the assets of the Issuer or its Restricted Subsidiaries, except that representations,
warranties, covenants and indemnities entered into by the Issuer or any Restricted Subsidiary

                                                                         24
that are reasonably customary in securitization of receivables transactions shall not be considered recourse.
    “ Notes ” means the Initial Notes and more particularly means any Note authenticated and delivered under this Indenture. For all purposes
of this Indenture, the term “Notes” shall also include any Additional Notes that may be issued under a supplemental indenture and Notes to be
issued or authenticated upon transfer, replacement or exchange of Notes.
   “ Notes Accounts ” means deposit accounts and securities accounts holding solely identifiable proceeds of the Notes Priority Collateral.
  “ Notes Agent ” means Wilmington Trust FSB, acting in its capacity as “Notes Agent” or “Collateral Trustee” under the Security
Documents, or any successor thereto.
   “ Note Guarantee ” means any Guarantee of payment of the Notes pursuant to the terms of this Indenture and any supplemental indenture
thereto and, collectively, all such Note Guarantees. Each Note Guarantee shall be in the form prescribed in this Indenture.
   “ Notes Liens ” means all Liens in favor of the Notes Agent on the Collateral securing the Notes Obligations.
   “ Notes Obligations ” means the Obligations of the Issuer under the Notes, the Indenture and the Security Documents and the obligations of
the Guarantors under the Note Guarantees (including, without limitation, the fees and expenses of the Trustee, the Notes Agent and any of their
counsel, agents and professional advisers).
   “ Notes Priority Collateral ” means the term defined in the Intercreditor Agreement.
   “ Notes Secured Parties ” means the Holders of the Notes, the Trustee or the Notes Agent.
    “ Obligations ” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy,
reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable state, federal or foreign law), other monetary obligations, penalties, fees, indemnifications, reimbursements
(including, without limitation, reimbursement obligations with respect to letters of credit and banker‟s acceptances), damages and other
liabilities, and Guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities, payable under the documentation governing any Indebtedness.

                                                                        25
   “ Offer to Purchase ” means a Collateral Proceeds Offer, an Asset Sale Offer or a Change of Control Offer.
   “ Offering Memorandum ” means the offering memorandum, dated March 22, 2011, relating to the sale of the Initial Notes.
  “ Officer ” means the Chief Executive Officer, the Chief Operating Officer or the Chief Financial Officer of the Issuer. Officer of any
Guarantor has a correlative meaning.
    “ Officer’s Certificate ” means a certificate signed on behalf of a Person by an Officer of such Person, that meets the requirements set forth
in this Indenture.
    “ Opinion of Counsel ” means a written opinion from legal counsel who is acceptable to the Trustee that meets the requirements set forth in
this Indenture. The counsel may be an employee of or counsel to the Issuer or the Trustee.
   “ Original Notes ” means the Initial Notes issued in exchange therefor.
    “ Pari Passu Indebtedness ” means any Additional Notes and any other Secured Indebtedness that has a stated maturity date that is equal to
or longer than the Notes and has Pari Passu Payment Lien Priority relative to the Notes with respect to the Collateral and is not secured by any
other assets; provided that an authorized representative of the holders of such Indebtedness (other than any Additional Notes) shall have
executed a joinder to the Intercreditor Agreement in the form provided therein.
  “ Pari Passu Payment Lien Priority ” means, relative to specified Indebtedness and other obligations having equal Lien priority on the
Notes and the Note Guarantees, as the case may be, with respect to the Collateral.
   “ Permitted Asset Swap ” means the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related
Business Assets and cash or Cash Equivalents between the Issuer or any of its Restricted Subsidiaries and another Person; provided that any
cash or Cash Equivalent received must be applied in accordance with Section 4.09.
    “ Permitted Holders ” means any of (a) the Principals and each of their Related Parties and any group of which the foregoing are members;
provided that in the case of such group, and without giving effect to the existence of such group or any other group, the Principals and each of
their Related Parties collectively have beneficial ownership of more than 50% of the total voting power of the Capital Stock of the Issuer or any
of its direct or indirect parent companies held by such group and (b) any Person acting in the capacity of an underwriter in connection with a
public or private offering of the Capital Stock of the Issuer or any direct or indirect parent entity or securities convertible into or exchangeable

                                                                         26
or exercisable for such Capital Stock. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in
respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture (or would result in a Change of
Control Offer in the absence of the waiver of such requirement by Holders in accordance with this Indenture) shall thereafter, together with its
Related Parties, constitute additional Permitted Holders.
   “ Permitted Investment ” means an Investment by the Issuer or any Restricted Subsidiary in:
   (1) the Issuer or a Restricted Subsidiary;
   (2) any Investment by the Issuer or any of its Restricted Subsidiaries in a Person that is engaged in a Similar Business if as a result of such
Investment:
      (a) such Person becomes a Restricted Subsidiary; or
     (b) such Person, in one transaction or a series of related transactions, is merged or consolidated with or into, or transfers or conveys
  substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary,
     and, in each case, any Investment held by such Person; provided , that such Investment was not acquired by such Person in contemplation
  of such acquisition, merger, consolidation or transfer;
   (3) cash and Cash Equivalents;
    (4) receivables owing to the Issuer or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided , however , that such trade terms may include such concessionary trade terms
as the Issuer or any such Restricted Subsidiary deems reasonable under the circumstances;
   (5) 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;
   (6) loans or advances to employees, officers or directors of the Issuer or any Restricted Subsidiary in the ordinary course of business in an
aggregate amount not in excess of $2.0 million at any time outstanding;
   (7) any Investment acquired by the Issuer or any of its Restricted Subsidiaries:
      (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in

                                                                         27
  connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts
  receivable; or
      (b) as a result of a foreclosure by the Issuer or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer
  of title with respect to any secured Investment in default;
   (8) Investments made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.09 or any other disposition of assets not constituting an Asset Sale;
    (9) Investments in existence on, or made pursuant to binding commitments existing on, the Issue Date and described in the Offering
Memorandum or an Investment consisting of an extension, modification or renewal of any Investment existing on the Issue Date and described
in the Offering Memorandum (other than reimbursements of Investments in the Issuer or any Subsidiary); provided that the amount of any such
Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted
under this Indenture;
   (10) Currency Agreements, Interest Rate Agreements, Commodity Agreements and related Hedging Obligations, which transactions or
obligations are Incurred in compliance with Section 4.08;
   (11) Note Guarantees issued in accordance with Section 4.08;
   (12) Investments made in connection with the funding of contributions under any non-qualified retirement plan or similar employee
compensation plan in an amount not to exceed the amount of compensation expense recognized by the Issuer and its Restricted Subsidiaries in
connection with such plans;
   (13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with Section 4.10(b) (except
transactions described in Sections 4.10(b)(ii), 4.10(b)(vii) and 4.10(b)(xii));
   (14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other
Persons;
   (15) Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases
of contract rights or licenses or leases of intellectual property, in each case, in the ordinary course of business;
   (16) Investments of a Restricted Subsidiary acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated
with the Issuer or a Restricted Subsidiary in a transaction that is not prohibited by Section

                                                                         28
5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or
consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation and do not constitute a material
portion of the assets of the entity so acquired; and
   (17) additional Investments in an aggregate amount, taken together with all other Investments made pursuant to this clause (17) that are at
that time outstanding (without giving effect to any writedown of the value thereof or the sale of an Unrestricted Subsidiary to the extent the
proceeds of such sale do not consist of cash or have not been subsequently sold or transferred for cash or marketable securities), not to exceed
the greater of (a) $25.0 million or (b) 10.0% of Total Assets as of the date any such Investment is made.
   “ Permitted Liens ” means, with respect to any Person:
   (1) ABL Liens securing (a) Indebtedness and related Obligations Incurred and outstanding pursuant to Section 4.08(b)(i) and/or (b) Hedging
Obligations and/or (c) Bank Product Obligations; provided that (A) any such Liens on the Notes Priority Collateral shall be junior in priority to
the Liens on the Notes Priority Collateral securing the Notes and (B) the holder of such Liens either (x) is subject to an intercreditor agreement
consistent with the Intercreditor Agreement on the same basis as the secured parties under the ABL Facility or (y) is or agrees to become bound
by the terms of the Intercreditor Agreement on the same basis as the secured parties under the ABL Facility;
    (2) pledges or deposits by such Person under workers‟ compensation laws, unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party,
or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, or deposits as security for contested taxes or import or customs duties or for the payment of rent,
in each case Incurred in the ordinary course of business;
   (3) Liens imposed by law, including carriers‟, warehousemen‟s, mechanics‟, materialmen‟s and repairmen‟s Liens, Incurred in the ordinary
course of business; in each case for sums not yet overdue for a period of more than 30 days or being contested in good faith by appropriate
actions;
   (4) Liens for taxes, assessments or other governmental charges not yet subject to penalties for nonpayment or that are being contested in
good faith by appropriate proceedings provided appropriate reserves required pursuant to GAAP have been made in respect thereof;
    (5) Liens in favor of issuers of surety or performance bonds or letters of credit or bankers‟ acceptances or similar obligations issued pursuant
to the

                                                                         29
request of and for the account of such Person in the ordinary course of its business; provided , however , that such letters of credit do not
constitute Indebtedness;
   (6) minor survey exceptions, minor encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights of
way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including,
without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to the
conduct of the business of such Person or to the ownership of its properties that do not in the aggregate materially adversely affect the value of
said properties or materially impair their use in the operation of the business of such Person;
   (7) Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien
on the same property securing such Hedging Obligation;
   (8) leases, licenses, subleases and sublicenses of assets granted to others in the ordinary course of business which do not materially interfere
with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries and do not secure any Indebtedness;
    (9) judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded, adequate reserves with respect thereto
are maintained on the books of such Person in accordance with GAAP, and any appropriate legal proceedings which may have been duly
initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not
expired;
   (10) Liens securing Indebtedness Incurred and outstanding under Section 4.08(b)(viii); provided that:
     (a) the aggregate principal amount of Indebtedness secured by such Liens is otherwise permitted to be Incurred under this Indenture and
  does not exceed the cost of the assets or property so acquired, constructed or improved; and
     (b) such Liens are created within 180 days of construction, acquisition or improvement of such assets or property and do not encumber
  any other assets or property of the Issuer or any Restricted Subsidiary other than such assets or property and assets affixed or appurtenant
  thereto;
   (11) Liens within the general parameters customary in the banking industry relating to banker‟s Liens, rights of set-off or similar rights and
remedies as to deposit accounts or other accounts maintained with a depositary or custodial institution; provided that:

                                                                         30
      (a) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Issuer in excess
  of those set forth by regulations promulgated by the Federal Reserve Board; and
      (b) such deposit account is not intended by the Issuer or any Restricted Subsidiary to provide collateral to the depository institution;
   (12) Liens arising from financing statement filings under the Uniform Commercial Code as in effect in any applicable jurisdiction regarding
operating leases entered into by the Issuer and its Restricted Subsidiaries in the ordinary course of business;
   (13) Liens existing on the Issue Date (other than Liens permitted under clause (1) of this definition);
   (14) Liens on property or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary; provided , however , that
such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such other Person becoming a Restricted
Subsidiary; provided further , however , that any such Lien may not extend to any other property owned by the Issuer or any Restricted
Subsidiary;
   (15) Liens on property at the time the Issuer or a Restricted Subsidiary acquired the property, including any acquisition by means of a
merger or consolidation with or into the Issuer or any Restricted Subsidiary; provided , however , that such Liens are not created, Incurred or
assumed in connection with, or in contemplation of, such acquisition; provided further , however , that such Liens may not extend to any other
property owned by the Issuer or any Restricted Subsidiary;
   (16) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary;
   (17) Liens securing the Notes and Note Guarantees issued on the Issue Date and any obligations owing to the Trustee or the Notes Agent
under this Indenture, the Security Documents or the Intercreditor Agreement;
    (18) Liens securing Refinancing Indebtedness Incurred to refinance, refund, replace, amend, extend or modify, as a whole or in part,
Indebtedness that was previously so secured pursuant to clauses (10), (13), (14), (15), (17) and (18) of this definition, provided that any such
Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect
thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced
or is in respect of property that is the security for a Permitted Lien hereunder;

                                                                         31
   (19) any interest or title of a lessor under any Capitalized Lease Obligation or operating lease;
   (20) Liens in favor of the Issuer or any Guarantor;
   (21) Liens under industrial revenue, municipal or similar bonds;
    (22) Liens solely on any cash earnest money deposits made by the Issuer or any of the Restricted Subsidiaries in connection with any letter
of intent or purchase agreement in respect of any Investment permitted under this Indenture;
   (23) Liens arising solely from precautionary Uniform Commercial Code financing statements or consignments entered into in connection
with any transaction otherwise permitted under this Indenture;
   (24) Liens on Equity Interests in joint ventures securing obligations of such joint ventures;
   (25) Liens on proceeds of insurance policies securing insurance premiums financing arrangements; provided , that such Liens are limited to
the applicable unpaid insurance premiums; and
   (26) Liens securing Obligations relating to any Indebtedness permitted to be Incurred pursuant to Section 4.08(b)(xii); provided that (a) any
Liens securing Obligations relating to any Refinancing Indebtedness permitted to be Incurred pursuant to Section 4.08(b)(xii) extend only to
the categories of assets that secured the Indebtedness being refunded, replaced, redeemed, extended, amended, modified or refinanced; and
   (27) Liens securing Pari Passu Indebtedness permitted to be Incurred under Section 4.08; provided that, with respect to Liens securing such
Pari Passu Indebtedness permitted under this clause (27), at the time of the Incurrence and after giving pro forma effect thereto and the
application of net proceeds thereof, the Secured Leverage Ratio would be no greater than 4.25 to 1.0.
   “ Permitted Tax Distribution ” means, (i) so long as the Issuer is an S Corporation (or a qualified subsidiary thereof or is a substantially
similar pass-through entity for federal, state or local income tax purposes), the making of one or more payments to the owners of its Capital
Stock, for the sole purpose of allowing such owners to pay federal, state and local income and alternative minimum taxes (including estimated
income taxes then payable) on the estimated amount of the taxable income of the Issuer and its Subsidiaries that is allocated to such owners, as
determined in good faith by Issuer in consultation with its tax advisors and after taking into account all available credits and deductions;
provided that a proportionate distribution to all such owners shall be permitted if required to maintain such S Corporation or similar
pass-through status, and (ii) if

                                                                         32
the Issuer converts to a Subchapter C corporation, the making of one or more payments for the sole purpose of allowing the Issuer and its
Subsidiaries to pay federal, foreign, state and local income and alternative minimum taxes (including estimated income taxes then payable) on
the actual or estimated amount of the taxable income of the Issuer and its Subsidiaries (or any consolidated, combined or unitary group of
which the Issuer and its Subsidiaries are a part) (as determined in good faith by the Issuer in consultation with its tax advisors and after taking
into account all available credits and deductions).
   “ Person ” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision hereof or any other entity.
  “ Pledge Agreement ” means the pledge agreement dated March 25, 2011, among the Notes Agent, the Issuer and the Guarantors, as
amended, supplemented or otherwise modified from time to time, including pursuant to a joinder agreement.
   “ Preferred Stock, ” as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated)
that is preferred as to the payment of dividends upon liquidation, dissolution or winding up.
   “ Principal ” means Luke Hillier, Daniel Clarkson and R. Scott LaRose.
    “ Rating Agencies ” means Standard & Poor‟s Ratings Group, Inc. and Moody‟s Investors Service, Inc. or if Standard & Poor‟s Ratings
Group, Inc. or Moody‟s Investors Service, Inc. or both shall not make a rating on the Notes publicly available, a nationally recognized
statistical rating agency or agencies, as the case may be, selected by the Issuer (as certified by a resolution of the Board of Directors) which
shall be substituted for Standard & Poor‟s Ratings Group, Inc. or Moody‟s Investors Service, Inc. or both, as the case may be.
  “ Record Date ” for the interest payable on any applicable Interest Payment Date means each March 15 or September 15 (whether or not a
Business Day) preceding such Interest Payment Date.
    “ Refinancing Indebtedness ” means Indebtedness that is Incurred to refund, refinance, replace, exchange, renew, repay, amend, modify or
extend (including pursuant to any defeasance or discharge mechanism) (collectively, “refinance , ” “refinances” and “refinanced” shall each
have a correlative meaning) any Indebtedness existing on the Issue Date or Incurred in compliance with this Indenture (including Indebtedness
of the Issuer that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of the Issuer or another Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness, provided,
however , that:

                                                                         33
   (1) (a) if the Stated Maturity of the Indebtedness being refinanced is earlier than the Stated Maturity of the Notes, the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being refinanced or (b) if the Stated Maturity of the
Indebtedness being refinanced is later than the Stated Maturity of the Notes, the Refinancing Indebtedness has a Stated Maturity at least
91 days later than the Stated Maturity of the Notes;
   (2) the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than
the Average Life of the Indebtedness being refinanced;
   (3) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue
price) that is equal to or less than the sum of (a) the aggregate principal amount (or if issued with original issue discount, the aggregate accreted
value) then outstanding of the Indebtedness being refinanced plus (b) without duplication, any additional Indebtedness Incurred to pay interest
or premiums required by the instruments governing such existing Indebtedness and fees, underwriting discounts and other costs and expenses
Incurred in connection therewith;
   (4) if the Indebtedness being refinanced is subordinated in right of payment to the Notes or the Note Guarantee, such Refinancing
Indebtedness is subordinated in right of payment to the Notes or the Note Guarantee on terms at least as favorable to the Holders as those
contained in the documentation governing the Indebtedness being refinanced; and
  (5) Refinancing Indebtedness shall not include Indebtedness of a Non-Guarantor Subsidiary that refinances Indebtedness of the Issuer or a
Guarantor.
   “ Related Business Assets ” means assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any
assets received by the Issuer or a Restricted Subsidiary in exchange for assets transferred by the Issuer or a Restricted Subsidiary shall not be
deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person
would become a Restricted Subsidiary.
   “ Related Party ” means:
   (1) any immediate family member of any Principal; or
   (2) any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners
or Persons beneficially holding a majority (and controlling) voting and economic interest of which consist of any one or more Principals and/or
such other Persons referred to in the immediately preceding clause (1) of this definition.

                                                                         34
   “ Responsible Officer ” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person‟s knowledge of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
   “ Restricted Investment ” means any Investment other than a Permitted Investment.
   “ Restricted Subsidiary ” means any Subsidiary of the Issuer other than an Unrestricted Subsidiary.
   “ SEC ” means the United States Securities and Exchange Commission.
   “ Secured Indebtedness ” means any Indebtedness of the Issuer or any of its Restricted Subsidiaries secured by a Lien.
   “ Secured Leverage Ratio ” means as of any date of determination, the ratio of (a) the Secured Indebtedness of the Issuer and its Restricted
Subsidiaries, as determined on a consolidated basis, as of the last day of the fiscal quarter ending on, or most recently ended prior to, such date
of determination to, after giving effect to the transaction giving rise to the need to calculate the Secured Leverage Ratio (b) Consolidated
EBITDA for the period consisting of the immediately preceding four consecutive fiscal quarters of the Issuer ending on, or most recently ended
prior to, such date of determination for which internal financial statements are available; provided that Consolidated EBITDA shall be
calculated in the manner contemplated by, and subject to all the adjustments provided in, the definition of “Consolidated Coverage Ratio.”
   “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
  “ Security Agreement ” means the security agreement dated March 25, 2011, among the Notes Agent, the Issuer and the Guarantors, as
may be amended, supplemented or otherwise modified from time to time, including pursuant to a joinder agreement.
   “ Security Documents ” means the security agreements (including the Security Agreement and the Pledge Agreement), pledge agreements,
collateral assignments, mortgages and related agreements, as amended, supplemented, modified, extended, restructured, renewed, restated or
replaced in whole or in part from time to time, creating the security interests in the properties and assets of the Issuer and the Guarantors, as
contemplated by this Indenture.

                                                                           35
   “ Senior Indebtedness ” means Indebtedness of the Issuer or any Guarantor unless the instrument under which such Indebtedness is
Incurred expressly provides that it is or subordinated in right of payment to the Notes or any related Note Guarantee.
  “ Significant Subsidiary ” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Issuer within the meaning of
Rule 1-02 under Regulation S-X promulgated by the SEC.
  “ Similar Business ” means any business conducted or proposed to be conducted by the Issuer and its Restricted Subsidiaries on the Issue
Date or any business that is similar, reasonably related, incidental or ancillary thereto.
   “ Stated Maturity ” means, with respect to any security, the date specified in the agreement governing or certificate relating to such
Indebtedness as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory
redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date
originally scheduled for the payment thereof.
   “ Subordinated Obligations ” means, with respect to the Notes,
   (1) any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes; and
  (2) any Indebtedness of any Guarantor which is by its terms subordinated in right of payment to the Note Guarantee of such entity of the
Notes.
    “ Subsidiary ” of any Person means (a) any corporation, association or other business entity (other than a partnership, joint venture, limited
liability company or similar entity) of which more than 50% of the total ordinary voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof (or Persons performing similar
functions) or (b) any partnership, joint venture limited liability company or similar entity of which more than 50% of the capital accounts,
distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, is, in the case of clauses (a) and (b),
at the time owned or controlled, directly or indirectly, by (1) such Person, (2) such Person and one or more Subsidiaries of such Person or (3)
one or more Subsidiaries of such Person. Unless otherwise specified herein, each reference to a Subsidiary shall refer to a Subsidiary of the
Issuer.
   “ Transactions ” means the issuance of the Notes and borrowings under the ABL Facility on the Issue Date and the other transactions
occurring in connection therewith or incidental thereto on or about the Issue Date, including (a) the repayment of the Issuer‟s existing term loan
facility, (b) the distribution of cash to holders of Equity Interests of the Issuer, (c) the payment of cash bonuses to

                                                                            36
certain members of senior management of the Issuer, (d) the payment of related transaction fees and expenses and (e) any other transactions
referred to under the caption “Use of proceeds” in the Offering Memorandum.
  “ Total Assets ” means the total assets of the Issuer and its Restricted Subsidiaries, determined on a consolidated basis in accordance with
GAAP, as shown on the most recent balance sheet of the Issuer.
    “ Treasury Rate ” means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar
market data)) most nearly equal to the period from the redemption date to April 1, 2015; provided, however , that if the period from the
redemption date to April 1, 2015 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is
given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average
yields of United States Treasury securities for which such yields are given, except that if the period from the redemption date to April 1, 2015
is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year
shall be used.
   “ Trust Indenture Act ” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-777bbbb).
   “ Trustee ” means the party named as such in this Indenture until a successor replaces it and, thereafter, means such successor.
   “ Uniform Commercial Code ” means the New York Uniform Commercial Code as in effect from time to time.
   “ Unrestricted Subsidiary ” means:
   (1) any Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of
the Issuer in the manner provided below; and
   (2) any Subsidiary of an Unrestricted Subsidiary.
   The Board of Directors of the Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary
or a Person becoming a Subsidiary through merger or consolidation or Investment therein) to be an Unrestricted Subsidiary only if:

                                                                        37
   (1) neither such Subsidiary nor any of its Subsidiaries owns any Capital Stock or Indebtedness of or has any Investment in, or owns or holds
any Lien on any property of, any other Subsidiary of the Issuer that is not a Subsidiary of the Subsidiary to be so designated or otherwise an
Unrestricted Subsidiary;
  (2) all the Indebtedness of such Subsidiary and its Subsidiaries shall, at the date of designation, and shall at all times thereafter, consist of
Non-Recourse Debt;
   (3) such designation and the Investment of the Issuer in such Subsidiary complies with Section 4.06;
   (4) such Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or
substantially all of the business of the Issuer and its Subsidiaries;
   (5) such Subsidiary is a Person with respect to which neither the Issuer nor any of its Restricted Subsidiaries has any direct or indirect
obligation:
      (a) to subscribe for additional Capital Stock of such Person; or
      (b) to maintain or preserve such Person‟s financial condition or to cause such Person to achieve any specified levels of operating results;
   and
   (6) on the date such Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is not a party to any agreement, contract,
arrangement or understanding with the Issuer or any Restricted Subsidiary with terms substantially less favorable to the Issuer than those that
might have been obtained from Persons who are not Affiliates of the Issuer.
    Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by filing with the Trustee a resolution of the
Board of Directors of the Issuer giving effect to such designation and an Officer‟s Certificate certifying that such designation complies with the
foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary,
it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be
deemed to be Incurred as of such date.
   The Board of Directors of the Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately
after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence
thereof and either:

                                                                          38
   (1) the Issuer could Incur at least $1.00 of additional Indebtedness pursuant to Section 4.08(a) on a pro forma basis taking into account such
designation; or
   (2) the pro forma Consolidated Coverage Ratio for the Issuer would be equal to or greater than the Issuer‟s actual Consolidated Coverage
Ratio for the applicable four-quarter period.
   “ U.S. Government Securities ” means securities that are (a) direct obligations of the United States of America for the timely payment of
which its full faith and credit is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation of the United
States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary
receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Securities
or a specific payment of principal of or interest on any such U.S. Government Securities held by such custodian for the account of the holder of
such depositary receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Securities or the
specific payment of principal of or interest on the U.S. Government Securities evidenced by such depositary receipt.
   “ Variable Interest Entity ” or “ VIE ” means any entity that the Issuer or Atlantic Diving Supply, Inc. in its reasonable judgment, is
required to consolidate for financial reporting purposes in accordance with GAAP, including the Financial Accounting Standards Board
Interpretation No. 46(R) (“FIN 46”), but the accounts of which the Issuer or Atlantic Diving Supply, Inc. would not be required to so
consolidate absent application of FIN 46.
   “ Voting Stock ” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election
of directors, managers or trustees, as applicable, of such Person.
    “ Wholly Owned Subsidiary ” of any Person means a Subsidiary, all of the Capital Stock of which (other than directors‟ qualifying shares)
is owned by such Person or one or more other Wholly Owned Subsidiaries of such Person.
   Section 1.02 . Other Definitions.

Term                                                                                                                   Defined in Section
“ Acceptable Commitment ”                                                                                                  4.09(b)
“ Affiliate Transaction ”                                                                                                   4.10(a)
“ Agent Members ”                                                                                                   2.1(c) of Appendix A

                                                                         39
Term                                                 Defined in Section
“ Application Period ”                                    4.09(b)
“ Applicable Procedures ”                          1.1(a) of Appendix A
“ Asset Sale Offer ”                                      4.09(d)
“ Asset Sale Offer Amount ”                               3.10(b)
“ Asset Sale Offer Period ”                               3.10(b)
“ Asset Sale Offer Purchase Date ”                        3.10(b)
“ Authentication Order ”                                   2.02(c)
“ Automatic Exchange ”                             2.3(h) of Appendix A
“ Automatic Exchange Date ”                        2.3(h) of Appendix A
“ Automatic Exchange Notice ”                      2.3(h) of Appendix A
“ Automatic Exchange Note Date ”                   2.3(h) of Appendix A
“ Calculation Date ”                                        1.01
“ Change of Control Offer ”                                4.12(a)
“ Change of Control Payment ”                              4.12(a)
“ Change of Control Payment Date ”                         4.12(a)
“ Clearstream ”                                    1.1(a) of Appendix A
“ Collateral Excess Proceeds ”                             4.09(c)
“ Collateral Proceeds Offer ”                              4.09(c)
“ Collateral Proceeds Offer Amount ”                      3.09(b)
“ Collateral Proceeds Offer Period ”                      3.09(b)
“ Collateral Proceeds Offer Purchase Date ”               3.09(b)
“ Covenant Defeasance”                                      8.03
“ cross acceleration provision ”                           6.01(a)
“ Definitive Notes”                                2.1(d) of Appendix A
“ Definitive Notes Legend ”                        2.3(e) of Appendix A
“ DTC ”                                                   2.03(b)
“ Distribution Compliance Period ”                 1.1(a) of Appendix A
“ Euroclear ”                                      1.1(a) of Appendix A
“ Event of Default ”                                       6.01(a)
“ Excess Proceeds ”                                       4.09(d)
“ Expiration Date ”                                        1.05(j)
“ Global Note ”                                    2.1(b) of Appendix A
“ Global Notes Legend ”                            2.3(e) of Appendix A
“Guaranteed Obligations”                                  11.01(a)
“ IAI ”                                            1.1(a) of Appendix A
“ IAI Global Note ”                                2.1(b) of Appendix A
“ IAI Notes ”                                      2.1(a) of Appendix A
“judgment default provision”                               6.01(a)
“ Legal Defeasance ”                                       8.02(a)
“ Note Register ”                                          2.03(a)
“ obligor ”                                                 1.04
“ OID Notes Legend ”                               2.3(e) of Appendix A
“ Paying Agent ”                                           2.03(a)
“ payment default ”                                        6.01(a)

                                              40
Term                                                                                                                  Defined in Section
“ Permitted Parties ”                                                                                                      4.03(c)
“ QIB ”                                                                                                            1.1(a) of Appendix A
“ Registrar ”                                                                                                              2.03(a)
“ Regulation S ”                                                                                                   1.1(a) of Appendix A
“ Regulation S Global Note ”                                                                                       2.1(b) of Appendix A
“ Regulation S Notes ”                                                                                             2.1(a) of Appendix A
“ Reinstatement Date ”                                                                                                    4.14(b)
“ Restricted Notes Legend ”                                                                                        2.3(e) of Appendix A
“ Restricted Payment ”                                                                                                     4.06(a)
“ Rule 144 ”                                                                                                       1.1(a) of Appendix A
“ Rule 144A ”                                                                                                      1.1(a) of Appendix A
“ Rule 144A Global Note ”                                                                                          2.1(b) of Appendix A
“ Rule 144A Notes ”                                                                                                2.1(a) of Appendix A
“ Rule 501 ”                                                                                                       1.1(a) of Appendix A
“ Rule 904 ”                                                                                                       1.1(a) of Appendix A
“ Second Commitment ”                                                                                                     4.09(b)
“ Successor Company”                                                                                                       5.01(a)
“ Successor Guarantor ”                                                                                                    5.01(c)
“ Suspended Covenants ”                                                                                                    4.14(a)
“ Suspended Period ”                                                                                                      4.14(b)
“ Transfer Restricted Note ”                                                                                       1.1(a) of Appendix A
“ Unrestricted Global Note ”                                                                                       1.1(a) of Appendix A
   Section 1.03 . Rules of Construction.
   Unless the context otherwise requires:
  (1) a term defined in Section 1.01 or 1.02 has the meaning assigned to it therein, and a term used herein that is defined in the Trust Indenture
Act, either directly or by reference therein, shall have the meaning assigned to it therein;
   (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
   (3) “or” is not exclusive;
   (4) words in the singular include the plural, and words in the plural include the singular;
   (5) provisions apply to successive events and transactions;
   (6) unless the context otherwise requires, any reference to an “Appendix,” “Article,” “Section,” “clause,” “Schedule” or “Exhibit” refers to
an Appendix, Article, Section, clause, Schedule or Exhibit, as the case may be, of this Indenture;

                                                                         41
   (7) the words “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not any particular Article, Section,
clause or other subdivision;
   (8) “including” means including without limitation;
   (9) references to sections of, or rules under, the Securities Act, the Exchange Act or the Trust Indenture Act shall be deemed to include
substitute, replacement or successor sections or rules adopted by the SEC from time to time;
   (10) unless otherwise provided, references to agreements and other instruments shall be deemed to include all amendments and other
modifications to such agreements or instruments, but only to the extent such amendments and other modifications are not prohibited by the
terms of this Indenture;
   (11) in the event that a transaction meets the criteria of more than one category of permitted transactions or listed exceptions, the Issuer may
classify such transaction as it, in its sole discretion, determines; and
   (12) references to sections of or rules under the Securities Act will be deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time.
   Section 1.04 . Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the Trust Indenture Act as
applicable to this Indenture, the provision is incorporated by reference in and made a part of this Indenture.
   The following Trust Indenture Act term used in this Indenture has the following meaning:
   “ obligor ” on the Notes and the Guarantees means the Issuer and the Guarantors, respectively, and any successor obligor upon the Notes
and the Guarantees, respectively.
   All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute
or defined by SEC rule under the Trust Indenture Act have the meanings so assigned to them.
   Section 1.05 . Acts of Holders.
   (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an
agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to

                                                                         42
the Trustee and, where it is hereby expressly required, to the Issuer and the Guarantors. Proof of execution of any such instrument or of a
writing appointing any such agent, or the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and (subject to
Section 7.01) conclusive in favor of the Trustee, the Issuer and the Guarantors, if made in the manner provided in this Section 1.05.
   (b) [Intentionally Omitted]
   (c) The ownership of Notes shall be proved by the Note Register.
    (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof,
in respect of any action taken, suffered or omitted by the Trustee, the Issuer or the Guarantors in reliance thereon, whether or not notation of
such action is made upon such Note.
    (e) The Issuer may set a record date for purposes of determining the identity of Holders entitled to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, or to vote on any action authorized or
permitted to be taken by Holders; provided that the Issuer may not set a record date for, and the provisions of this paragraph shall not apply
with respect to, the giving or making of any notice, declaration, request or direction referred to in clause (f) below. Unless otherwise specified,
if not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such
vote, prior to such vote, any such record date shall be the later of 30 days prior to the first solicitation of such consent or vote or the date of the
most recent list of Holders furnished to the Trustee prior to such solicitation or vote. If any record date is set pursuant to this clause (e), the
Holders on such record date, and only such Holders, shall be entitled to make, give or take such request, demand, authorization, direction,
notice, consent, waiver or other action (including revocation of any action), whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless made, given or taken on or prior to the applicable Expiration Date by Holders
of the requisite principal amount of Notes, or each affected Holder, as applicable, on such record date. Promptly after any record date is set
pursuant to this paragraph, the Issuer, at its own expense, shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to each Holder in the manner set forth in Section 13.02.
   (f) The Trustee may set any day as a record date for the purpose of determining the Holders entitled to join in the giving or making of (i) any
notice of default under Section 6.01(a), (ii) any declaration of acceleration referred to in Section 6.02, (iii) any direction referred to in
Section 6.05 or (iv) any request to institute proceedings referred to in Section 6.06(b). If any record date is set

                                                                           43
pursuant to this paragraph, the Holders on such record date, and only such Holders, shall be entitled to join in such notice, declaration, request
or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder
unless made, given or taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Notes or each affected
Holder, as applicable, on such record date. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Issuer‟s expense,
shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Issuer in writing
and to each Holder in the manner set forth in Section 13.02.
    (g) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard
to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount. Any notice given or action taken by a Holder or its agents with regard to
different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each
such different part.
   (h) Without limiting the generality of the foregoing, a Holder, including a Depositary that is the Holder of a Global Note, may make, give or
take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action
provided in this Indenture to be made, given or taken by Holders, and a Depositary that is the Holder of a Global Note, may provide its proxy
or proxies to the beneficial owners of interests in any such Global Note through such Depositary‟s standing instructions and customary
practices.
   (i) The Issuer may fix a record date for the purpose of determining the Persons who are beneficial owners of interests in any Global Note
held by a Depositary entitled under the procedures of such Depositary, if any, to make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or
taken by Holders; provided that if such a record date is fixed, only the Holders on such record date or their duly appointed proxy or proxies
shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not
such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other action
shall be effective hereunder unless made, given or taken on or prior to the applicable Expiration Date.
   (j) With respect to any record date set pursuant to this Section 1.05, the party hereto that sets such record date may designate any day as the
“ Expiration Date ” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be
effective unless notice of the

                                                                         44
proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Notes in the manner set forth in
Section 13.02, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to
this Section 1.05, the party hereto which set such record date shall be deemed to have initially designated the 120th day after such record date
as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this clause (j).


                                                                    ARTICLE 2
                                                                    THE NOTES
   Section 2.01 . Form and Dating; Terms.
    (a) Provisions relating to the Initial Notes, Additional Notes and any other Notes issued are set forth in Appendix A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Notes and the Trustee‟s certificate of authentication shall each be substantially
in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations,
legends or endorsements required by law, rules or agreements with national securities exchanges to which the Issuer or any Guarantor is
subject, if any, or usage ( provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be
dated the date of its authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
   (b) The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.
   The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer, the
Guarantors, the Trustee and the Notes Agent, by their execution and delivery of this Indenture, expressly agree to such terms and provisions
and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the
provisions of this Indenture shall govern and be controlling.
   The Notes shall be subject to repurchase by the Issuer pursuant to a Collateral Proceeds Offer or an Asset Sale Offer as provided in
Section 4.09 or a Change of Control Offer as provided in Section 4.12. The Notes shall not be redeemable, other than as provided in Article 3.
    Additional Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Issuer without notice to or
consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status,
redemption or otherwise (other than issue date, issue price and, if applicable, the first Interest Payment Date and the initial interest accrual date)
as the Initial Notes; provided that the Issuer‟s

                                                                          45
ability to issue Additional Notes shall be subject to the Issuer‟s compliance with Section 4.08. Any Additional Notes shall be issued with the
benefit of an indenture supplemental to this Indenture.
   Section 2.02 . Execution and Authentication.
   (a) At least one Officer shall execute the Notes on behalf of the Issuer by manual or facsimile signature. If an Officer whose signature is on
a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.
    (b) A Note shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated substantially
in the form of Exhibit A attached hereto by the manual signature of an authorized signatory of the Trustee. The signature shall be conclusive
evidence that the Note has been duly authenticated and delivered under this Indenture.
   (c) On the Issue Date, the Trustee shall, upon receipt of a written order of the Issuer signed by an Officer (an “ Authentication Order ”),
authenticate and deliver the Initial Notes. In addition, at any time and from time to time, the Trustee shall upon receipt of an Authentication
Order, authenticate and deliver any Additional Notes, in an aggregate principal amount specified in such Authentication Order for such
Additional Notes issued hereunder.
   (d) The Trustee may appoint an authenticating agent to authenticate Notes. An authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating
agent has the same rights as a Paying Agent to deal with Holders or an Affiliate of the Issuer.
   Section 2.03 . Registrar and Paying Agent.
   (a) The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“ Registrar ”)
and at least one office or agency where Notes may be presented for payment (“ Paying Agent ”). The Registrar shall keep a register of the
Notes (“ Note Register ”) and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional
paying agents. The term “ Registrar ” includes any co-registrar, and the term “ Paying Agent ” includes any additional paying agent. The
Issuer may change any Paying Agent or Registrar without prior notice to any Holder. The Issuer shall notify the Trustee in writing of the name
and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Issuer or any of its Subsidiaries may act as Paying Agent or Registrar.
   (b) The Issuer initially appoints The Depository Trust Company (“ DTC ”) to act as Depositary with respect to the Global Notes. The Issuer

                                                                         46
initially appoints the Trustee to act as Paying Agent and Registrar for the Notes and to act as a custodian with respect to the Global Notes.
   Section 2.04 . Paying Agent To Hold Money in Trust. The Issuer shall, no later than 11:00 a.m. (New York City time) on each due date for
the payment of principal of, premium, if any, and interest on any of the Notes, deposit with a Paying Agent a sum sufficient to pay such
amount, such sum to be held in trust for the Holders entitled to the same, and (unless such Paying Agent is the Trustee) the Issuer shall
promptly notify the Trustee of its action or failure so to act. The Issuer shall require each Paying Agent other than the Trustee to agree in
writing that such Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by such Paying Agent for the
payment of principal of, premium, if any, and interest on the Notes, and shall notify the Trustee in writing of any default by the Issuer in
making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the
Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, a
Paying Agent (if other than the Issuer or a Subsidiary) shall have no further liability for the money. If the Issuer or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any
bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.
   Section 2.05 . Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of
the names and addresses of all Holders and shall otherwise comply with Trust Indenture Act Section 312(a). If the Trustee is not the Registrar,
the Issuer shall furnish to the Trustee at least five Business Days before each Interest Payment Date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders, and
the Issuer shall otherwise comply with Trust Indenture Act Section 312(a).
   Section 2.06 . Transfer and Exchange.
  (a) The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in
compliance with Appendix A.
  (b) To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 or at the Registrar‟s request.
   (c) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange (other than pursuant to Section 2.07), but the Holders shall

                                                                         47
be required to pay any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 3.10, 4.09, 4.12 and 9.05).
   (d) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be
the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of transfer or exchange.
   (e) Neither the Issuer nor the Registrar shall be required (i) to issue, to register the transfer of or to exchange any Note during a period
beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 and ending at the close
of business on the day of selection, (ii) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part or (iii) to register the transfer of or to exchange any Note between a Record Date
and the next succeeding Interest Payment Date.
    (f) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the
Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of, premium,
if any, and (subject to the record date provisions of the Notes) interest on such Notes and for all other purposes, and none of the Trustee, any
Agent or the Issuer shall be affected by notice to the contrary.
   (g) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer designated pursuant to Section 4.02, the
Issuer shall execute, and the Trustee shall authenticate and mail, in the name of the designated transferee or transferees, one or more
replacement Notes of any authorized denomination or denominations of a like aggregate principal amount.
   (h) At the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination or denominations of a like
aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency. Whenever any Global Notes or Definitive
Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and mail, the replacement Global Notes and
Definitive Notes which the Holder making the exchange is entitled to in accordance with the provisions of Section 2.02.
   (i) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by mail or by facsimile or electronic transmission in PDF format.

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   Section 2.07 . Replacement Notes. If a mutilated Note is surrendered to the Trustee or if a Holder claims that its Note has been lost,
destroyed or wrongfully taken and the Issuer and the Trustee receives evidence to its satisfaction of the ownership and loss, destruction or theft
of such Note, the Issuer shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the
Trustee‟s requirements are otherwise met. An indemnity bond must be provided by the Holder that is sufficient in the judgment of (i) the
Trustee to protect the Trustee and (ii) the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent, from any loss that
any of them may suffer if a Note is replaced. The Issuer may charge the Holder for the expenses of the Issuer and the Trustee in replacing a
Note. Every replacement Note is a contractual obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder. Notwithstanding the foregoing provisions of this Section 2.07, in case any
mutilated, destroyed, lost or wrongfully taken Note has become or will become due and payable within 90 days, the Issuer in its discretion may,
instead of issuing a new Note, pay such Notes.
   Section 2.08 . Outstanding Notes.
   (a) The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09, a Note does not cease to be outstanding because the Issuer
or an Affiliate of the Issuer holds the Note; provided that Notes held by the Issuer or a Subsidiary of the Issuer shall not be deemed to be
outstanding for purposes of Section 3.07(b).
   (b) If a Note is replaced or paid pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that
the replaced Note is held by a protected purchaser, as such term is defined in Section 8-303 of the Uniform Commercial Code in effect in the
State of New York.
   (c) If the principal amount of any Note is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue
from and after the date of such payment.
   (d) If a Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, on the maturity date, any redemption date or
any date of purchase pursuant to an Offer to Purchase, money sufficient to pay Notes payable or to be redeemed or purchased on that date, then
on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.
   Section 2.09 . Treasury Notes. In determining whether the Holders of the requisite principal amount of Notes have concurred in any
direction, waiver or

                                                                          49
consent, Notes owned by the Issuer, or by any Affiliate of the Issuer, shall be considered as though not outstanding, except that for the purposes
of determining whether the Trustee shall be protected in conclusively relying on any such direction, waiver or consent, only Notes that a
Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Notes so owned which have been pledged in good
faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee‟s right to deliver any such direction, waiver
or consent with respect to the Notes and that the pledgee is not the Issuer or any obligor upon the Notes or any Affiliate of the Issuer or of such
other obligor. Notwithstanding the foregoing, Notes that are to be acquired by the Issuer or an Affiliate of the Issuer pursuant to an exchange
offer, tender offer or other agreement shall not be deemed to be owned by such entity until legal title to such Notes passes to such entity.
   Section 2.10 . Temporary Notes. Until definitive Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have
variations that the Issuer considers appropriate for temporary Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes. Holders and beneficial holders, as the case may be, of temporary Notes shall be
entitled to all of the benefits accorded to Holders, or beneficial holders, respectively, of Notes under this Indenture.
   Section 2.11 . Cancellation. The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee or, at the direction of the
Trustee, the Registrar or Paying Agent, and no one else, shall cancel all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall dispose of cancelled Notes in accordance with its customary procedures (subject to the record retention
requirements of the Exchange Act and of the Trustee). Certification of the cancellation of all cancelled Notes shall, upon the written request of
the Issuer, be delivered to the Issuer. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
   Section 2.12 . Defaulted Interest.
   (a) If the Issuer defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01. The Issuer shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid
on each Note and the date of the proposed payment, and the Issuer shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such defaulted interest or shall

                                                                          50
make arrangements for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of
the Persons entitled to such defaulted interest as provided in this Section 2.12. The Issuer shall fix or cause to be fixed each such special record
date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted
interest. The Issuer shall promptly notify the Trustee in writing of such special record date. At least 15 days before the special record date, the
Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) shall deliver, or cause to be delivered
to each Holder a notice that states the special record date, the related payment date and the amount of such interest to be paid.
   (b) Subject to the foregoing provisions of this Section 2.12 and for greater certainty, each Note delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue
interest, which were carried by such other Note.
   Section 2.13 . CUSIP and ISIN Numbers. The Issuer in issuing the Notes may use CUSIP and/or ISIN numbers (if then generally in use)
and, if so, the Trustee shall use CUSIP and/or ISIN numbers in notices of redemption or exchange or in Offers to Purchase as a convenience to
Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the
Notes or as contained in any notice of redemption or exchange or in Offers to Purchase and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption or exchange or Offer to Purchase shall not be affected by any defect in or
omission of such numbers. The Issuer shall as promptly as practicable notify the Trustee in writing of any change in the CUSIP or ISIN
numbers.


                                                                    ARTICLE 3
                                                                    REDEMPTION
    Section 3.01 . Notices to Trustee. If the Issuer elects to redeem Notes pursuant to Section 3.07, it shall furnish to the Trustee, at least fifteen
Business Days before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 3.03 (unless a shorter
notice shall be agreed to by the Trustee) but not more than 60 days before a redemption date, an Officer‟s Certificate setting forth (i) the
paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date,
(iii) the principal amount of the Notes to be redeemed and (iv) the redemption price, if then ascertainable. If any such redemption is subject to
compliance with a condition provided for herein, such Officer‟s Certificate shall certify that such condition has been complied with or, in the
case of a redemption under Section 3.07(b), shall certify, if such is the case, any conditions to be complied with prior to the redemption date. If
any such future conditions are not

                                                                          51
so complied with, the Issuer shall give the Trustee prompt written notice of such non-compliance, after which the Trustee shall give notice to
the Holders in the same manner as the related notice of redemption was given that such conditions have not been complied with and that the
redemption shall not occur.
   Section 3.02 . Selection of Notes To Be Redeemed or Purchased.
    (a) If less than all of the Notes are to be redeemed pursuant to Section 3.07 or purchased in an Offer to Purchase at any time, the Trustee
shall select the Notes to be redeemed or purchased in compliance with the requirements of the principal national securities exchange (if such
listing is known to a Responsible Officer of the Trustee), if any, on which the Notes are listed or, if the Notes are not listed, then on a pro rata
basis, by lot or by such similar method in accordance with the procedures of the Depositary in the case of Global Notes. In the event of partial
redemption or purchase, the particular Notes to be redeemed or purchased shall be selected, unless otherwise provided herein, not less than 30
nor more than 60 days prior to the redemption date by the Trustee from the then outstanding Notes not previously called for redemption or
purchase.
   (b) The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption or purchase and, in the case of any Note
selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected
shall be in whole multiples of $1,000; no Notes of $2,000 or less shall be redeemed in part, except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess
thereof, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called
for redemption or purchase also apply to portions of Notes called for redemption or purchase.
   Section 3.03 . Notice of Redemption.
    (a) Subject to Section 3.09 and Section 3.10, the Issuer shall mail by first-class, or cause to be mailed by first-class (or, in the case of Notes
held in book-entry form, by electronic transmission), at the expense of the Issuer, notices of redemption of Notes at least 30 days but not more
than 60 days before the redemption date to each Holder whose Notes are to be redeemed at such Holder‟s registered address or otherwise in
accordance with the procedures of the Depositary, except that redemption notices may be mailed more than 60 days prior to a redemption date
if the notice is issued in connection with Article 8 or Article 12. Except as set forth in Section 3.07(b), notices of redemption may not be
conditional.
   (b) The notice shall identify the Notes (including CUSIP number) to be redeemed and shall state:

                                                                           52
      (i) the redemption date;
     (ii) the redemption price, including the portion thereof representing any accrued and unpaid interest; provided , that in connection with a
  redemption under Section 3.07(a), the notice need not set forth the redemption price but only the manner of calculation thereof;
      (iii) if any Note is to be redeemed in part only, the portion of the principal amount of that Note that is to be redeemed;
      (iv) the name and address of the Paying Agent;
      (v) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
     (vi) that, unless the Issuer defaults in making such redemption payment or the Paying Agent is prohibited from making such payment
  pursuant to the terms of this Indenture, interest on Notes called for redemption ceases to accrue on and after the redemption date;
     (vii) the paragraph or subparagraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are
  being redeemed and, in case of a redemption under Section 3.07(b), any conditions to such redemption; and
     (viii) that no representation is made as to the correctness or accuracy of the CUSIP or ISIN number, if any, listed in such notice or printed
  on the Notes.
   (c) At the Issuer‟s written request, the Trustee shall give the notice of redemption in the Issuer‟s name and at the Issuer‟s expense; provided
that the Issuer shall have delivered to the Trustee, at least fifteen Business Days before notice of redemption is required to be sent or caused to
be sent to Holders pursuant to this Section 3.03 (unless a shorter notice shall be agreed to by the Trustee), an Officer‟s Certificate requesting
that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.
   Section 3.04 . Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 3.03, Notes called for
redemption become irrevocably due and payable on the redemption date at the redemption price (except as provided for in Section 3.07(b)).
The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such
notice. In any case, failure to give such notice or any defect in the notice to the Holder of any Note designated for redemption in whole or in
part shall not affect the validity of the proceedings for the redemption of any

                                                                         53
other Note. Subject to Section 3.05, on and after the redemption date, interest ceases to accrue on Notes or portions of Notes called for
redemption.
   Section 3.05 . Deposit of Redemption or Purchase Price.
   (a) No later than 11:00 a.m. (New York City time) on the redemption or purchase date, the Issuer shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest on all Notes to be redeemed or
purchased on that date (except as provided in Section 3.07(e)). The Paying Agent shall promptly pay to each Holder of Notes to be redeemed or
repurchased the applicable redemption or purchase price thereof and accrued and unpaid interest thereon. The Trustee or the Paying Agent shall
promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay
the redemption or purchase price of, and accrued and unpaid interest on, all Notes to be redeemed or purchased.
   (b) If the Issuer complies with the provisions of Section 3.05(a), on and after the redemption or purchase date, interest shall cease to accrue
on the Notes or the portions of Notes called for redemption or purchase. If any Note called for redemption or purchase shall not be so paid upon
surrender for redemption or purchase because of the failure of the Issuer to comply with Section 3.05(a), interest shall be paid on the unpaid
principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest accrued to the redemption
or purchase date not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01.
   Section 3.06 . Notes Redeemed or Purchased in Part. Upon surrender of a Note that is redeemed or purchased in part, the Issuer shall issue
and, upon receipt of an Authentication Order, the Trustee shall promptly authenticate and mail to the Holder (or cause to be transferred by book
entry) at the expense of the Issuer a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered
representing the same Indebtedness to the extent not redeemed or purchased; provided that each new Note shall be in a principal amount of
$2,000 or an integral multiple of $1,000 in excess thereof. It is understood that, notwithstanding anything in this Indenture to the contrary, only
an Authentication Order and not an Opinion of Counsel or Officer‟s Certificate is required for the Trustee to authenticate such new Note.
   Section 3.07 . Optional Redemption.
    (a) At any time prior to April 1, 2015, upon not less than 30 nor more than 60 days‟ prior notice sent by electronic transmission (for Notes
held in book entry form) or mailed by first-class mail to each Holder‟s registered address, the Issuer may redeem the Notes, in whole or in part,
at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium and accrued and unpaid interest, if any,
to the date of redemption (except as provided

                                                                        54
in Section 3.07(e)). Promptly after the determination thereof, the Issuer shall give the Trustee written notice of the redemption price provided
for in this Section 3.07(a), and the Trustee shall not be responsible for such calculation.
    (b) Prior to April 1, 2014, the Issuer may, at its option, on any one or more occasions, redeem up to 35% of the original principal amount of
the Notes (calculated after giving effect to any issuance of Additional Notes) with an amount of cash not to exceed the aggregate net cash
proceeds from one or more Equity Offerings at a redemption price equal to 111% of the aggregate principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the applicable redemption date, subject to the right of Holders of record on the relevant Record Date to
receive interest due on the relevant Interest Payment Date; provided that (i) at least 50% of the original principal amount of Notes (calculated
after giving effect to any issuance of Additional Notes) remains outstanding after each such redemption; and (ii) such redemption occurs within
90 days of the date of closing of each such Equity Offering. Any notice of redemption may be given prior to the completion thereof, and may,
at the Issuer‟s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a related Equity Offering.
   (c) Except pursuant to clause (a) or (b) of this Section 3.07, the Notes shall not be redeemable at the Issuer‟s option prior to April 1, 2015.
   (d) On and after April 1, 2015, the Issuer may redeem all or, from time to time, a part of the Notes upon not less than 30 nor more than
60 days‟ notice sent by electronic transmission (for Notes held in book entry form) or mailed by first-class mail to each Holder‟s registered
address pursuant to Section 3.03 at the following redemption prices (expressed as a percentage of principal amount of the Notes to be
redeemed), plus accrued and unpaid interest on the Notes, if any, to the applicable redemption date (except as provided in Section 3.07(e)), if
redeemed during the twelve-month period beginning on April 1 of the years indicated below:

Year                                                                                                                                 Percentage
2015                                                                                                                                   108.250 %
2016                                                                                                                                   105.500 %
2017 and thereafter                                                                                                                    100.000 %
  (e) If the redemption date pursuant to this Section 3.07 is on or after an interest Record Date and on or before the related Interest Payment
Date, the accrued and unpaid interest, if any, shall be paid to the Person in whose name the Note is registered at the close of business, on such
Record Date, and no additional interest shall be payable to Holders whose Notes shall be subject to redemption by the Issuer.

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   (f) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06.
   (g) The Issuer or its Affiliates may acquire Notes by means other than a redemption, whether by tender offer, open market purchases,
negotiated transactions or otherwise, in accordance with applicable securities laws, so long as such acquisition does not otherwise violate the
terms of this Indenture.
   Section 3.08 . Mandatory Redemption. The Issuer shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
   Section 3.09 . Offers to Repurchase by Application of Collateral Excess Proceeds.
   (a) In the event that, pursuant to Section 4.09, the Issuer shall be required to commence a Collateral Proceeds Offer, the Issuer shall follow
the procedures specified below.
    (b) The Collateral Proceeds Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to
the extent that a longer period is required by applicable law (the “ Collateral Proceeds Offer Period ”). No later than five Business Days after
the termination of the Offer Period (the “ Collateral Proceeds Offer Purchase Date ”), the Issuer shall apply all Collateral Excess Proceeds
(the “ Collateral Proceeds Offer Amount ”) to the purchase of Notes and, if required, Pari Passu Indebtedness (on a pro rata basis, if
applicable), or, if less than the Collateral Proceeds Offer Amount has been tendered, all Notes and Pari Passu Indebtedness tendered in response
to the Collateral Proceeds Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made.
   (c) Upon the commencement of a Collateral Proceeds Offer, the Issuer shall deliver electronically or send, by first-class mail a notice to
each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Collateral Proceeds Offer. The Collateral Proceeds Offer shall be made to all Holders and Holders of such Pari
Passu Indebtedness. The notice, which shall govern the terms of the Collateral Proceeds Offer, shall state:
    (i) that the Collateral Proceeds Offer is being made pursuant to this Section 3.09 and Section 4.09 hereof and the length of time the
  Collateral Proceeds Offer shall remain open;
      (ii) the Collateral Proceeds Offer Amount, the purchase price and the Collateral Proceeds Offer Purchase Date;
      (iii) that any Note not tendered or accepted for payment shall continue to accrue interest;

                                                                        56
     (iv) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Collateral Proceeds Offer
  shall cease to accrue interest after the Collateral Proceeds Offer Purchase Date;
     (v) that any Holder electing to have less than all of the aggregate principal amount of its Notes purchased pursuant to an Collateral
  Proceeds Offer may elect to have Notes purchased in an amount not less than $2,000;
     (vi) that Holders electing to have a Note purchased pursuant to any Collateral Proceeds Offer shall be required to surrender the Note, with
  the form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer by book-entry transfer, to the Paying
  Agent at the address specified in the notice at least two Business Days before the Collateral Proceeds Offer Purchase Date;
     (vii) that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the
  expiration date of the Collateral Proceeds Offer Period, a facsimile transmission or letter setting forth the name of the Holder, the principal
  amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note
  purchased;
     (viii) that, if the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered by the Holders thereof exceeds the Offer
  Amount, the Trustee shall select the Notes and the Issuer shall select such Pari Passu Indebtedness to be purchased on a pro rata basis based
  on the accreted value or principal amount of the Notes or such Pari Passu Indebtedness tendered (with such adjustments as may be deemed
  appropriate by the Trustee so that only Notes in an amount not less than $2,000 are purchased); and
     (ix) that Holders whose certificated Notes were purchased only in part shall be issued new Notes equal in principal amount to the
  unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not
  repurchased.
   (d) On or before the Collateral Proceeds Offer Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata
basis as described in Section 3.09(c)(viii), the Collateral Proceeds Offer Amount of Notes or portions thereof validly tendered pursuant to the
Collateral Proceeds Offer, or if less than the Collateral Proceeds Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to
be delivered to the Trustee the Notes properly accepted, together with an Officer‟s Certificate stating the aggregate principal amount of Notes
or portions thereof so tendered.

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    (e) The Paying Agent shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly
tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt
of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it
being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer‟s Certificate is required for
the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered
representing the same indebtedness to the extent not repurchased. Any Note not so accepted shall be promptly mailed or delivered by the Issuer
to the Holder thereof. The Issuer shall publicly announce the results of the Collateral Proceeds Offer on or as soon as practicable after the
Collateral Proceeds Offer Purchase Date.
   (f) Prior to 11:00 a.m. (New York City time) on the Collateral Proceeds Offer Purchase Date, the Issuer shall deposit with the Trustee or
with the Paying Agent money sufficient to pay the purchase price of and accrued and unpaid interest on all Notes to be purchased on that
purchase date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent
by the Issuer in excess of the amounts necessary to pay the purchase price of, and accrued and unpaid interest on, all Notes to be redeemed.
   (g) Other than as specifically provided in this Section 3.09 or Section 4.09 hereof, any purchase pursuant to this Section 3.09 shall be made
pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof, and references therein to “redeem,” “redemption” and similar words
shall be deemed to refer to “purchase,” “repurchase” and similar words, as applicable.
   Section 3.10 . Offers to Repurchase by Application of Excess Proceeds.
   (a) In the event that, pursuant to Section 4.09, the Issuer shall be required to commence an Asset Sale Offer, the Issuer shall follow the
procedures specified below.
   (b) The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the
extent that a longer period is required by applicable law (the “ Asset Sale Offer Period ”). No later than five Business Days after the
termination of the Offer Period (the “ Asset Sale Offer Purchase Date ”), the Issuer shall apply all Excess Proceeds (the “ Asset Sale Offer
Amount ”) to the purchase of Notes and, if required, Senior Indebtedness (on a pro rata basis, if applicable), or, if less than the Asset Sale
Offer Amount has been tendered, all Notes and Senior Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so
purchased shall be made in the same manner as interest payments are made.

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   (c) Upon the commencement of an Asset Sale Offer, the Issuer shall deliver electronically or send, by first-class mail a notice to each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and Holders of such Senior Indebtedness. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
     (i) that the Asset Sale Offer is being made pursuant to this Section 3.10 and Section 4.09 hereof and the length of time the Asset Sale
  Offer shall remain open;
      (ii) the Asset Sale Offer Amount, the purchase price and the Asset Sale Offer Purchase Date;
      (iii) that any Note not tendered or accepted for payment shall continue to accrue interest;
      (iv) that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease
  to accrue interest after the Asset Sale Offer Purchase Date;
    (v) that any Holder electing to have less than all of the aggregate principal amount of its Notes purchased pursuant to an Asset Sale Offer
  may elect to have Notes purchased in an amount not less than $2,000;
     (vi) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the
  form entitled “Option of Holder to Elect Purchase” attached to the Note completed, or transfer by book-entry transfer, to the Paying Agent at
  the address specified in the notice at least two Business Days before the Asset Sale Offer Purchase Date;
     (vii) that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the
  expiration date of the Asset Sale Offer Period, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of
  the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;
     (viii) that, if the aggregate principal amount of Notes and Senior Indebtedness surrendered by the Holders thereof exceeds the Asset Sale
  Offer Amount, the Trustee shall select the Notes and the Issuer shall select such Senior Indebtedness to be purchased on a pro rata basis
  based on the accreted value or principal amount of the Notes or such Senior Indebtedness tendered (with such adjustments as may be
  deemed

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  appropriate by the Trustee so that only Notes in an amount not less than $2,000 are purchased); and
     (ix) that Holders whose certificated Notes were purchased only in part shall be issued new Notes equal in principal amount to the
  unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same indebtedness to the extent not
  repurchased.
   (d) On or before the Asset Sale Offer Purchase Date, the Issuer shall, to the extent lawful, (1) accept for payment, on a pro rata basis as
described in clause (c)(viii) of this Section 3.10, the Asset Sale Offer Amount of Notes or portions thereof validly tendered pursuant to the
Asset Sale Offer, or if less than the Asset Sale Offer Amount has been tendered, all Notes tendered and (2) deliver or cause to be delivered to
the Trustee the Notes properly accepted, together with an Officer‟s Certificate stating the aggregate principal amount of Notes or portions
thereof so tendered.
    (e) The Paying Agent shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes properly
tendered by such Holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon receipt
of an Authentication Order, shall authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder (it
being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officer‟s Certificate is required for
the Trustee to authenticate and mail or deliver such new Note) in a principal amount equal to any unpurchased portion of the Note surrendered
representing the same indebtedness to the extent not repurchased. Any Note not so accepted shall be promptly mailed or delivered by the Issuer
to the Holder thereof. The Issuer shall publicly announce the results of the Asset Sale Offer on or as soon as practicable after the Asset Sale
Offer Purchase Date.
   (f) Prior to 11:00 a.m. (New York City time) on the Asset Sale Offer Purchase Date, the Issuer shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the purchase price of and accrued and unpaid interest on all Notes to be purchased on that purchase date.
The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in
excess of the amounts necessary to pay the purchase price of, and accrued and unpaid interest on, all Notes to be redeemed.
   (g) Other than as specifically provided in this Section 3.10 or Section 4.09 hereof, any purchase pursuant to this Section 3.10 shall be made
pursuant to the applicable provisions of Sections 3.01 through 3.06 hereof, and references therein to “redeem,” “redemption” and similar words
shall be deemed to refer to “purchase,” “repurchase” and similar words, as applicable.

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                                                                    ARTICLE 4
                                                                    COVENANTS
   Section 4.01 . Payments of Notes.
   (a) The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than one of
the Issuer or a Subsidiary, holds as of 11:00 a.m. (New York City time), on the due date, money deposited by the Issuer in immediately
available funds and designated for and sufficient to pay the principal of, premium, if any, and interest then due.
    (b) The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Code or any similar federal or
state law for the relief of debtors) on overdue principal and premium, if any, at the rate equal to the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Code or any similar federal or
state law for the relief of debtors) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the
extent lawful.
    Section 4.02 . Maintenance of Office or Agency. The Issuer shall maintain an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices
and demands to or upon the Issuer and the Guarantors in respect of the Notes and this Indenture may be served. The Issuer shall give prompt
written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee.
    The Issuer may also from time to time designate additional offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The Issuer shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other office or agency.
   The Issuer hereby designates the office of the Trustee, as one such office or agency of the Issuer in accordance with Section 2.03, with an
address (as of the date of this Indenture) as set forth in Section 13.02 herein.
   Section 4.03 . Reporting.
  (a) For so long as any Notes are outstanding, unless the Issuer is subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act and

                                                                          61
otherwise complies with such reporting requirements, the Issuer shall furnish without cost to each Holder of Notes and file with the Trustee:
      (i) within 90 days after the end of each fiscal year of the Issuer:
        (A) audited year-end consolidated financial statements of the Issuer and its Subsidiaries (including balance sheets, statements of
     operations and statements of cash flows which would be required from an SEC registrant in an Annual Report on Form 10-K, including
     pursuant to Rule 3-10 of Regulation S-X promulgated by the SEC) prepared in accordance with GAAP; provided , however , the Issuer
     shall have no obligation to provide financial statements of affiliates pursuant to Rule 3-16 of Regulation S-X promulgated by the SEC;
        (B) the information described in Item 303 of Regulation S-K under the Securities Act (“Management‟s Discussion and Analysis of
     Financial Condition and Results of Operations”) with respect to such period, to the extent such information would otherwise be required
     to be filed in an Annual Report on Form 10-K;
       (C) a presentation of Adjusted EBITDA of the Issuer and its subsidiaries consistent with the presentation thereof in the Offering
     Memorandum and derived from such financial statements referred to Section 4.03(a)(i)(A); and
         (D) all pro forma and historical information in respect of any significant transaction (as determined in accordance with Rule 3-05 of
     Regulation S-X under the Securities Act but without regard to clause (3) of the definition of “Significant Subsidiary”) consummated more
     than 75 days prior to the date such information is furnished for the time periods for which such financial information would be required
     (if the Issuer were subject to the filing requirements of the Exchange Act) in a filing on Form 8-K with the SEC at such time;
      (ii) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Issuer:
        (A) unaudited quarterly consolidated financial statements of the Issuer and its Subsidiaries (including balance sheets, statements of
     operations and statements of cash flows which would be required from a SEC registrant in a Quarterly Report on Form 10-Q, including
     pursuant to Rule 3-10 of Regulation S-X promulgated by the SEC, and a SAS 100 review by the Issuer‟s independent accountants)
     prepared in accordance

                                                                            62
  with GAAP, subject to normal year-end adjustments; provided , however , the Issuer shall have no obligation to provide financial
  statements of affiliates pursuant to Rule 3-16 of Regulation S-X promulgated by the SEC;
     (B) the information described in Item 303 of Regulation S-K under the Securities Act with respect to such period to the extent such
  information would otherwise be required to be filed in a Quarterly Report on Form 10-Q;
    (C) a presentation of Adjusted EBITDA of the Issuer and its subsidiaries consistent with the presentation thereof in the Offering
  Memorandum and derived from such financial statements referred to in Section 4.03(a)(ii)(A); and
     (D) all pro forma and historical financial information in respect of any significant transaction (as determined in accordance with
  Rule 3-05 of Regulation S-X under the Securities Act but without regard to clause (3) of the definition of “Significant Subsidiary”)
  consummated more than 75 days prior to the date such information is furnished to the extent not previously provided and for the time
  periods such financial information would be required (if the Issuer were subject to the filing requirements of the Exchange Act) in a filing
  on Form 8-K with the SEC at such time; and
    (iii) within five Business Days following the occurrence of any of the following events, a description in reasonable detail of such event:
(a) any change in the executive officers or directors of the Issuer, (b) the acceleration of any Indebtedness of the Issuer or any of its
Restricted Subsidiaries, (c) any issuance or sale by the Issuer of Equity Interests of the Issuer (excluding any issuance or sale pursuant to any
stock option or similar employee benefit plan in the ordinary course of business), (d) the entry into of any agreement by the Issuer or any of
its Subsidiaries relating to a transaction that has resulted or may result in a Change of Control, (e) any resignation or termination of the
independent accountants of the Issuer or any engagement of any new independent accountants of the Issuer, (f) any determination by the
Issuer or the receipt of advice or notice by the Issuer from its independent accountants, in either case, relating to non-reliance on previously
issued financial statements, a related audit opinion or a completed interim review and (g) the completion by the Issuer or any of its
Restricted Subsidiaries of the acquisition or disposition of a significant amount of assets, otherwise than in the ordinary course of business,
in each case to the extent a notification of such event would be required from an SEC registrant in a Form 8-K (but without regard to clause
(3) of the definition of “Significant Subsidiary” for purposes of Rule 3-05 of Regulation S-X).

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   (b) For so long as any Notes remain outstanding, the Issuer shall furnish to the Holders and to securities analysts and prospective investors
that certify that they are qualified institutional buyers, upon their request, the information described above as well as all information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
    (c) For so long as any Notes are outstanding, the Issuer shall either (i) maintain a website (which may be non-public) to which Holders,
prospective investors that certify that they are qualified institutional buyers within the meaning of Rule 144A of the Securities Act or non-U.S.
persons (as defined in Regulation S under the Securities Act), securities analysts and market making financial institutions (“ Permitted Parties
”) are given access and to which such information is posted; or (ii) file such information with the SEC.
   (d) For so long as any Notes are outstanding, the Issuer shall:
     (i) within 10 Business Days after filing with the Trustee the annual and quarterly information required pursuant to in Section 4.03(a)(i)
  and Section 4.03(a)(ii), hold a conference call for Permitted Parties to discuss such reports and the results of operations for the relevant
  reporting period; and
      (ii) employ commercially reasonably means expected to reach Permitted Parties no fewer than three Business Days prior to the date of
  the conference call required to be held in accordance with Section 4.03(d)(i), to announce the time and date of such conference call and
  either include all information necessary to access the call or direct Permitted Parties to contact the appropriate person at the Issuer to obtain
  such information.
   (e) If at any time any direct or indirect parent becomes a Guarantor (there being no obligation of any such parent to do so), such entity holds
no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer or any other direct or indirect parent of the Issuer (and
performs the related incidental activities associated with such ownership), the reports, information and other documents required to be
furnished to Holders of the Notes pursuant to this covenant may, at the option of the Issuer, be furnished by and be those of such parent entity
rather than the Issuer; provided that the same is accompanied by consolidating information that explains in reasonable detail the differences
between the information relating to such parent entity, on the one hand, and the information relating to the Issuer and its Restricted Subsidiaries
on a standalone basis, on the other hand.
   (f) Notwithstanding the foregoing provisions of this Section 4.03, any failure to furnish or file any financial statements or other information
pursuant to Section 4.03(a)(i) or Section 4.03(a)(ii) in respect of any fiscal period ending on or prior to December 31, 2011 shall not constitute
a default under this covenant

                                                                          64
until such failure has been continuing for 45 days after the date on which such financial statements or other information was required to be
furnished or filed pursuant to Section 4.03(a)(i) or Section 4.03(a)(ii).
   Section 4.04 . Compliance Certificate.
   (a) The Issuer shall deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate from the chief executive officer,
chief operating officer or chief financial officer stating that a review of the activities of the Issuer and its Restricted Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Issuer and each
Guarantor have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to such Officer signing
such certificate, that to the best of his or her knowledge, the Issuer and each Guarantor have kept, observed, performed and fulfilled each and
every condition and covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions,
covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such Defaults of which he or she may have
knowledge and what action the Issuer and the Guarantor are taking or propose to take with respect thereto).
   (b) The Issuer shall promptly (which shall be no more than 30 days following the date on which the Issuer becomes aware of any event
which would constitute a Default) send to the Trustee an Officer‟s Certificate specifying such event, its status and what action the Issuer is
taking or proposes to take with respect thereto.
   Section 4.05 . Stay, Extension and Usury Laws. The Issuer and each Guarantor covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer and
each Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee or the Notes Agent, but
shall suffer and permit the execution of every such power as though no such law has been enacted.
   Section 4.06 . Limitation on Restricted Payments.
   (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries, directly or indirectly, to:
      (i) declare or pay any dividend or make any distribution (whether made in cash, securities or other property) on or in respect of its or any
  of its Restricted Subsidiaries‟ Capital Stock (including any payment

                                                                           65
  in connection with any merger or consolidation involving the Issuer or any of its Restricted Subsidiaries) other than:
        (A) dividends or distributions payable solely in Capital Stock of the Issuer (other than Disqualified Stock); and
       (B) dividends or distributions by a Restricted Subsidiary payable to the Issuer or another Restricted Subsidiary (and if such Restricted
     Subsidiary is not a Wholly Owned Subsidiary, to its other holders of common Capital Stock on a pro rata basis);
      (ii) purchase, redeem, retire or otherwise acquire for value, including in connection with any merger or consolidation, any Capital Stock
  of the Issuer or any direct or indirect parent entity of the Issuer held by Persons other than the Issuer or a Restricted Subsidiary (other than in
  exchange for Capital Stock of the Issuer (other than Disqualified Stock));
     (iii) make any principal payment on, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to any
  scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations or Guarantor Subordinated
  Obligations, other than:
        (A) Indebtedness of the Issuer owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and
     held by the Issuer or any other Restricted Subsidiary permitted under Section 4.08; or
        (B) the purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations or Guarantor
     Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each
     case due within one year of the date of purchase, repurchase, redemption, defeasance or other acquisition or retirement); or
      (iv) make any Restricted Investment;
(all such payments and other actions referred to in clauses (i) through (iv) (other than any exception thereto) shall be referred to as a “
Restricted Payment ”); provided , that cancellation of Indebtedness owing to the Issuer or any Restricted Subsidiary from then current or
former employees, members of management or consultants of the Issuer, any Restricted Subsidiary or any direct or indirect parent entity in
connection with a repurchase of Capital Stock of the Issuer or any such direct or indirect parent entity shall not be deemed to constitute a
Restricted Payment for purposes of this Section 4.06 or any other provision of this Indenture;

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unless, at the time of and after giving effect to such Restricted Payment:
         (A) no Default shall have occurred and be continuing (or would result therefrom);
        (B) immediately after giving effect to such transaction on a pro forma basis, the Issuer is able to Incur $1.00 of additional Indebtedness
     under Section 4.08(a);
        (C) the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made subsequent to the Issue Date
     (excluding Restricted Payments made pursuant to Sections 4.06(b)(i), 4.06(b)(ii), 4.06(b)(iii), 4.06(b)(iv), 4.06(b)(v), 4.06(b)(vii),
     4.06(b)(viii), 4.06(b)(ix), 4.06(b)(x), 4.06(b)(xi), 4.06(b)(xiii), 4.06(b)(xiv), 4.06(b)(xv) and 4.06(b)(xvi)) would not exc eed the sum of
     (without duplication):
           (1) 50% of Consolidated Net Income for the period (treated as one accounting period) from January 1, 2011 to the end of the most
        recent fiscal quarter ending prior to the date of such Restricted Payment for which internal financial statements are available at the
        time of such Restricted Payment (or, in case such Consolidated Net Income is a deficit, minus 100% of such deficit);
           (2) 100% of the aggregate net cash proceeds and the fair market value, as determined in good faith by an Officer of the Issuer, of
        property or assets other than cash (including any Permitted Business or the Capital Stock thereof) acquired or received by the Issuer
        from the issue or sale of its Capital Stock (other than Disqualified Stock) or other capital contributions subsequent to the Issue Date,
        other than:
           (x) net cash proceeds received from an issuance or sale of such Capital Stock to a Subsidiary of the Issuer or to an employee stock
           ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed
           by loans from or Guaranteed by the Issuer or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to
           the date of determination;

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  (y) net cash proceeds to the extent such net cash proceeds have been used to Incur Contribution Indebtedness; and
  (z) Excluded Contributions;
    (3) the amount by which Indebtedness of the Issuer or its Restricted Subsidiaries is reduced on the Issuer‟s consolidated balance
sheet upon the conversion or exchange (other than debt held by a Subsidiary of the Issuer) subsequent to the Issue Date of any
Indebtedness of the Issuer or its Restricted Subsidiaries convertible or exchangeable for Capital Stock (other than Disqualified Stock)
of the Issuer (less the amount of any cash, or the fair market value of any other property, distributed by the Issuer upon such
conversion or exchange);
   (4) 100.0% of the aggregate amount received in cash and the fair market value of marketable securities received by means of:
  (x) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer or
  its Restricted Subsidiaries and repurchases and redemptions of such Restricted Investments held by the Issuer or its Restricted
  Subsidiaries (other than to the Issuer or a Restricted Subsidiary) and repayments of loans or advances, and releases of guarantees
  and cash returns on other Restricted Investments made by the Issuer or its Restricted Subsidiaries in each case after the Issue Date,
  to the extent such returns are not included in Consolidated Net Income; or
  (y) the sale (other than to the Issuer or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary or a distribution from an
  Unrestricted Subsidiary (other than in each case to the extent such Investment constituted a Permitted Investment) or a dividend
  from an Unrestricted Subsidiary after the Issue Date;

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        (5) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary after the Issue Date, the fair market
     value of the aggregate Investments by the Issuer and its Restricted Subsidiaries in such Unrestricted Subsidiary at the time of the
     redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary (as determined in good faith by an Authorized Officer of the
     Issuer), but only to the extent that the Investment in such Unrestricted Subsidiary was made by the Issuer or a Restricted Subsidiary
     after the Issue Date; and
     (D) immediately after giving effect to such transaction on a pro forma basis, the Secured Leverage Ratio would be less than 2.50 to
  1.0.
(b) Section 4.06(a) shall not prohibit:
   (i) the making of any Restricted Payment in exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of
the Issuer or any direct or indirect parent entity or contributions to equity capital of the Issuer (other than Disqualified Stock and other than
Capital Stock issued or sold to a Subsidiary or an employee stock ownership plan or similar trust to the extent such sale to an employee
stock ownership plan or similar trust is financed by loans from or Guaranteed by the Issuer or any Restricted Subsidiary, unless such loans
have been repaid with cash on or prior to the date of determination); provided , however , that the net cash proceeds from such sale of
Capital Stock shall be excluded from clause (C)(2) of Section 4.06(a);
   (ii) any purchase, repurchase, redemption, defeasance or other acquisition or retirement (A) of Subordinated Obligations of the Issuer or
Guarantor Subordinated Obligations of any Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of,
Subordinated Obligations of the Issuer or (B) of Guarantor Subordinated Obligations made by exchange for or out of the proceeds of the
substantially concurrent sale of Guarantor Subordinated Obligations, in each case, in exchange for or out of the proceeds of Refinancing
Indebtedness with respect thereto;
   (iii) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Disqualified Stock of the Issuer or a
Restricted Subsidiary made by exchange for or out of the proceeds of the substantially concurrent sale of Disqualified Stock of the Issuer or
such Restricted Subsidiary, as the case may be, so long as such refinancing Disqualified Stock is permitted to be Incurred pursuant to
Section 4.08 and constitutes Refinancing Indebtedness;

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   (iv) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Obligation of the
Issuer (a) at a purchase price not greater than 101% of the principal amount thereof in the event of a Change of Control in accordance with
provisions similar to Section 4.12 or (b) at a purchase price not greater than 100% of the principal amount thereof in accordance with
provisions similar to Section 4.09; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other
acquisition or retirement, the Issuer has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in Section 4.12 or
Section 4.09, respectively, with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for
payment in connection with such Change of Control Offer or Asset Sale Offer;
   (v) any purchase or redemption of Subordinated Obligations of the Issuer or Guarantor Subordinated Obligations of a Guarantor from Net
Proceeds to the extent permitted under Section 4.09;
   (vi) dividends or redemptions paid or made within 60 days after the date of declaration or notice of redemption if at such date of
declaration or notice of redemption such dividend or redemption would have complied with this provision;
    (vii) the purchase, redemption or other acquisition, cancellation or retirement for value (or dividends or distributions in connection
therewith) of Capital Stock or equity appreciation rights of the Issuer or any direct or indirect parent entity held by any existing or former
employees, members of management or consultants of the Issuer or any Subsidiary of the Issuer or their assigns, estates or heirs, in each
case pursuant to any management equity plan or stock option plan or any other management or employee compensation or benefit plan or
other agreement or arrangement approved by the Board of Directors; and provided further that such redemptions or repurchases pursuant to
this clause (vii) does not exceed $3.0 million in the aggregate during any fiscal year (with unused amounts in any fiscal year being carried
over to succeeding fiscal years subject to a maximum (without giving effect to the following proviso) of $6.0 million in any fiscal year);
provided further that each of the amounts in any fiscal year under this clause (vii) may be increased by an amount not to exceed:
     (A) the net cash proceeds from the sale of Capital Stock (other than Disqualified Stock) of the Issuer to existing or former employees,
  members of management or consultants of the Issuer, any of its Subsidiaries or any direct or indirect parent entity that occurs after the
  Issue Date, to the extent the cash proceeds from the sale of such Capital Stock have not otherwise been applied to the payment of
  Restricted Payments; provided that

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  the net cash proceeds from such sales or contributions that are used to make a Restricted Payment pursuant to this clause (vii) shall be
  excluded from clause (C)(2) of Section 4.06(a) and may not be used as the basis for the Incurrence of Contribution Indebtedness; plus
      (B) the cash proceeds of key man life insurance policies received by the Issuer or its Restricted Subsidiaries after the Issue Date; less
     (C) the amount of any Restricted Payments previously made with the net cash proceeds described in the clauses (A) and (B) of this
  clause (vii);
    (viii) the declaration and payment of dividends and distributions to holders of any class or series of Disqualified Stock of the Issuer or
any of its Restricted Subsidiaries or any class or series of Preferred Stock of any Restricted Subsidiary issued in accordance with the terms
of this Indenture to the extent such dividends are included in the definition of “Consolidated Interest Expense;”
   (ix) repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants, other rights to purchase Capital Stock or
other convertible or equity-linked securities or rights if such Capital Stock represents a portion of the exercise price thereof;
   (x) the making of Permitted Tax Distributions;
  (xi) the distribution, by dividend or otherwise, of shares of Capital Stock of Unrestricted Subsidiaries (other than Unrestricted
Subsidiaries the primary assets of which are cash and/or Cash Equivalents);
    (xii) the declaration and payment of dividends on the Issuer‟s Common Stock (or dividends, distributions or advances to any direct or
indirect parent entity to allow such direct or indirect parent entity to pay dividends on its Common Stock) following the first Equity Offering
of the Issuer‟s Common Stock in a registered public offering (or of such direct or indirect parent entity‟s Common Stock in a registered
public offering, as the case may be) after the Issue Date, of in the case of the first Equity Offering of the Issuer‟s Common Stock to the
public, up to 6% per annum of the net cash proceeds received by the Issuer in such Equity Offering or in the case of the first Equity Offering
of such direct or indirect parent entity‟s Common Stock to the public, up to 6% per annum of the amount contributed by such direct or
indirect parent entity to the Issuer from the net cash proceeds received by such direct or indirect parent entity in such public offering, in each
case, other than public offerings of the Issuer‟s or

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  such direct or indirect parent entity‟s Common Stock registered on Form S-4 or S-8;
      (xiii) Restricted Payments that are made with Excluded Contributions;
     (xiv) Restricted Payments by the Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional
  shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;
     (xv) the Issuer from distributing the shares and/or assets of Mar-Vel and/or the Law Enforcement Business respectively; provided that the
  Consolidated Coverage Ratio for the Issuer, determined on a pro forma basis as if such distribution had occurred at the beginning of the
  applicable four-quarter period, would have been either (x) at least 2.00 to 1.00 or (y) at least as great as the Issuer‟s actual Consolidated
  Coverage Ratio determined without giving pro forma effect to such distribution; and
     (xvi) any Restricted Payment made in connection with the Transactions and the fees and expenses related thereto, including any
  payments to holders of Equity Interests of the Issuer;
provided , however , that at the time of and after giving effect to, any Restricted Payment permitted under Sections 4.06(b)(v), 4.06(b)(xi) and
4.06(b)(xii) no Default shall have occurred and be continuing or would occur as a consequence thereof.
   (c) The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of such Restricted Payment of the
asset(s) or securities proposed to be paid, transferred or issued by the Issuer or such Restricted Subsidiary, as the case may be, pursuant to such
Restricted Payment. The fair market value of any cash Restricted Payment shall be its face amount and any non-cash Restricted Payment shall
be determined in good faith by an Officer of the Issuer.
   (d) As of the Issue Date, all of the Issuer‟s Subsidiaries shall be Restricted Subsidiaries. The Issuer shall not permit any Unrestricted
Subsidiary to become a Restricted Subsidiary except pursuant to the last sentence of the definition of “Unrestricted Subsidiary.” For purposes
of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries
(except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in
the definition of “Investment.” Such designation shall be permitted only if a Restricted Payment in such amount would be permitted at such
time and if such Subsidiary otherwise meets the definition of an Unrestricted

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Subsidiary. Unrestricted Subsidiaries shall not be subject to any of the restrictive covenants set forth in this Indenture.
   Section 4.07. Limitation on Restrictions on Distribution From Restricted Subsidiaries.
   (a) The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or permit to exist
or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
      (i) pay dividends or make any other distributions on its Capital Stock to the Issuer or any of its Restricted Subsidiaries, or with respect to
   any other interest or participation in, or measured by, its profits, or pay any Indebtedness or other obligations owed to the Issuer or any
   Restricted Subsidiary (it being understood that the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to
   dividends or liquidating distributions being paid on Common Stock shall not be deemed a restriction on the ability to make distributions on
   Capital Stock);
      (ii) make any loans or advances to the Issuer or any Restricted Subsidiary (it being understood that the subordination of loans or advances
   made to the Issuer or any Restricted Subsidiary to other Indebtedness Incurred by the Issuer or any Restricted Subsidiary shall not be
   deemed a restriction on the ability to make loans or advances); or
      (iii) sell, lease or transfer any of its property or assets to the Issuer or any Restricted Subsidiary (it being understood that such transfers
   shall not include any type of transfer described in clause (i) or (ii) above).
   (b) Section 4.07(a) shall not prohibit encumbrances or restrictions existing under or by reason of:
      (i) contractual encumbrances or restrictions pursuant to the ABL Facility, the Security Documents, the Intercreditor Agreement and
   related documentation and other agreements in effect at or entered into on the Issue Date;
      (ii) this Indenture, the Notes and the Note Guarantees and any related documentation in effect or entered into in connection therewith;
      (iii) any agreement or other instrument of a Person acquired by or merged or consolidated with or into the Issuer or any of its Restricted
   Subsidiaries in existence at the time of such acquisition or at the time it merges with or into the Issuer or any of its Restricted Subsidiaries or
   assumed in connection with the acquisition of assets from such Person (but, in any such case, not created in contemplation thereof), which

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encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person so acquired and its
Subsidiaries, or the property or assets of the Person so acquired and its Subsidiaries or the property or assets so acquired;
    (iv) any amendment, restatement, modification, renewal, supplement, refunding, replacement or refinancing of an agreement referred to
in Sections 4.07(b)(i), 4.07(b)(ii), 4.07(b)(iii), 4.07(b)(vi) or 4.07(b)(iv); provided , however , that such amendments, restatements,
modifications, renewals, supplements, refundings, replacements or refinancings are, as determined in the good faith judgment of an Officer
of the Issuer, taken as a whole, not materially more restrictive than the encumbrances and restrictions contained in the agreements referred to
in Sections 4.07(b)(i), 4.07(b)(ii), 4.07(b)(iii) or 4.07(b)(vi) on the Issue Date or the date such Restricted Subsidiary became a Restricted
Subsidiary or was merged into a Restricted Subsidiary, whichever is applicable;
   (v) in the case of Section 4.07(a)(iii), Liens permitted to be Incurred under the provisions of Section 4.11 that limit the right of the debtor
to dispose of the assets securing such Indebtedness and customary restrictions and conditions contained in the documents relating to any
such Lien;
   (vi) purchase money obligations and Capitalized Lease Obligations permitted under this Indenture, in each case, that impose
encumbrances or restrictions of the nature described in Section 4.07(a)(iii) on the property so acquired;
   (vii) contracts for the sale of assets, including any restrictions with respect to a Subsidiary of the Issuer pursuant to an agreement that has
been entered into for the sale of all or a portion of the Capital Stock or assets of such Subsidiary;
   (viii) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of
business;
   (ix) any customary provisions in joint venture agreements relating to joint ventures that are not Restricted Subsidiaries and other similar
agreements;
    (x) any customary provisions in leases, subleases or licenses and other agreements entered into by the Issuer or any Restricted Subsidiary
in the ordinary course of business;
   (xi) applicable law or any applicable rule, regulation or order;

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      (xii) restrictions applicable only to Foreign Subsidiaries contained in Indebtedness of Foreign Subsidiaries permitted to be Incurred under
  this Indenture; and
     (xiii) restrictions contained in the documentation governing (x) other Indebtedness Incurred or Preferred Stock issued by the Issuer or a
  Guarantor in accordance with Section 4.08 that are, as determined in the good faith judgment of an Officer of the Issuer, not materially more
  restrictive, taken as a whole, than those applicable to the Issuer in this Indenture or the ABL Facility on the Issue Date (which results in
  encumbrances or restrictions comparable to those applicable to the Issuer at a Restricted Subsidiary level), or (y) other Indebtedness
  Incurred or Preferred Stock issued by a Non-Guarantor Subsidiary, in each case permitted to be Incurred subsequent to the Issue Date
  pursuant to the provisions of Section 4.08.
   Section 4.08 . Limitation on Indebtedness.
   (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness); provided , however , that the Issuer and the Guarantors may Incur Indebtedness if on the date thereof and after giving
effect thereto on a pro forma basis, the Consolidated Coverage Ratio for the Issuer and its Restricted Subsidiaries is at least 2.00 to 1.00.
   (b) Section 4.08(a) shall not prohibit the Incurrence of the following Indebtedness:
     (i) Indebtedness of the Issuer or any Guarantor Incurred under the ABL Facility and the issuance and creation of letters of credit and
  bankers‟ acceptances thereunder (with letters of credit and bankers‟ acceptances being deemed to have a principal amount equal to the face
  amount thereof) in an aggregate amount not to exceed the greater of (A) $250.0 million or (B) the Borrowing Base as of any date of
  Incurrence;
      (ii) Indebtedness represented by the Notes (including any Note Guarantee) (other than any Additional Notes);
     (iii) Indebtedness of the Issuer and its Restricted Subsidiaries in existence on the Issue Date (other than Indebtedness described in
  Sections 4.08(b)(i) and 4.08(b)(ii));
     (iv) Guarantees by the Issuer or a Guarantor of Indebtedness permitted to be Incurred by the Issuer or a Restricted Subsidiary in
  accordance with the provisions of this Indenture;

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   (v) Indebtedness of the Issuer owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and
held by the Issuer or any other Restricted Subsidiary; provided , however , any subsequent issuance or transfer of Capital Stock or any other
event which results in any such Indebtedness being beneficially held by a Person other than the Issuer or a Restricted Subsidiary or any sale
or other transfer of any such Indebtedness to a Person other than the Issuer or a Restricted Subsidiary shall be deemed, in each case, to
constitute an Incurrence of such Indebtedness by the Issuer or such Subsidiary not permitted by this clause (v);
    (vi) (A) Indebtedness of the Issuer or a Restricted Subsidiary Incurred or assumed in connection with an acquisition of a Similar Business
or properties or assets that are used or useful in a Similar Business or (B) Indebtedness of Persons that are acquired by the Issuer or any
Restricted Subsidiary or merged into or amalgamated or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms
of this Indenture; provided , however , that in the case of clauses (A) and (B), after giving effect to such acquisition, merger, amalgamation
or consolidation and the related Incurrence of Indebtedness, either
     (x) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant Section 4.08(a); or
     (y) the pro forma Consolidated Coverage Ratio of the Issuer would be equal to or higher than the actual Consolidated Coverage Ratio
     of the Issuer for the applicable four-quarter period;
   (vii) Indebtedness under Hedging Obligations and Bank Product Obligations not Incurred for speculative purposes;
   (viii) Indebtedness (including Capitalized Lease Obligations) of the Issuer or a Restricted Subsidiary Incurred to finance the purchase,
lease, construction, design, installation, remodeling or improvement of any property, plant or equipment used or to be used in the business of
the Issuer or such Restricted Subsidiary, whether through the direct purchase of such property, plant or equipment or the purchase of Capital
Stock of any Person owning such property, plant or equipment, in an aggregate outstanding principal amount which, when taken together
with the then-outstanding principal amount of all (x) other Indebtedness Incurred pursuant to this clause (viii) and (y) Refinancing
Indebtedness in respect of Indebtedness initially Incurred pursuant to this clause (viii), shall not exceed the greater of (a) $10.0 million or
(b) 4.0% of Total Assets as of any date of Incurrence;

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   (ix) Indebtedness Incurred by the Issuer or its Restricted Subsidiaries in respect of workers‟ compensation claims, health, disability or
other employee benefits or property, casualty or liability insurance, self-insurance obligations, performance, bid surety and similar bonds
and completion Guarantees (not for borrowed money) provided in the ordinary course of business;
   (x) Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, Incurred or assumed in connection with the disposition of any business or assets of the Issuer or
any business, assets or Capital Stock of a Restricted Subsidiary, other than Guarantees of Indebtedness Incurred by any Person acquiring all
or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition, provided that
      (A) the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash
   proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to subsequent
   changes in value) actually received by the Issuer and its Restricted Subsidiaries in connection with such disposition; and
      (B) such Indebtedness is not reflected on the balance sheet of the Issuer or any of its Restricted Subsidiaries (contingent obligations
   referred to in a footnote to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on
   such balance sheet for purposes of this clause (x));
    (xi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided , however , that such Indebtedness
is extinguished within five Business Days of Incurrence;
   (xii) the Incurrence or issuance by the Issuer or any Restricted Subsidiary of Refinancing Indebtedness that serves to refund, replace,
redeem, extend, amend, modify or refinance (including by way of exchange) any Indebtedness Incurred as permitted under Section 4.08(a)
or Sections 4.08(b)(ii), 4.08(b)(iii), 4.08(b)(vi), 4.08(b)(viii), 4.08(b)(xii) or 4.08(b)(xvi) or any Indebtedness issued to so refund, replace,
redeem, extend, amend, modify or refinance such Indebtedness, including additional Indebtedness Incurred to pay premiums (including
reasonable, as determined in good faith by an Officer of the Issuer, tender premiums), defeasance costs, accrued interest and fees and
expenses in connection therewith prior to its respective maturity;

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     (xiii) Indebtedness of the Issuer or any Restricted Subsidiary consisting of (a) the financing of insurance premiums or (b) take-or-pay
  obligations contained in supply arrangements, in each case, in the ordinary course of business;
     (xiv) Indebtedness consisting of Indebtedness issued by the Issuer or a Restricted Subsidiary to current or former officers, directors and
  employees thereof or any direct or indirect parent entity, their respective estates, spouses or former spouses, in each case to finance the
  purchase or redemption of Capital Stock of the Issuer or its direct or indirect parent to the extent described in Section 4.06(b)(vii);
     (xv) Indebtedness representing (i) deferred compensation to employees of the Issuer or any Restricted Subsidiary Incurred in the ordinary
  course of business or (ii) obligations of the Issuer or any Restricted Subsidiary under deferred compensation or other similar arrangements
  Incurred by such Person in connection with any acquisition or disposition of any business, assets or a Subsidiary in accordance with the
  terms of this Indenture; and
     (xvi) Contribution Indebtedness.
   (c) For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to
and in compliance with, this Section 4.08:
     (i) in the event that an item of Indebtedness (or any portion thereof) meets the criteria of more than one of the categories of Indebtedness
  described in Sections 4.08(b)(i) through 4.08(b)(xvi) or is entitled to be Incurred pursuant to Section 4.08(a), the Issuer, in its sole discretion,
  may classify or later reclassify such item of Indebtedness (or any portion thereof) in any manner that complies with Section 4.08 and shall
  only be required to include the amount and type of such Indebtedness in Section 4.08(a) or 4.08(b). Additionally, all or any portion of any
  item of Indebtedness may later be classified as having been Incurred pursuant to one or more of such categories at the time of
  reclassification, and the Issuer shall be entitled to divide and classify (or later reclassify) an item of Indebtedness in more than one of the
  categories described in Section 4.08(a) or 4.08(b). Notwithstanding the foregoing, all Indebtedness under the ABL Facility shall be deemed
  to have been Incurred under Section 4.08(b)(i);
     (ii) Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that is otherwise included in the determination of
  a particular amount of Indebtedness shall not be included;

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     (iii) if obligations in respect of letters of credit are Incurred pursuant to the ABL Facility and are being treated as Incurred pursuant to
  Section 4.08(b)(i) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
     (iv) the principal amount of any Disqualified Stock of the Issuer or a Restricted Subsidiary, or Preferred Stock of a Non-Guarantor
  Subsidiary, shall be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any
  redemption or repurchase premium) or the liquidation preference thereof;
     (v) Indebtedness permitted by this Section 4.08 need not be permitted solely by reference to one provision permitting such Indebtedness
  but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.08 permitting such
  Indebtedness;
     (vi) the principal amount of any Indebtedness outstanding in connection with a securitization transaction or series of securitization
  transactions is the amount of obligations outstanding under the legal documents entered into as part of such transaction that would be
  characterized as principal if such transaction were structured as a secured lending transaction rather than as a purchase relating to such
  transaction; and
      (vii) the amount of Indebtedness issued at a price that is less than the principal amount thereof shall be equal to the amount of the liability
  in respect thereof determined in accordance with GAAP.
   (d) Accrual of interest, accrual of dividends, the accretion of accreted value or the amortization of debt discount, the payment of interest in
the form of additional Indebtedness and the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock shall
not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.08. The amount of any Indebtedness outstanding as of any
date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount or the aggregate principal amount
outstanding in the case of Indebtedness issued with interest payable in kind and (ii) the principal amount or liquidation preference thereof,
together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
   (e) The Issuer shall not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness or issue any shares of Disqualified Stock, other
than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall
be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness is not

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permitted to be Incurred as of such date under this Section 4.08, the Issuer shall be in Default of this Section 4.08).
   Section 4.09. Limitation on Sales of Assets and Subsidiary Stock.
   (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to consummate an Asset Sale, unless:
      (i) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the
  fair market value (as determined good faith by an Officer of the Issuer) of the assets sold or otherwise disposed of; and
    (ii) except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Issuer or such Restricted
  Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that the amount of:
         (A) any liabilities (as shown on the Issuer‟s or such Restricted Subsidiary‟s most recent balance sheet or in the footnotes thereto, or if
     Incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been shown on the Issuer‟s or such
     Restricted Subsidiary‟s balance sheet or in the footnotes thereto if such Incurrence or accrual had taken place on or prior to the date of
     such balance sheet, as determined in good faith by an Officer of the Issuer) of the Issuer or such Restricted Subsidiary, other than
     liabilities that are by their terms subordinated to the Notes or the Guarantees, that are assumed by the transferee of any such assets and for
     which the Issuer and all of its Restricted Subsidiaries have been validly released in writing;
        (B) any securities or other obligations received by the Issuer or such Restricted Subsidiary from such transferee that are converted by
     the Issuer or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) within
     180 days following the closing of such Asset Sale;
         (C) any Designated Non-cash Consideration received by the Issuer or such Restricted Subsidiary in such Asset Sale having an
     aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (C) that is
     at that time outstanding, not to exceed the greater of (x) $5.0 million or (y) 2.5% of Total Assets at the time of the receipt of such
     Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash

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     Consideration being measured at the time received and without giving effect to subsequent changes in value; and
         (D) any Capital Stock, properties or assets of the kind referred to in clause (2) of the following paragraph,
   shall be deemed to be Cash Equivalents for purposes of this provision and for no other purpose.
  (b) Within 365 days after the receipt of any Net Proceeds of any Asset Sale (the “ Application Period ”), the Issuer or such Restricted
Subsidiary, at its option, may apply the Net Proceeds from such Asset Sale,
      (i) to reduce or repay:
         (A) Obligations under the ABL Facility;
        (B) Obligations under Indebtedness (other than Subordinated Obligations) that is secured by a Lien, which Lien is permitted by this
     Indenture;
        (C) Obligations under other Indebtedness (other than Subordinated Obligations); provided that, to the extent the Issuer reduces
     Obligations under such Indebtedness, the Issuer shall equally and ratably reduce Obligations under the Notes as provided under
     Section 3.07 through open-market purchases (to the extent such purchases are at or above 100% of the principal amount thereof) or by
     making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at
     100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would
     otherwise be prepaid; or
         (D) Indebtedness of a Non-Guarantor Subsidiary, other than Indebtedness owed to the Issuer or another Restricted Subsidiary; or
     (ii) to make (A) an Investment in any one or more businesses; provided that such Investment in any business is in the form of the
  acquisition of Capital Stock of a Restricted Subsidiary from a Person other than the Issuer or one of its Subsidiaries or results in the Issuer or
  another of its Restricted Subsidiaries, owning an amount of the Capital Stock of such business such that it constitutes a Restricted
  Subsidiary, (B) capital expenditures or (C) acquisitions of other properties or assets, in the case of each of clause (A), (B) and (C), used or
  useful in a Similar Business;

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provided that, in the case of clause (ii) above, a binding commitment shall be treated as a permitted application of the Net Proceeds from the
date of such commitment so long as the Issuer or such other Restricted Subsidiary enters into such commitment with the good faith expectation
that such Net Proceeds shall be applied to satisfy such commitment within 180 days of such commitment (an “ Acceptable Commitment ”)
and, in the event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection
therewith, the Issuer or such Restricted Subsidiary enters into another Acceptable Commitment (a “ Second Commitment ”) within 180 days
of such cancellation or termination; provided further that if any Second Commitment is later cancelled or terminated for any reason before such
Net Proceeds are applied, then such Net Proceeds shall constitute Excess Proceeds.
   (c) (i) Any Net Proceeds from an Asset Sale of Collateral that are not invested or applied as provided and within the time period set forth in
Section 4.09(b) shall be deemed to constitute “ Collateral Excess Proceeds .” The Issuer shall make an offer to all Holders of the Notes and if
required by the terms of any Pari Passu Indebtedness, to the Holders of such other Pari Passu Indebtedness (a “ Collateral Proceeds Offer ”),
to purchase the maximum aggregate principal amount of the Notes that is in an amount equal to at least $2,000, that may be purchased out of
the Collateral Excess Proceeds at an offer price in cash in an amount equal to 100.0% of the principal amount thereof (or accreted value
thereof, if less), plus accrued and unpaid interest, if any, or, in respect of such other Pari Passu Indebtedness, such lesser price, if any, as may
be provided for by the terms of such other Pari Passu Indebtedness, to the date fixed for the closing of such offer, in accordance with the
procedures set forth in this Indenture; provided that the proportion of such Collateral Proceeds Offer allocated to the Notes is at least as great as
the proportion of the principal amount of all relevant Pari Passu Indebtedness represented by the Notes. The Issuer shall commence a Collateral
Proceeds Offer with respect to Collateral Excess Proceeds within ten Business Days after the date that Collateral Excess Proceeds exceed
$15.0 million by delivering the notice required pursuant to this Indenture, with a copy to the Trustee. The Issuer may, at its election, satisfy the
foregoing obligations with respect to any Net Proceeds from an Asset Sale by making a Collateral Sale Offer with respect to such Net Proceeds
prior to the expiration of the relevant 365-day period (or such longer period provided in Section 4.09(b)).
      (ii) To the extent that the aggregate amount of Notes and such other Pari Passu Indebtedness tendered pursuant to a Collateral Sale Offer
  is less than the Collateral Excess Proceeds, the Issuer may use any remaining Collateral Excess Proceeds for any purpose not prohibited by
  the Indenture. If the aggregate principal amount of Notes or such other Pari Passu Indebtedness surrendered by such holders thereof exceeds
  the amount of Collateral Excess Proceeds, the Trustee shall select the Notes and the Issuer shall select such other Pari Passu Indebtedness to
  be purchased on a pro rata basis based on the accreted value or principal

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  amount of the Notes or such other Pari Passu Indebtedness tendered with adjustments as necessary so that no Notes or other Pari Passu
  Indebtedness shall be repurchased in part in an unauthorized denomination. Upon completion of any such Collateral Sale Offer, the amount
  of Collateral Excess Proceeds that resulted in the Collateral Sale Offer shall be reset to zero.
   (d) (i) Any Net Proceeds from an Asset Sale of non-Collateral that are not invested or applied as provided and within the time period set
forth in Section 4.09(b) shall be deemed to constitute “ Excess Proceeds .” When the aggregate amount of Excess Proceeds exceeds
$15.0 million, the Issuer shall make an offer to all Holders of the Notes and, if required by the terms of any Senior Indebtedness, to the holders
of such Senior Indebtedness (an “ Asset Sale Offer ”), to purchase the maximum aggregate principal amount of the Notes and such Senior
Indebtedness that is in an amount equal to at least $2,000, that may be purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100.0% of the principal amount thereof (or accreted value thereof, if less), plus accrued and unpaid interest, if any, to the date
fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture; provided that the proportion of such Asset Sale
Offer allocated to the Notes is at least as great as the proportion of the principal amount of all relevant Senior Indebtedness represented by the
Notes. The Issuer shall commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess
Proceeds exceed $15.0 million by delivering the notice required pursuant to the terms of this Indenture, with a copy to the Trustee. The Issuer
may satisfy the foregoing obligations with respect to any Net Proceeds from an Asset Sale of non-Collateral by making an Asset Sale Offer
with respect to such Net Proceeds prior to the expiration of the relevant 365-day period (or such longer period provided in Section 4.09(b)) or
with respect to Excess Proceeds of $15.0 million or less.
     (ii) To the extent that the aggregate amount of Notes and such Senior Indebtedness tendered pursuant to an Asset Sale Offer is less than
  the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate
  principal amount of Notes or the Senior Indebtedness surrendered by such Holders thereof exceeds the amount of Excess Proceeds, the
  Trustee shall select the Notes and the Issuer shall select the Senior Indebtedness to be purchased on a pro rata basis based on the accreted
  value or principal amount of the Notes or the Senior Indebtedness tendered with adjustments as necessary so that no Notes or Senior
  Indebtedness shall be repurchased in part in an unauthorized denomination. Upon completion of any such Asset Sale Offer, the amount of
  Excess Proceeds that resulted in the Asset Sale Offer shall be reset to zero.
   (e) Pending the final application of any Collateral Excess Proceeds (except, in the case of Collateral Excess Proceeds attributable a
disposition of Notes Priority Collateral, when a Default or Event of Default is continuing) or

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Excess Proceeds, the Issuer (or the applicable Restricted Subsidiary) may temporarily reduce revolving credit borrowings or otherwise invest
such Collateral Excess Proceeds or Excess Proceeds in any manner that is not prohibited by this Indenture.
    (f) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer
or Collateral Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the
Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in
this Indenture by virtue thereof.
   Section 4.10 . Transactions with Affiliates.
   (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or conduct any transaction
(including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Issuer (an “ Affiliate
Transaction ”) involving aggregate consideration in excess of $2.0 million unless:
      (i) the terms of such Affiliate Transaction are no less favorable to the Issuer or such Restricted Subsidiary, as the case may be, than those
   that could have been obtained by the Issuer or such Restricted Subsidiary in a comparable transaction at the time of such transaction in
   arm‟s-length dealings with a Person who is not such an Affiliate; and
      (ii) in the event such Affiliate Transaction involves an aggregate consideration in excess of $10.0 million, either, in the Issuer‟s sole
   discretion, the Issuer has received a written opinion from an Independent Financial Advisor that such Affiliate Transaction is not materially
   less favorable than those that might reasonably have been obtained in a comparable transaction at such time on an arm‟s-length basis from a
   Person that is not an Affiliate or such transaction has been approved by a majority of members of such Board of Directors having no
   personal stake in such transaction.
   (b) Section 4.10(a) shall not apply to:
      (i) any transaction between the Issuer and one or more Restricted Subsidiaries or between or among Restricted Subsidiaries and any
   Guarantees issued by the Issuer or a Restricted Subsidiary for the benefit of the Issuer or a Restricted Subsidiary, as the case may be, in
   accordance with Section 4.08;

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   (ii) any Restricted Payment permitted to be made pursuant Section 4.06 and the definition of “Permitted Investments” (other than
pursuant to clauses (4), (10), (13) and (14) thereof);
   (iii) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of,
employment agreements and other compensation arrangements, stock options, restricted stock plans, long-term incentive plans, stock
appreciation rights plans, participation plans or similar employee benefits plans and/or indemnity provided on behalf of officers, directors
and employees approved by the Board of Directors of the Issuer or any direct or indirect parent entity or of any Restricted Subsidiary, as
applicable;
   (iv) the payment or reimbursement of reasonable and customary fees and expenses paid to and indemnity provided on behalf of, officers,
directors or employees of the Issuer or any Restricted Subsidiary or any direct or indirect parent entity;
   (v) any agreement as in effect as of the Issue Date, as such agreement may be amended, modified, supplemented, extended or renewed
from time to time, so long as any such amendment, modification, supplement, extension or renewal is not more disadvantageous to the
Holders in any material respect, as determined in the good faith judgment of the Board of Directors of the Issuer when taken as a whole than
the terms of such agreement in effect on the Issue Date;
    (vi) any agreement between any Person and an Affiliate of such Person existing at the time such Person is acquired by or merged into the
Issuer or a Restricted Subsidiary; provided , that such agreement was not entered into in contemplation of such acquisition or merger, or any
amendment thereto (so long as any such amendment is not disadvantageous to the Holders in any material respect in the good faith judgment
of the Board of Directors of the Issuer when taken as a whole as compared to such agreement as in effect on the date of such acquisition or
merger);
   (vii) transactions with customers, clients, suppliers, joint venture partners or purchasers or sellers of goods or services, in each case in the
ordinary course of the business of the Issuer and its Restricted Subsidiaries and otherwise in compliance with the terms of this Indenture;
provided that as determined in the good faith judgment of the Board of Directors of the Issuer, such transactions are on terms that are no less
favorable to the Issuer or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the
Issuer or such Restricted Subsidiary with an unrelated Person;

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   (viii) any issuance or sale of Capital Stock (other than Disqualified Stock) to Affiliates of the Issuer and the granting of registration and
other customary rights in connection therewith;
   (ix) the existence of, or the performance by the Issuer or any Restricted Subsidiary of its obligations under the terms of any stockholders
agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, and
any similar agreements which it may enter into thereafter; provided, however , that the existence of, or the performance by the Issuer or any
Restricted Subsidiary of its obligations under, any future amendment to any such existing transaction, agreement or arrangement or under
any similar transaction, agreement or arrangement entered into after the Issue Date shall only be permitted by this clause (ix) to the extent
that the terms of any such existing transaction, agreement or arrangement together with all amendments thereto, taken as a whole is not more
disadvantageous to the Holders in any material respect, as determined in the good faith judgment of the Board of Directors of the Issuer
when taken as a whole as compared to the such transaction, agreement or arrangement as in effect on the Issue Date;
   (x) the entering into of any tax sharing agreement or arrangement that complies with Section 4.06;
   (xi) pledges of Capital Stock of Unrestricted Subsidiaries;
    (xii) transactions in which the Issuer or any Restricted Subsidiary delivers to the Trustee a letter from an Independent Financial Advisor
stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or stating that the terms are not
materially less favorable than those that might reasonably have been obtained by the Issuer or such Restricted Subsidiary in a comparable
transaction at such time on an arm‟s-length basis from a Person that is not an Affiliate;
   (xiii) the provision of administrative services or other corporate support services to any Unrestricted Subsidiary or Variable Interest
Entity or other Affiliate, in an amount not to exceed $2.0 million in any fiscal year;
   (xiv) the Transactions and the payment of all fees and expenses related to the Transactions; and
   (xv) any employment agreements entered into by the Issuer or any Restricted Subsidiary in the ordinary course of business and otherwise
permitted by this Indenture.

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   Section 4.11 . Limitation on Liens.
   (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any
Lien (other than Permitted Liens) that secures obligations under any Indebtedness upon any of its property or assets (including Capital Stock of
Subsidiaries), or income or profits therefrom.
   Section 4.12 . Offer To Repurchase upon Change of Control.
    (a) If a Change of Control occurs, unless the Issuer exercises or has exercised its right to redeem all of the outstanding Notes pursuant to
Section 3.07, each Holder shall have the right to require the Issuer to repurchase all or any part (equal to $2,000 or larger integral multiples of
$1,000 in excess thereof) of such Holder‟s Notes at a purchase price in cash equal to 101% of the principal amount of the Notes plus accrued
and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant Record Date to receive interest due
on the relevant Interest Payment Date). Within 30 days following any Change of Control, unless the Issuer exercises or has exercised its right
to redeem all of the outstanding Notes pursuant to Section 3.07, the Issuer shall deliver notice (the “ Change of Control Offer ”) to each
Holder, with a copy to the Trustee, stating:
     (i) that a Change of Control has occurred and that such Holder has the right to require the Issuer to purchase such Holder‟s Notes at a
  purchase price in cash equal to 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to the date of purchase
  (subject to the right of Holders of record on a record date to receive interest on the relevant Interest Payment Date) (the “ Change of
  Control Payment ”);
     (ii) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed or sent
  electronically) (the “ Change of Control Payment Date ”);
     (iii) if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on
  the occurrence of such Change of Control; and
     (iv) the procedures determined by the Issuer, consistent with this Indenture, that a Holder must follow in order to have its Notes
  repurchased.
   The notice, if mailed in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives
such notice. If (A) the notice is mailed in a manner herein provided and (B) any Holder fails to receive such notice or a Holder receives such
notice but it is defective, such

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Holder‟s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other
Holders that properly received such notice without defect.
   (b) On the Change of Control Payment Date, the Issuer shall, to the extent lawful:
     (i) accept for payment all Notes or portions of Notes (of $2,000 or larger integral multiples of $1,000) properly tendered pursuant to the
   Change of Control Offer;
      (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes so
   tendered; and
      (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officer‟s Certificate stating the aggregate
   principal amount of Notes or portions of Notes being purchased by the Issuer.
   (c) The Paying Agent shall promptly transfer to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the
Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to
any unpurchased portion of the Notes surrendered, if any; provided that each such new Note shall be in a principal amount of $2,000 or larger
integral multiples of $1,000 in excess thereof.
   (d) If the Change of Control Payment Date is on or after an interest Record Date and on or before the related Interest Payment Date, any
accrued and unpaid interest shall be paid on the relevant Interest Payment Date to the Person in whose name a Note is registered at the close of
business on such record date.
    (e) The Issuer shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section Indenture applicable to a
Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer
(it being understood that such third party may make a Change of Control Offer that is conditioned upon and prior to the occurrence of a Change
of Control pursuant to this Section 4.12(e)).
   Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditioned
upon the consummation of such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the
Change of Control Offer.

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    (f) If Holders of not less than 90% in aggregate principal amount of the outstanding Notes properly tender and do not withdraw such Notes
in a Change of Control Offer (or an offer made by a third party as described in Section 4.12(e)) and the Issuer, or any third party making an
offer in lieu of the Issuer, as described above, purchases all of the Notes properly tendered and not withdrawn by such Holders, the Issuer or the
third party making such offer shall have the right, upon not less than 30 nor more than 60 days‟ prior notice, given not more than 30 days
following such purchase pursuant to the Change of Control Offer or offer by such third party described above, to redeem all the Notes that
remain outstanding following such purchase at a redemption price in cash equal to the applicable Change of Control Payment.
   (g) The Issuer shall comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Indenture, the Issuer shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this Indenture by virtue of the conflict.
   (h) Other than as specifically provided in this Section 4.12, any purchase pursuant to this Section 4.12 shall be made pursuant to the
provisions of Section 3.02, 3.05 and 3.06.
   Section 4.13 . Additional Guarantees.
   (a) The Issuer shall cause each Restricted Subsidiary that becomes a borrower under or that Guarantees, on the Issue Date or at any time
thereafter, Indebtedness under the ABL Facility or that Guarantees any other Indebtedness of the Issuer or any Subsidiary Guarantor to:
     (i) execute and deliver to the Trustee a supplemental indenture to this Indenture, the form of which is attached as Exhibit C hereto,
  pursuant to which such Restricted Subsidiary shall unconditionally Guarantee, on a joint and several basis, the full and prompt payment of
  the principal of, premium, if any, and interest on the Notes on a senior secured basis and all other obligations under this Indenture; and
      (ii) deliver to the Trustee an Officer‟s Certificate to the effect that:
         (A) such Guarantee has been duly executed and authorized; and
        (B) such Guarantee constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as
     enforcement thereof may be limited by bankruptcy,

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      insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement
      thereof is subject to general principles of equity.
   (b) Each Person that becomes a Guarantor after the Issue Date shall also become a party to the applicable Security Documents and the
Intercreditor Agreement and shall as promptly as practicable execute and deliver such security instruments, financing statements, mortgages,
deeds of trust (in substantially the same form as those executed and delivered with respect to the Collateral) and certificates and opinions of
counsel as may be necessary to vest in the Notes Agent a perfected first priority security interest (subject to Permitted Liens) in properties and
assets that constitute Notes Priority Collateral and a perfected second priority security interest (subject to Permitted Liens) in properties and
assets that constitute ABL Priority Collateral as security for the Notes or the Note Guarantees and as may be necessary to have such property or
asset added to the applicable Collateral as required under the Security Documents and this Indenture, and thereupon all provisions of this
Indenture relating to the Collateral shall be deemed to relate to such properties and assets to the same extent and with the same force and effect;
provided , however , that if granting such security interest in any such property or asset requires the consent of a third party, the Issuer shall use
commercially reasonable efforts to obtain such consent.
   Section 4.14 . Effectiveness of Covenants.
  (a) From and after the first day following the Issue Date that (i) the Notes have an Investment Grade Rating from both of the Ratings
Agencies and (ii) no Default has occurred and is continuing under this Indenture then, beginning on that day, the Issuer and its Restricted
Subsidiaries shall not be subject to Sections 4.06, 4.07, 4.08, 4.09, 4.10, 4.13 and 5.01(a)(iv), (collectively, the “ Suspended Covenants ”).
   (b) If at any time the Notes‟ credit rating is downgraded from an Investment Grade Rating by any Rating Agency or if a Default or Event of
Default occurs and is continuing, then the Suspended Covenants shall thereafter be reinstated (the “ Reinstatement Date ”) and be applicable
pursuant to the terms of this Indenture (including in connection with performing any calculation or assessment to determine compliance with
the terms of this Indenture), unless and until the Notes subsequently attain an Investment Grade Rating from both Rating Agencies and no
Default or Event of Default is in existence (in which event the Suspended Covenants shall no longer be in effect for such time that the Notes
maintain an Investment Grade Rating and no Default or Event of Default is in existence); provided , however , that no Default, Event of Default
or breach of any kind shall be deemed to exist under this Indenture, the Security Documents, the Intercreditor Agreement, the Notes or the Note
Guarantees with respect to the Suspended Covenants based on, and none of the Issuer or any of its Subsidiaries shall bear any liability for, any
actions taken or not taken or events occurring during any Suspension Period (as defined below), or any actions taken or not

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taken at any time pursuant to any contractual obligation arising after commencement of a Suspension Period and prior to the immediately
following Reinstatement Date, regardless of whether such actions, inactions or events would have been permitted if the applicable Suspended
Covenants remained in effect during such period. The periods of time between the date of suspension of the covenants and the immediately
following Reinstatement Date are each referred to as a “ Suspension Period .”
    (c) On a Reinstatement Date, all Indebtedness Incurred during the immediately preceding Suspension Period shall be classified as having
been Incurred pursuant to Section 4.08(a) or Section 4.08(b) (to the extent such Indebtedness would be permitted to be Incurred thereunder as
of the Reinstatement Date and after giving effect to Indebtedness Incurred prior to the Suspension Period and outstanding on the Reinstatement
Date). To the extent such Indebtedness would not be so permitted to be Incurred pursuant to Section 4.08(a) or Section 4.08(b), such
Indebtedness shall be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under Section 4.08(b)(iii).
Calculations made after a Reinstatement Date of the amount available to be made as Restricted Payments under Section 4.06 shall be made as
though Section 4.06 had been in effect since the Issue Date and throughout the immediately preceding Suspension Period. Accordingly,
Restricted Payments made during such Suspension Period shall reduce the amount available to be made as Restricted Payments under
Section 4.06(a). However, no Default or Event of Default shall be deemed to have occurred as a result of the Reinstatement Date occurring on
the basis of any actions taken or the continuance of any circumstances resulting from actions taken or the performance of obligations under
agreements entered into by the Issuer or any of the Restricted Subsidiaries during the Suspension Period (other than agreements to take actions
after the Reinstatement Date that would not be permitted outside of the Suspension Period entered into in contemplation of the Reinstatement
Date).
  (d) During any Suspension Period, the Board of Directors of the Issuer may not designate any of the Issuer‟s Subsidiaries as Unrestricted
Subsidiaries pursuant to this Indenture.
   (e) The Issuer shall provide the Trustee notice in an Officer‟s Certificate of the commencement or termination of the Suspension Period. The
Trustee shall have no obligation to verify such information and shall not be obligated to provide Holders notice of the commencement or
termination of the Suspension Period.


                                                                  ARTICLE 5
                                                                  SUCCESSORS
   Section 5.01 . Merger, Consolidation or Sale of All or Substantially All Assets.

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    (a) The Issuer shall not consolidate with or merge with or into or wind up into (whether or not such Issuer is the surviving corporation), or
sell, assign, convey, transfer, lease, convey or otherwise dispose of all or substantially all of its properties and assets, in one or more related
transactions, to any Person unless :
     (i) the resulting, surviving or transferee Person (the “ Successor Company ”) shall be a corporation organized and existing under the
  laws of the United States of America, any State of the United States, the District of Columbia or any territory thereof;
      (ii) the Successor Company (if other than such Issuer) assumes all of the obligations of the Issuer under the Notes and this Indenture
  pursuant to a supplemental indenture or other documentation and instruments and assumes by written agreement all of the obligations of the
  Issuer under the Security Documents and the Intercreditor Agreement and the Successor Company shall cause such amendments,
  supplements or other instruments to be executed, filed and recorded in such jurisdictions as may be required by applicable law to preserve
  and protect the Lien on the Collateral pledged by or transferred to such Person, together with such financing statements or comparable
  documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing
  statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or
  jurisdictions;
      (iii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;
     (iv) immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had
  occurred at the beginning of the applicable four-quarter period, either:
         (A) the Successor Company would be able to Incur at least $1.00 of additional Indebtedness pursuant to Section 4.08(a), or
       (B) the pro forma Consolidated Coverage Ratio for the Successor Company would be equal to or greater than the actual Consolidated
     Coverage Ratio for the Issuer immediately prior to such transaction;
     (v) unless the Issuer is the Successor Company, each Guarantor (unless it is the other party to the transactions above, in which case
  Section 5.01(a)(ii) shall apply) shall have by supplemental indenture confirmed that its Note Guarantee shall apply to such Person‟s
  obligations in respect of this Indenture and the Notes and shall have by written agreement confirmed that its obligations under the Security
  Documents

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   and the Intercreditor Agreement shall continue to be in effect and shall cause such amendments, supplements or other instruments to be
   executed, filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral
   pledged by such Guarantor, together with such financing statements or comparable documents as may be required to perfect any security
   interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform
   Commercial Code or other similar statute or regulation of the relevant states or jurisdictions; and
      (vi) in any of the foregoing transactions involving the execution and delivery of a supplemental indenture, such Issuer shall have
   delivered to the Trustee an Officer‟s Certificate and an Opinion of Counsel, each to the effect that such consolidation, merger or transfer and
   such supplemental indenture (if any) comply with this Indenture; provided that in giving such Opinion of Counsel such counsel may rely on
   an Officer‟s Certificate as to compliance with the Section 5.01(a)(iii) and Section 5.01(a)(iv) and as to any matters of fact.
   (b) (i) Notwithstanding Section 5.01(a)(iii) and Section 5.01(a)(iv),
         (A) any Restricted Subsidiary may consolidate with, merge with or into or transfer all or part of its properties and assets to the Issuer
      so long as no Capital Stock of such Restricted Subsidiary is distributed to any Person other than the Issuer; and
         (B) the Issuer may merge with an Affiliate of the Issuer solely for the purpose of reincorporating the Issuer in another jurisdiction in
      the United States of America, any State of the United States, the District of Columbia or any territory thereof, so long as the amount of
      Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby.
   (c) In addition, the Issuer shall not permit any Guarantor to, consolidate with or merge with or into or wind up into (whether or not such
Guarantor is the surviving corporation), or, directly or indirectly, sell, assign, convey, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties and assets any Person (other than (A) to the Issuer or a Restricted Subsidiary of the Issuer or (B) as an Asset
Sale or other disposition that does not conflict with Section 4.09) unless:
       (i) (A) the resulting, surviving or transferee Person (the “ Successor Guarantor ”) shall be a corporation, partnership, trust or limited
   liability company organized and existing under the laws of the United States of America, any State of the United States, the District of
   Columbia or any territory thereof;

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          (B) the Successor Guarantor, if other than such Guarantor, expressly assumes, by supplemental indenture or other documentation or
      instruments, executed and delivered to the Trustee, all the obligations of such Guarantor under the Note Guarantee, this Indenture, the
      Security Documents and the Intercreditor Agreement and shall cause such amendments, supplements or other instruments to be executed,
      filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral owned by
      or transferred to the Successor Guarantor, together with such financing statements or comparable documents as may be required to
      perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under
      the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions; and
        (C) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor
      Guarantor or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Guarantor or such
      Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing.
   (d) Notwithstanding the foregoing, (i) any Restricted Subsidiary may merge with or into or transfer all or part of its properties and assets to
the Issuer or a Restricted Subsidiary of the Issuer (ii) the Issuer or any Restricted Subsidiary may merge with another Person solely for the
purpose of reincorporating in a State of the United States, the District of Columbia or any territory thereof.
   (e) For purposes of this Section 5.01, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Issuer, which properties and assets, if held by the Issuer instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the Issuer on a consolidated basis, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Issuer.
   (f) In the event of any transaction described in and complying with Section 5.01, the Issuer or a Guarantor, as the case may be, shall be
released from its obligations under this Indenture and its Note Guarantee, as the case may be, and the Successor Company and the Successor
Guarantor, as the case may be, shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer or such
Guarantor, as the case may be, under this Indenture, the Note Guarantee (if a Guarantor), the Security Documents (as applicable) and the
Intercreditor Agreement, but the predecessor Issuer or Guarantor in the case of a lease of all or substantially all of its assets shall not be
released from its

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obligations to pay the principal, interest and premium (if any) on the Notes or, in the case of a Guarantor, shall not be released from its
obligations under its Note Guarantee. Solely for the purpose of computing amounts described in clauses (C)(1), (C)(2), (C)(3) and (C)(4) of
Section 4.06(a), the Successor Company shall only be deemed to have succeeded and be substituted for the Issuer with respect to periods
subsequent to the effective time of such merger, consolidation, combination or transfer of assets.
   Section 5.02 . Successor Entity Substituted. Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Issuer or a Restricted Subsidiary in accordance with Section 5.01, the successor Person
formed by such consolidation or into or with which the Issuer or a Restricted Subsidiary, as applicable, is merged or wound up or to which such
sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, winding up, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the Issuer
or such Restricted Subsidiary, as applicable, shall refer instead to the successor entity and not to the Issuer or such Restricted Subsidiary, as
applicable), and may exercise every right and power of the Issuer or such Restricted Subsidiary, as applicable, under this Indenture with the
same effect as if such successor Person had been named as the Issuer or such Restricted Subsidiary, as applicable, herein; provided that the
predecessor Issuer shall not be relieved from the obligation to pay the principal of, premium, if any, and interest on the Notes except in the case
of a sale, assignment, transfer, conveyance or other disposition of all of the Issuer‟s assets that meets the requirements of Section 5.01.


                                                                 ARTICLE 6
                                                            DEFAULTS AND REMEDIES
   Section 6.01 . Events of Default.
   (a) Each of the following is an Event of Default (each an “ Event of Default ”):
      (i) default in any payment of interest on any Note when due and such default continues for 30 days;
     (ii) default in the payment of principal of or premium, if any, on any Note when due at its Stated Maturity, upon optional redemption,
  upon required repurchase, upon declaration or otherwise;
      (iii) failure by any Issuer or any Guarantor to comply with its obligations under Section 5.01;

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   (iv) failure by the Issuer or the Guarantors to comply for 60 days after notice as provided below with its other covenants or agreements
contained in this Indenture or the Notes (other than those specified in Sections 6.01(a)(i), 6.01(a)(ii) or 6.01(a)(iii));
   (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 Issuer or any of the Restricted Subsidiaries (or the payment of which is Guaranteed by the
Issuer or any of the Restricted Subsidiaries), other than Indebtedness owed to the Issuer or a Restricted Subsidiary, whether such
Indebtedness or Guarantee now exists, or is created after the Issue Date, which default:
     (A) is caused by a failure to pay principal of such Indebtedness at its stated final maturity (after giving effect to any applicable grace
  periods provided in such Indebtedness) (“ payment default ”); or
      (B) results in the acceleration of such Indebtedness prior to its maturity (the “ cross acceleration provision ”);
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 $20.0 million or more;
   (vi) the Issuer, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of
the date of the latest audited consolidated financial statements of the Issuer and its Restricted Subsidiaries), would constitute a Significant
Subsidiary, pursuant to or within the meaning of any Bankruptcy Code or any similar federal or state law for the relief of debtors:
      (A) commences proceedings to be adjudicated bankrupt or insolvent;
     (B) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent
  seeking an arrangement of debt, reorganization, dissolution, winding up or relief under applicable Bankruptcy Code or any similar federal
  or state law for the relief of debtors;
     (C) consents to the appointment of a receiver, interim receiver, receiver and manager, liquidator, assignee, trustee, sequestrator or
  other similar official of it or for all or substantially all of its property;

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      (D) makes a general assignment for the benefit of its creditors; or
      (E) generally is not paying its debts as they become due;
    (vii) a court of competent jurisdiction enters an order or decree under any Bankruptcy Code or any similar federal or state law for the
relief of debtors that:
      (A) is for relief against the Issuer, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries
  that, taken together (as of the date of the most recent audited consolidated financial statements of the Issuer and its Restricted
  Subsidiaries), would constitute a Significant Subsidiary, in a proceeding in which the Issuer, any such Restricted Subsidiary that is a
  Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated
  financial statements of the Issuer and its Restricted Subsidiaries), would constitute a Significant Subsidiary, is to be adjudicated bankrupt
  or insolvent;
      (B) appoints a receiver, interim receiver, receiver and manager, liquidator, assignee, trustee, sequestrator or other similar official of the
  Issuer, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the
  date of the latest audited consolidated financial statements of the Issuer and its Restricted Subsidiaries), would constitute a Significant
  Subsidiary, or for all or substantially all of the property of the Issuer, any Restricted Subsidiary that is a Significant Subsidiary or any
  group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements of the Issuer and
  its Restricted Subsidiaries), would constitute a Significant Subsidiary; or
     (C) orders the liquidation, dissolution or winding up of the Issuer, or any Restricted Subsidiary that is a Significant Subsidiary or any
  group of Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements of the Issuer and its
  Restricted Subsidiaries), would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days;

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     (viii) failure by the Issuer or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited
  consolidated financial statements for the Issuer and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final
  judgments aggregating in excess of $20.0 million (net of any amounts covered by insurance policies issued by a reputable and creditworthy
  insurance company as to which coverage has not been denied in writing), which judgments are not paid, discharged or stayed for a period of
  more than 60 days after such judgment becomes final, and in the event such judgment is covered by insurance, an enforcement proceeding
  has been commenced by any creditor upon such judgment or decree which is not promptly stayed (the “ judgment default provision ”);
     (ix) any Note Guarantee, Security Document or obligation under the Intercreditor Agreement ceases to be in full force and effect (except
  as contemplated by the terms of this Indenture) or is declared null and void in a judicial proceeding or any Guarantor denies or disaffirms its
  obligations under this Indenture or its Note Guarantee; or
     (x) with respect to any Collateral, individually or in the aggregate, having a fair market value in excess of $5.0 million, any of the
  Security Documents ceases to be in full force and effect, or any of the Security Documents ceases to give the Holders of the Notes the Liens
  purported to be created thereby, or any of the Security Documents is declared null and void or the Issuer or any Restricted Subsidiary denies
  in writing that it has any further liability under any of the Security Documents or gives written notice to such effect (in each case (i) other
  than in accordance with the terms of this Indenture or the terms of the ABL Facility or the Security Documents or (ii) unless waived by the
  requisite lenders under the ABL Facility if, after that waiver, the Issuer is in compliance with Article 10); provided that if a failure of the sort
  described in this clause (x) is susceptible of cure, no Event of Default shall arise under this clause (x) with respect thereto until 30 days after
  notice of such failure shall have been given to the Issuer by the Trustee or the Holders of at least 25% in principal amount of the then
  outstanding Notes issued under this Indenture.
   However, a Default under Section 6.01(a)(iv) shall not constitute an Event of Default until the Trustee or the Holders of 25% in principal
amount of the outstanding Notes notify the Issuer of the Default and the Issuer does not cure such Default within the time specified in Section
6.01(a)(iv) after receipt of such notice.
   Section 6.02 . Acceleration.
   (a) If any Event of Default (other an Event of Default specified in Section 6.01(a)(vi) and Section 6.01(a)(vii)) occurs and is continuing
under this

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Indenture, the Trustee by written notice to the Issuer specifying the Event of Default, or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes by written notice to the Issuer and the Trustee, may, and the Trustee at the request of such Holders shall,
declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Notes to be due and payable. Upon such a
declaration, such principal, premium and accrued and unpaid interest shall be due and payable immediately.
   (b) In the event of a declaration of acceleration of the Notes because an Event of Default pursuant to Section 6.01(a)(v) has occurred and is
continuing, the declaration of acceleration of the Notes shall be automatically annulled if the Default triggering such Event of Default pursuant
to Section 6.01(a)(v) shall be remedied or cured by the Issuer or a Restricted Subsidiary or waived by the holders of the relevant Indebtedness
within 20 days after the declaration of acceleration with respect thereto and if (i) the annulment of the acceleration of the Notes would not
conflict with any judgment or decree of a court of competent jurisdiction and (ii) all existing Events of Default, except nonpayment of
principal, premium or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.
   (c) Notwithstanding the foregoing, in case an Event of Default under Section 6.01(a)(vi) and Section 6.01(a)(vii) occurs and is continuing,
the principal of, premium, if any, and accrued and unpaid interest on all the Notes shall become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holders.
   (d) The Holders of a majority in principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all
Holders rescind an acceleration with respect to the Notes and its consequences if (i) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (ii) all existing Events of Default (except nonpayment of the principal of, premium, if any, and
interest, if any, on the Notes that have become due solely because of the acceleration) have been cured or waived.
   Section 6.03 . Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of, premium, if any, and interest, if any, on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
   The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair
the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by
law.

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   Section 6.04 . Waiver of Past Defaults. The Holders of a majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of all Holders waive any existing Default and its consequences hereunder, except:
   (a) a continuing Default in the payment of the principal of, premium, if any, or interest on any Note held by a non-consenting Holder
(including in connection with a Collateral Proceeds Offer, an Asset Sale Offer or a Change of Control Offer); and
   (b) a Default with respect to a provision that under Section 9.02 cannot be amended without the consent of each Holder affected,
provided , that subject to Section 6.02, the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture,
but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
    Section 6.05 . Control by Majority. The Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the
time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or of exercising any trust or power
conferred on the Trustee. However, the Trustee or the Notes Agent, as the case may be, may refuse to follow any direction that conflicts with
law or this Indenture, the Notes, the Guarantees, the Security Documents or the Intercreditor Agreement or that the Trustee determines in good
faith is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability or expense for which the
Trustee has not received an indemnity reasonably satisfactory to it.
  Section 6.06 . Limitation on Suits. Subject to Section 6.07, no Holder of a Note may pursue any remedy with respect to this Indenture or the
Notes (subject to the Intercreditor Agreement) unless:
   (a) such Holder has previously given the Trustee written notice that an Event of Default is continuing;
   (b) Holders of at least 25% in aggregate principal amount of the then outstanding Notes have requested the Trustee to pursue the remedy;
   (c) such Holders have offered the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense;
   (d) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and

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   (e) the Holders of a majority in aggregate principal amount of the then outstanding Notes have not given the Trustee a direction that, in the
opinion of the Trustee, is inconsistent with such request within such 60-day period.
A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder (it being
understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to
such Holders).
   Section 6.07 . Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to
receive payment of principal of, premium, if any, and interest on its Note, on or after the respective due dates expressed or provided for in such
Note (including in connection with an Asset Sale Offer or a Change of Control Offer), or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
   Section 6.08 . Collection Suit by Trustee. If an Event of Default specified in Section 6.01(a)(i) or (ii) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against the Issuer and any other obligor on the Notes for the whole
amount of principal of, premium, if any, and interest remaining unpaid on the Notes, together with interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee and its agents and outside counsel.
   Section 6.09 . Restoration of Rights and Remedies . If the Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the
Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Issuer, the Guarantors, the Trustee
and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding has been instituted.
   Section 6.10 . Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes in Section 2.07, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy are, to the extent permitted by law, cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

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   Section 6.11 . Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee or by the Holders, as the case may be.
   Section 6.12 . Trustee May File Proofs of Claim. The Trustee may file proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and outside counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuer
(or any other obligor on the Notes, including the Guarantors), its creditors or its property and is entitled and empowered to participate as a
member in any official committee of creditors appointed in such matter and to collect, receive and distribute any money or other property
payable or deliverable on any such claims. Any custodian in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the compensation, expenses, disbursements and advances of the Trustee and its agents and outside counsel,
and any other amounts due the Trustee or the Notes Agent under Section 7.07. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee or the Notes Agent under
Section 7.07 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
   Section 6.13 . Priorities.
    (a) With respect to the Collateral, if the Trustee collects any money or property pursuant to this Article 6, or pursuant to the foreclosure or
other remedial provisions contained in the Security Documents or the Intercreditor Agreement, it shall pay out the money or property in the
following order:
     (i) to the Trustee and the Notes Agent and their respective agents and outside attorneys for amounts due under Section 7.07, including
  payment of all compensation, expenses and liabilities incurred,

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   and all advances made, by the Trustee or the Notes Agent and the costs and expenses of collection;
      (ii) to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest, if any, ratably, without preference or
   priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and
      (iii) to the Issuer or to such party as a court of competent jurisdiction shall direct, including a Guarantor, if applicable.
   (b) The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.13. Promptly after any record
date is set pursuant to this Section 6.13, the Trustee shall cause notice of such record date and payment date to be given to the Issuer and to
each Holder in the manner set forth in Section 13.02.
    Section 6.14 . Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the
Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in such suit of an
undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys‟ fees and
expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.14 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by Holders of more than
10% in aggregate principal amount of the then outstanding Notes.


                                                                     ARTICLE 7
                                                                      TRUSTEE
   Section 7.01 . Duties of Trustee.
   (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the
conduct of such person‟s own affairs.
   (b) Except during the continuance of an Event of Default:
      (i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee need perform only
   those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this
   Indenture against the Trustee; and

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     (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the
  opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture.
  However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the
  Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the form requirements of this
  Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
   (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
      (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
    (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved in a court of
  competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and
     (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received
  by it pursuant to Section 6.05.
   (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.
   (e) The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of
the Holders unless the Holders have offered to the Trustee indemnity or security reasonably satisfactory to it against any loss, liability or
expense.
   (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money
held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
   Section 7.02 . Rights of Trustee.
   (a) The Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document,
but the Trustee, in its

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discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine in good
faith to make such further inquiry or investigation, it shall be entitled upon reasonable notice during normal business hours to examine the
books, records and premises of the Issuer, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.
    (b) Before the Trustee acts or refrains from acting, it may require an Officer‟s Certificate or an Opinion of Counsel or both, subject to the
other provisions of this Indenture. The Trustee shall not be liable for any action it takes or omits to take in good faith in conclusive reliance on
such Officer‟s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon.
    (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or
attorney appointed with due care.
  (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
   (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer or a Guarantor shall be
sufficient if signed by an Officer of the Issuer or such Guarantor.
   (f) None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise to incur any liability,
financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if an indemnity
reasonably satisfactory to it against such risk or liability is not assured to it.
   (g) The Trustee shall not be deemed to have notice or knowledge of any Default or Event of Default unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the existence of a Default or Event of Default, the Notes and this Indenture.
   (h) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.

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   (i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Notes Agent and by the Trustee in each of its capacities hereunder, and each agent, custodian
and other Person employed to act hereunder.
    (j) The Trustee may request that the Issuer deliver an Officer‟s Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture, which Officer‟s Certificate may be signed by any person authorized
to sign an Officer‟s Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.
      (k) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.
   (l) Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer request or Issuer order and any
resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution.
      (m) The permissive right of the Trustee to take the actions permitted by this Indenture shall not be construed as an obligation or duty to do
so.
   Section 7.03 . Individual Rights. The Trustee, any Agent or the Notes Agent in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee,
such Agent or the Notes Agent. However, in the event that the Trustee acquires any conflicting interest within the meaning of Section 310(b) of
the Trust Indenture Act, it must eliminate such conflict within 90 days or resign. The Trustee is also subject to Sections 7.10 and 7.11.
   Section 7.04 . Disclaimer. Neither the Trustee nor the Notes Agent shall be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the Notes, the Guarantees, the Security Documents or the Intercreditor Agreement, it shall not be accountable for
the Issuer‟s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer‟s direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee or the Notes
Agent, as the case may be, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other
document in connection with the sale of the Notes or pursuant to this Indenture other than the Trustee‟s certificate of authentication on the
Notes.
   Section 7.05 . Notice of Defaults. If a Default occurs and is continuing and if it is actually known to the Trustee, the Trustee shall mail to
each Holder a notice of the Default within 90 days after it occurs. Except in the case of an Event

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of Default specified in clauses (i) or (ii) of Section 6.01(a), the Trustee may withhold from the Holders notice of any continuing Default if a
Responsible Officer of the Trustee determines in good faith that withholding the notice is in the interests of the Holders.
    The Trustee shall have no duty to inquire as to the performance of the covenants of the Issuer and/or its Restricted Subsidiaries in Article 4.
In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of Default except: (i) any Event of Default occurring
pursuant to Sections 6.01(a)(i) or 6.01(a)(ii) (provided it is acting as Paying Agent); and (ii) any Default or Event of Default of which a
Responsible Officer shall have received written notification. Delivery of reports, information and documents to the Trustee under Section 4.03
is for informational purposes only and the Trustee‟s receipt of the foregoing shall not constitute constructive or actual notice of any information
contained therein or determinable from information contained therein, including the Issuer‟s compliance with any of their covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officer‟s Certificates).
   Section 7.06 . Reports by Trustee to Holders of the Notes. Within 60 days after each March 15, beginning with March 15, 2012, and for so
long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies
with Trust Indenture Act Section 313(a) (but if no event described in Trust Indenture Act Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also shall comply with Trust Indenture Act Section 313(b)(2). The
Trustee shall also transmit by mail all reports as required by Trust Indenture Act Section 313(c). To the extent that this Indenture is required to
be qualified under the Trust Indenture Act in connection with an issuance of Additional Notes in a registered offering or otherwise, the Trustee
shall also comply with Section 313(d). The Issuer shall promptly notify the Trustee in writing in the event the Notes are listed on any national
securities exchange or delisted therefrom. A copy of each report at the time of its mailing to the Holders will be delivered by the Trustee to the
Issuer.
   Section 7.07 . Compensation and Indemnity.
    (a) The Issuer and the Guarantors, jointly and severally, shall pay to the Trustee from time to time such compensation for its acceptance of
this Indenture and services hereunder as the parties shall agree in writing from time to time. The Trustee‟s compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee‟s agents and outside counsel.

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    (b) The Issuer and the Guarantors, jointly and severally, shall indemnify the Trustee, including its officers, directors, employees and agents,
for, and hold each of the Trustee, including its officers, directors, employees and agents, and any predecessor harmless against, any and all loss,
damage, claims, liability or expense (including reasonable attorneys‟ fees and expenses (other than the allocated cost of internal counsel)) but
other than any taxes based upon or determined by income of the Trustee incurred by it in connection with the acceptance or administration of
this trust and the performance of its duties hereunder and under the Notes, the Guarantees, the Security Documents and the Intercreditor
Agreement (including the costs and expenses of enforcing this Indenture, the Notes, the Guarantees, the Security Documents and the
Intercreditor Agreement against the Issuer or any Guarantor (including this Section 7.07)) or defending itself against any claim whether
asserted by any Holder, the Issuer or any Guarantor or any other Person, or liability in connection with the acceptance, exercise or performance
of any of its powers or duties hereunder). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee may
have separate counsel of its selection and the Issuer shall pay the reasonable fees and expenses of one such counsel (and any appropriate local
counsel). The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the
Trustee‟s own willful misconduct or negligence.
   (c) The obligations of the Issuer and the Guarantors under this Section 7.07 shall survive the satisfaction and discharge of this Indenture or
the earlier resignation or removal of the Trustee.
   (d) To secure the payment obligations of the Issuer and the Guarantors in this Section 7.07, the Trustee shall have a Lien prior to the Notes
on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien
shall survive the satisfaction and discharge of this Indenture.
    (e) Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(a)(vi) occurs, the expenses and the compensation for the services (including the fees and
expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Code or any similar federal or
state law for the relief of debtors.
   Section 7.08 . Replacement of Trustee or the Notes Agent.
   (a) A resignation or removal of the Trustee or the Notes Agent and appointment of a successor Trustee or a successor Notes Agent shall
become effective only upon the successor Trustee‟s or successor Notes Agent‟s acceptance of appointment as provided in this Section 7.08.
The Trustee or the

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Notes Agent may resign in writing at any time by giving 30 days prior notice of such resignation to the Issuer and be discharged from the trust
hereby created by so notifying the Issuer. The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove
the Trustee or the Notes Agent by so notifying the Trustee or the Notes Agent, as the case may be, and the Issuer in writing. The Issuer may
remove the Trustee or the Notes Agent if:
      (i) in the case of the Trustee, the Trustee fails to comply with Section 7.10;
      (ii) the Trustee or the Notes Agent, as the case may be, is adjudged a bankrupt or an insolvent or an order for relief is entered with respect
  to the Trustee or the Notes Agent under any Bankruptcy Code or any similar federal or state law for the relief of debtors;
      (iii) a receiver or public officer takes charge of the Trustee or the Notes Agent, as the case may be, or its property; or
      (iv) the Trustee or the Notes Agent, as the case may be, becomes incapable of acting.
   (b) If the Trustee or the Notes Agent resigns or is removed or if a vacancy exists in the office of Trustee or the Notes Agent for any reason,
the Issuer shall promptly appoint a successor Trustee or a successor Notes Agent, as the case may be. Within one year after the successor
Trustee or successor Notes Agent takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may
remove the successor Trustee or successor Notes Agent to replace it with another successor Trustee or successor Notes Agent.
    (c) If a successor Trustee or a successor Notes Agent does not take office within 60 days after the retiring Trustee or Notes Agent resigns or
is removed, the retiring Trustee or Notes Agent (in each case, at the Issuer‟s expense), the Issuer or the Holders of at least 10% in aggregate
principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee or
successor Notes Agent, as the case may be.
  (d) If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10, such
Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
   (e) A successor Trustee or successor Notes Agent shall deliver a written acceptance of its appointment to the retiring Trustee or Notes Agent
and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee or Notes Agent shall become effective, and the successor
Trustee or Notes Agent shall have all the rights, powers and duties of the Trustee or the Notes Agent under this

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Indenture. The successor Trustee or Notes Agent shall mail a notice of its succession to Holders. The retiring Trustee or Notes Agent shall
promptly transfer all property held by it as Trustee or Notes Agent to the successor Trustee or Notes Agent; provided that all sums owing to the
Trustee or the Notes Agent, as the case may be, hereunder have been paid and such transfer shall be subject to the Lien provided for in
Section 7.07. Notwithstanding replacement of the Trustee or the Notes Agent pursuant to this Section 7.08, the Issuer‟s obligations under
Section 7.07 shall continue for the benefit of the retiring Trustee or Notes Agent.
   (f) As used in this Section 7.08, the term “Trustee” shall also include each Agent.
   Section 7.09 . Successor by Merger, Etc. Any business entity into which the Trustee or Notes Agent may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger, conversion or consolidation to which the Trustee or Notes Agent shall
be a party, or any entity succeeding to all or substantially all of the corporate trust business of the Trustee or the Notes Agent, shall be the
successor of the Trustee and Notes Agent, as applicable, hereunder, without the execution or filing of any paper or any further act on the part of
any of the parties hereto, but in each case, subject to Section 7.10.
   Section 7.10 . Eligibility; Disqualification.
   (a) There shall at all times be a Trustee hereunder that is a corporation or national banking association organized and doing business under
the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is
subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition.
   (b) This Indenture shall always have a Trustee who satisfies the requirements of Trust Indenture Act Sections 310(a)(1), (2) and (5). The
Trustee is subject to Trust Indenture Act Section 310(b).
   Section 7.11 . Preferential Collection of Claims Against the Issuer. The Trustee is subject to Trust Indenture Act Section 311(a), excluding
any creditor relationship listed in Trust Indenture Act Section 311(b). A Trustee who has resigned or been removed shall be subject to Trust
Indenture Act Section 311(a) to the extent indicated therein.


                                                                  ARTICLE 8
                                                   LEGAL DEFEASANCE AND COVENANT DEFEASANCE
   Section 8.01 . Option To Effect Legal Defeasance or Covenant Defeasance. The Issuer may, at its option and at any time, elect to have either
Section 8.02 or

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8.03 applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.
   Section 8.02 . Legal Defeasance and Discharge.
   (a) Upon the Issuer‟s exercise under Section 8.01 of the option applicable to this Section 8.02, the Issuer and the Guarantors shall, subject to
the satisfaction of the conditions set forth in Section 8.04, be deemed to have been discharged from their obligations with respect to all
outstanding Notes and Guarantees on the date the conditions set forth below are satisfied (“ Legal Defeasance ”). For this purpose, Legal
Defeasance means that the Issuer and the Guarantors shall be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, and the Note Guarantees, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 and the
other Sections of this Indenture referred to in clauses (i) and (ii) below, and to have satisfied all of their other obligations under such Notes, the
Note Guarantees and this Indenture (and the Trustee, on written demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:
      (i) the rights of Holders of outstanding Notes issued under this Indenture to receive payments in respect of the principal of, or interest or
   premium, if any, on such Notes when such payments are due from the trust created pursuant to this Indenture referred to in Section 8.04;
      (ii) the Issuer‟s obligations with respect to the Notes issued under this Indenture concerning issuing temporary Notes, registration of
   Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments
   held in trust;
      (iii) the rights, powers, trusts, duties and immunities of the Trustee, and the Issuer‟s and Guarantors‟ obligations in connection therewith;
   and
      (iv) this Section 8.02.
   If the Issuer exercises the Legal Defeasance option, the Liens on the Collateral shall be released and the Note Guarantees in effect at such
time shall terminate.
  (b) Following the Issuer‟s exercise of its Legal Defeasance option, payment of the Notes may not be accelerated because of an Event of
Default.

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    (c) Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 notwithstanding the prior exercise of
its option under Section 8.03.
    Section 8.03 . Covenant Defeasance. Upon the Issuer‟s exercise under Section 8.01 of the option applicable to this Section 8.03, the Issuer
and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04, be released from their obligations under the
covenants contained in Sections 3.09, 3.10, 4.03, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13, Sections 5.01(a)(iv) and 5.01(a)(vi) and
Section 9.07, with respect to the outstanding Notes, and the Guarantors shall be deemed to have been discharged from their obligations with
respect to all Guarantees, on and after the date the conditions set forth in Section 8.04 are satisfied (“ Covenant Defeasance ”), and the Notes
shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to this Indenture, the outstanding Notes and the Guarantees, the Issuer and the Guarantors may omit to
comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under
Section 6.01, but, except as specified above, the remainder of this Indenture, such Notes and such Guarantees shall be unaffected thereby. In
addition, upon the Issuer‟s exercise under Section 8.01 of the option applicable to this Section 8.03, subject to the satisfaction of the conditions
set forth in Section 8.04, Section 6.01(a)(ii) (only to the extent relating to Section 3.09, 3.10, 4.09 and 4.12), 6.01(a)(iii) (only to the extent due
to the failure of the Issuer to comply with Section 5.01(a)(iv)), 6.01(a)(iv) (only with respect to covenants that are released as a result of such
Covenant Defeasance), 6.01(a)(v), 6.01(a)(vi) (solely with respect to Restricted Subsidiaries that are Significant Subsidiaries or a group of
Restricted Subsidiaries that, taken together as of the date of the most recent audited consolidated financial statements of the Issuer and its
Restricted Subsidiaries, would constitute a Significant Subsidiary), 6.01(a)(vii) (solely with respect to Restricted Subsidiaries that are
Significant Subsidiaries or a group of Restricted Subsidiaries that, taken together as of the date of the most recent audited consolidated financial
statements of the Issuer and its Restricted Subsidiaries, would constitute a Significant Subsidiary), 6.01(a)(viii), 6.01(a)(ix), 6.01(a)(x), in each
case shall not constitute Events of Default.
  Section 8.04 . Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the exercise of either the Legal
Defeasance option under

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Section 8.02 or the Covenant Defeasance option under Section 8.03 with respect to the Notes:
   (a) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders issued thereunder, cash in U.S. dollars,
non-callable U.S. Government Securities, or a combination of cash in U.S. dollars and non-callable U.S. Government Securities, in amounts as
shall be sufficient, in the opinion of a nationally recognized firm of certified public accountants without consideration of any reinvestment of
interest, to pay the principal of, or interest and premium, if any, on the outstanding Notes issued thereunder on the Stated Maturity or on the
applicable redemption date, as the case may be, and the Issuer must specify whether the Notes are being defeased to maturity or to a particular
redemption date;
    (b) in the case of legal defeasance, the Issuer has delivered to the Trustee an Opinion of Counsel of recognized standing with respect to U.S.
federal income tax matters confirming that (i) the Issuer has received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a change in the applicable U.S. federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the respective outstanding Notes will not recognize income,
gain or loss for U.S. federal income tax purposes as a result of such legal defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if such legal defeasance had not occurred;
   (c) in the case of covenant defeasance, the Issuer has delivered to the Trustee an Opinion of Counsel of recognized standing with respect to
U.S. federal income tax matters confirming that the Holders of the respective outstanding Notes will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such covenant defeasance had not occurred;
   (d) such legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Issuer or any of the Restricted Subsidiaries is a party or by which the Issuer or
any of the Restricted Subsidiaries is bound;
   (e) no Default or Event of Default has occurred and is continuing on the date of such deposit and such legal defeasance or covenant
defeasance shall not result in a breach or violation of, or constitute a default under the ABL Facility or material agreement or instrument to
which the Issuer or any Restricted Subsidiary is a party or by which the Issuer or any Restricted Subsidiary is bound (other than a Default or
Event of Default resulting from the borrowing of funds to be applied

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to such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the grant of any Lien securing such
borrowings);
    (f) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that, as of the date of such opinion and subject to
customary assumptions and exclusions, including, that no intervening bankruptcy of the Issuer between the date of deposit and the 91st day
following the deposit and assuming that no Holder is an “insider” of the Issuer under applicable bankruptcy law, after the 91st day following
the deposit, the trust funds shall not be subject to Section 547 of Title 11 of the U.S. Code;
   (g) the Issuer must deliver to the Trustee an Officer‟s Certificate stating that the deposit was not made by the Issuer with the intent of
defeating, hindering, delaying or defrauding creditors of the Issuer or others; and
   (h) the Issuer must deliver to the Trustee an Officer‟s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to
customary assumptions and exclusions), each to the effect that all conditions precedent relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
   Section 8.05 . Deposited Money and U.S. Government Obligations To Be Held in Trust; Other Miscellaneous Provisions.
   (a) Subject to Section 8.06, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee
pursuant to Section 8.04 in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions
of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or a Guarantor acting as
Paying Agent) as the Trustee may determine, to the Holders of all sums due and to become due thereon in respect of principal, premium, if any,
and interest, if any, but such money need not be segregated from other funds except to the extent required by law.
   (b) The Issuer and the Guarantors, jointly and severally, shall pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the cash or U.S. Government Obligations deposited pursuant to Section 8.04 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the account of the Holders.
   (c) Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time upon the
request of the Issuer any money or U.S. Government Obligations held by it as provided in Section 8.04 which, in the opinion of a nationally
recognized firm of certified public accountants, without consideration of any reinvestment of interest, expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a)), are in excess of the amount thereof

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that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
    Section 8.06 . Repayment to the Issuer. Subject to any applicable abandoned property law, any money deposited with the Trustee or any
Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium, if any, and Additional Interest, if any, on any
Note and remaining unclaimed for two years after such principal, premium, if any, or interest, if any, has become due and payable shall be paid
to the Issuer on its written request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall
thereafter look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Issuer as trustee thereof, shall thereupon cease; provided , however , that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Issuer cause to be published once, in The New York Times or The Wall Street
Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance of such money then remaining shall be repaid to the Issuer.
    Section 8.07 . Reinstatement. If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable U.S. Government
Obligations in accordance with Section 8.02 or Section 8.03, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuer‟s and the Guarantors‟ obligations under
this Indenture, the Notes and the Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or
Section 8.03 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or
Section 8.03, as the case may be; provided that, if the Issuer makes any payment of principal of, premium, if any, or interest, if any, on any
Note following the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders to receive such payment from the
money held by the Trustee or Paying Agent.


                                                               ARTICLE 9
                                                    AMENDMENT, SUPPLEMENT AND WAIVER
   Section 9.01 . Without Consent of Holders.
   (a) Notwithstanding Section 9.02, without the consent of any Holder, the Issuer, the Guarantors and the Trustee (and the Notes Agent in the
case of this Indenture, the Security Documents and the Intercreditor Agreement) may amend or supplement this Indenture, the Notes, the Note
Guarantees, the Security Documents and the Intercreditor Agreement to:
      (i) cure any ambiguity, omission, defect or inconsistency;

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  (ii) provide for the assumption by a successor corporation of the obligations of the Issuer or any Guarantor under this Indenture, the
Notes, the Note Guarantees, the Security Documents and the Intercreditor Agreement in accordance with Section 5.01;
   (iii) provide for uncertificated Notes in addition to or in place of certificated Notes; provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in
Section 163(f)(2)(B) of the Code;
   (iv) add Guarantees with respect to the Notes or release a Guarantor from its obligations under its Note Guarantee or this Indenture in
accordance with the applicable provisions of this Indenture;
   (v) add Additional Assets as Collateral or grant any Lien in favor of the Notes Agent to secure the Notes and the Note Guarantees;
   (vi) confirm and evidence the release, termination or discharge of any Guarantee or any Lien with respect to or securing the Notes when
such release, termination or discharge is provided for in accordance with the terms of this Indenture, Security Documents or the Intercreditor
Agreement;
   (vii) add to the covenants of the Issuer and its Restricted Subsidiaries, or Events of Default for the benefit of the Holders or to make
changes that would provide additional rights to the Holders or surrender any right or power conferred upon the Issuer or any Guarantor;
   (viii) make any change that does not adversely affect the rights of any Holder;
   (ix) provide for the appointment of a successor Trustee or Notes Agent; provided that the successor Trustee or Notes Agent is otherwise
qualified and eligible to act as such under the terms of this Indenture;
   (x) provide for or confirm the issuance of Additional Notes, in each case, in accordance with the terms of this Indenture, and which shall
be treated, together with any outstanding Notes, as a single class of securities;
    (xi) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this
Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided that (a) compliance with this
Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and
(b)

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  such amendment does not materially and adversely affect the rights of Holders to transfer Notes; or
      (xii) conform the text of this Indenture, the Notes or the Note Guarantees to any provision of the “Description of notes” section of the
  Offering Memorandum to the extent that such provision in the “Description of notes” is intended to be a verbatim recitation of a provision of
  this Indenture, the Notes or the Note Guarantees, as certified in an Officer‟s Certificate delivered to the Trustee.
   (b) The Holders shall be deemed to have consented for purposes of the Security Documents and the Intercreditor Agreement to any
amendments, waivers and other modifications to the Security Documents and the Intercreditor Agreement to add other parties (or any
authorized agent thereof or trustee therefor) holding ABL Liens or Pari Passu Indebtedness that are Incurred in compliance with this Indenture
and the Security Documents.
   (c) Upon the request of the Issuer and upon receipt by the Trustee of the documents described in Section 13.04, the Trustee shall join with
the Issuer and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter
into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.
Notwithstanding the foregoing, no Opinion of Counsel shall be required in connection with the addition of a Guarantor under this Indenture
upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as
Exhibit C hereto, and delivery of an Officer‟s Certificate.
   Section 9.02 . With Consent of Holders.
    (a) Except as provided in Section 9.01 and 9.02(f), the Issuer, the Guarantors, the Trustee and the Notes Agent may amend or supplement
this Indenture, the Notes, the Note Guarantees, the Security Documents and the Intercreditor Agreement with the consent of the Holders of a
majority in principal amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class (including, without
limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing Default or Event
of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Notes, the Note
Guarantees, the Security Documents and the Intercreditor Agreement may be waived with the consent of the Holders of a majority in aggregate
principal amount of the then outstanding Notes (including Additional Notes, if any) voting as a single class (including consents obtained in
connection with the purchase of, or tender offer or

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exchange offer for, Notes). Section 2.08 and Section 2.09 shall determine which Notes are considered to be “outstanding” for the purposes of
this Section 9.02.
   (b) Upon the request of the Issuer and upon the filing with the Trustee of evidence of the consent of the Holders as aforesaid, and upon
receipt by the Trustee of the documents described in Section 13.04, the Trustee shall join with the Issuer and the Guarantors in the execution of
such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee‟s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental indenture.
  (c) It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.
   (d) After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall deliver to the Holders of Notes
affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to deliver such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.
  (e) Without the consent of each affected Holder, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any
Notes held by a non-consenting Holder):
      (i) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;
      (ii) reduce the stated rate of interest or extend the time for payment of interest on any Note;
      (iii) reduce the principal of or extend the Stated Maturity of any Note;
      (iv) reduce the premium payable upon the redemption or repurchase of any Note or change the date on which any Note may be redeemed
  or repurchased pursuant to Section 3.07, 4.09 or 4.12;
      (v) make any Note payable in money other than that stated in such Note;
     (vi) impair the right of any Holder to receive payment of principal, premium, if any, and interest on such Holder‟s Notes on or after the
  due dates therefor or to institute suit for the enforcement of any

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  payment on or with respect to such Holder‟s Notes (it being understood that a waiver of a Default or Event of Default in the payment of
  principal of or interest or premium, if any, on the Notes issued hereunder is not permitted to impair the rights of non-consenting Holders);
      (vii) make any change in the amendment provisions that require each Holder‟s consent or in the waiver provisions; or
     (viii) modify the Note Guarantees in any manner materially adverse to the Holders or release any Guarantor from any of its obligations
  under its Note Guarantee or this Indenture, except in compliance with the terms hereof.
   (f) Without the consent of the Holders of at least 66 2 / 3 % in principal amount of Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), no amendment, supplement or waiver may:
     (i) modify any Security Document or the provisions in this Indenture dealing with Security Documents or application of trust moneys in
  any manner, taken as a whole, materially adverse to the Holders or otherwise release any Collateral other than in accordance with this
  Indenture, the Security Documents and the Intercreditor Agreement; or
     (ii) modify the Intercreditor Agreement in any manner adverse to the Holders in any material respect other than in accordance with the
  terms of this Indenture, the Security Documents and the Intercreditor Agreement.
   (g) A consent to any amendment, supplement or waiver of this Indenture, any Guarantee and the Notes by any Holder given in connection
with a tender of such Holder‟s Notes shall not be rendered invalid by such tender.
   Section 9.03 . [Intentionally Omitted]
   Section 9.04 . Revocation and Effect of Consents.
   (a) Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the
Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder‟s Note,
even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the
consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

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   (b) The Issuer may, but shall not be obligated to, fix a record date pursuant to Section 1.05 for the purpose of determining the Holders
entitled to consent to any amendment, supplement, or waiver.
   Section 9.05 . Notation on or Exchange of Notes.
   (a) The Issuer may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The
Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect
the amendment, supplement or waiver.
  (b) Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or
waiver.
   Section 9.06 . Trustee and Notes Agent To Sign Amendments, etc. The Trustee or the Notes Agent, as the case may be, shall sign any
amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights,
duties, liabilities or immunities of the Trustee or the Notes Agent, as the case may be. In executing any amendment, supplement or waiver, the
Trustee and the Notes Agent shall be entitled to receive and (subject to Section 7.01) shall be fully protected in conclusively relying upon an
Officer‟s Certificate and an Opinion of Counsel (except as provided in Section 9.01(b)) stating that the execution of such amended or
supplemental indenture is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and
binding obligation of the Issuer and any Guarantor party thereto, enforceable against them in accordance with its terms, subject to customary
exceptions, and complies with the provisions hereof.
    Section 9.07 . Payments for Consent. The Issuer and the Guarantors shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of any Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid and is paid
to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such
consent, waiver or amendment.


                                                                ARTICLE 10
                                                              SECURITY INTEREST
   Section 10.01 . Grant of Security Interest. (a) The Issuer‟s and the Guarantors‟ obligations to pay the principal (and Applicable Premium, if
any) and interest on the Notes in accordance with the terms of the Notes and this Indenture and all other Notes Obligations of the Issuer and the
Guarantors hereunder, under

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the Notes, the Note Guarantees and the Security Documents shall be secured as provided in the Security Documents.
   (b) As among the Holders, the Collateral as now or hereafter constituted shall be held for the equal and ratable benefit of the Holders,
without preference, priority or distinction of any thereof over any other by reason of differences in time of issuance, sale or otherwise, as
security for the Obligations under this Indenture and the Notes.
   (c) [Intentionally Omitted]
   (d) Each Holder, by its acceptance of the Notes, (i) initially appoints Wilmington Trust FSB as Notes Agent, (ii) authorizes and directs the
Notes Agent (x) to enter into the Intercreditor Agreement and the Security Documents, and to perform its obligations and exercise its rights
thereunder in accordance therewith, and (y) to receive for the benefit of the Holders any funds collected or distributed under the Intercreditor
Agreement or the Security Documents to which the Notes Agent is a party and to make further distributions of such funds to the Trustee for
distribution to the Holders according to the provisions of this Indenture and (iii) without limiting the foregoing, consents and agrees to all of the
terms and conditions of the Intercreditor Agreement, the Security Agreement, the Pledge Agreement and the other Security Documents
(including, without limitation, the provisions providing for foreclosure and release of Collateral).
   (e) If the same legal entity is both the Trustee and the Notes Agent, the Trustee shall not be (i) deemed to have breached its fiduciary duty as
Trustee to the Holders as a result of the performance of its duties as Notes Agent to the extent that it acts in compliance with the terms and
provisions of the Intercreditor Agreement and the Security Documents or (ii) liable to the Holders for any action taken or omitted in
compliance with the terms and provisions of the Intercreditor Agreement or the Security Documents.
   (f) In the event (i) the Trustee shall receive any written request from the Issuer, a Guarantor or any other party to a Security Document or
Intercreditor Agreement for consent or approval with respect to any matter or thing relating to any Collateral or the Issuer‟s or such Guarantor‟s
obligations with respect thereto, (ii) there shall be due to or from the Trustee or the Notes Agent under the provisions of the Intercreditor
Agreement or any Security Document any material performance or the delivery of any material instrument or (iii) the Trustee shall become
aware of any nonperformance by the Issuer or a Guarantor of any covenant or any breach of any representation or warranty of the Issuer or
such Guarantor set forth in the Intercreditor Agreement or any Security Document, then, in each such event, the Trustee shall be entitled to hire
experts, consultants, agents and attorneys to advise the Trustee on the manner in which the Trustee should respond, or direct the Notes Agent to
respond, to such request or render any requested performance or respond, or direct the Notes Agent to respond, to such nonperformance or
breach; provided that the Trustee‟s right to direct the

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Notes Agent to respond shall be subject to the terms of the Intercreditor Agreement and the Security Documents. The Trustee shall be fully
protected in the taking of any action recommended or approved by any such expert, consultant, agent or attorney or agreed to by the Holders of
a majority in principal amount of the Notes then outstanding.
   (g) Neither the Trustee nor the Notes Agent shall have any duty as to any Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto
and shall not be responsible for the filing, form or content of any financing or continuation statements or recording any documents or
instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the
Collateral. The Notes Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its or their possession if the
Collateral is accorded treatment substantially equal to that which it or they accord their own property and shall not be liable or responsible for
any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or
bailee selected by the Notes Agent in good faith.
   (h) Neither the Trustee nor the Notes Agent shall be responsible for the existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any
action or omission to act on its or their part hereunder, except to the extent such action or omission constitutes gross negligence, bad faith or
willful misconduct on the part of the Notes Agent or Trustee, as applicable, for the validity or sufficiency of the Collateral or any agreement or
assignment contained therein, for the validity of the title of the Issuer and the Guarantors to the Collateral, for insuring the Collateral or for the
payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral.
    Section 10.02 . Release of Security Interest. (a) The Notes Agent‟s Liens on the Collateral shall be released in accordance with, and to the
extent provided for in, Section 28 of the Security Agreement. Upon delivery by the Issuer to the Trustee and the Notes Agent of an Officers‟
Certificate describing the event which has resulted in the release of such Liens (and the Collateral subject to such release) and certifying that
the release of such Liens has occurred in accordance with the Security Agreement (and, to the extent provided for in the Security Agreement,
that the applicable transaction resulting in such release (if any) was effected in accordance with this Indenture, the Security Documents, and/or
the Intercreditor Agreement), the Trustee and/or the Notes Agent, as applicable, shall, if necessary, execute any reasonable document or
termination statement necessary to release, or confirm the release of, such Liens, all at the written request and expense of the Issuer. Nothing
set forth in this Section 10.02 shall limit the automatic Lien release provisions of any Security Document or the Intercreditor Agreement.

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    (b) The release of the Notes Agent‟s Liens in any part of the Collateral shall not be deemed to impair any such Liens in other parts of the
Collateral under this Indenture or the Security Documents or the Intercreditor Agreement or be deemed to be in contravention of the provisions
of this Indenture, any Security Document or the Intercreditor Agreement if and to the extent such Liens in such part of the Collateral are
released pursuant to the terms of this Indenture, the Security Documents and the Intercreditor Agreement.
   Section 10.03 . Pledge of Additional Collateral, Etc. (a) If the Issuer or any Guarantor acquires or holds any assets or property that are not
subject to the Liens securing the Notes Obligations (including because such Person was not previously party to the Security Agreement or any
other applicable Security Document), subject to the following two sentences and certain exceptions described in Section 2 of the Security
Agreement, the Issuer or such Guarantor shall execute and deliver such additional Security Documents (which may include supplements or
joinders to any of the Security Documents) and certificates and opinions of counsel as shall be reasonably necessary to vest in the Notes Agent
a perfected first priority security interest (to the extent such assets constitute Notes Priority Collateral) or second priority security interest (to
the extent such assets constitute ABL Priority Collateral), subject only to Permitted Liens, in such assets or property and to have such assets or
property added to the Collateral, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such assets
or property to the same extent and with the same force and effect.
   (b) The Issuer and the Guarantors shall comply with (i) the requirements set forth in the Security Agreement, the Pledge Agreement and the
Intercreditor Agreement with respect to the pledge of additional Collateral, the perfection of the related security interests and the taking of
related actions and (ii) all other covenants, agreements and obligations applicable to them contained in the Security Documents or the
Intercreditor Agreement.
   (c) If the Issuer or any Guarantor shall at any time after the Issue Date grant a mortgage on any real property to secure the ABL Obligations,
the Issuer or Guarantor shall provide a mortgage on such real property to secure the Notes Obligations, subject to the priorities and other
provisions set forth in the Intercreditor Agreement.
    Section 10.04 . Notes Agent. (a) Wilmington Trust FSB is appointed as Notes Agent for the benefit of the Holders of the Notes and shall
initially act as Notes Agent under this Indenture, the Security Documents and the Intercreditor Agreement.
   (b) Subject to the terms of the Intercreditor Agreement, the Notes Agent shall hold (directly or through co-trustees or agents), and shall be
entitled to enforce on behalf of the Holders of Notes, all Liens on the Collateral securing the Notes Obligations.

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    (c) All of the rights, protections, benefits, privileges, indemnities and immunities granted to the Trustee hereunder shall inure to the benefit
of the Notes Agent acting hereunder and under the Security Documents and the Intercreditor Agreement.
   Section 10.05 . Replacement of Notes Agent. The Notes Agent shall automatically be deemed to have resigned or been removed upon the
resignation or removal, as applicable, of the Trustee in accordance with Section 7.08 hereof.
   Section 10.06 . Ranking. The Trustee and each Holder of Notes by accepting a Note agrees, that:
    (a) To the extent and in the manner provided in the Intercreditor Agreement, (i) the Liens securing the Notes Obligations are (x) subject to
and junior in ranking to all present and future ABL Liens with respect to Collateral that is ABL Priority Collateral and (y) senior in ranking to
all present and future ABL Liens with respect to Collateral that is Notes Priority Collateral.
   (b) As among the ABL Agent, the Notes Agent, and the ABL Secured Parties and the Notes Secured Parties, (i) the ABL Secured Parties
and the ABL Agent shall have the sole ability to control and obtain remedies with respect to all ABL Priority Collateral without the necessity of
any consent or of any notice to any Notes Agent or Notes Secured Party, and (ii) the Notes Secured Parties and Notes Agents shall have the
sole ability to control and obtain remedies with respect to all Notes Priority Collateral without the necessity of any consent or of any notice to
any ABL Agent or ABL Secured Party, each subject to the limitations set forth in the Intercreditor Agreement.
   Section 10.07 . Notes Obligations Not Subordinated. The provisions of Section 10.06 are intended solely to set forth the relative ranking, as
Liens, of the Liens on the ABL Priority Collateral and the Notes Priority Collateral securing the Notes Obligations as against the Liens on the
ABL Priority Collateral and the Notes Priority Collateral securing the ABL Obligations. The Notes Obligations are senior obligations of the
Issuer and the Guarantors. Neither the Notes Obligations nor the exercise or enforcement of any right or remedy for the payment or collection
thereof (other than the exercise of rights and remedies in respect of the Collateral, which are subject to the Intercreditor Agreement) are
intended to be, or shall ever be by reason of the provisions of Section 10.06, in any respect subordinated, deferred, postponed, restricted or
prejudiced.


                                                                  ARTICLE 11
                                                                NOTE GUARANTEES
   Section 11.01 . The Note Guarantees. (a) Subject to the provisions of this Article 11, the Guarantors, as primary obligors and not merely as
sureties, shall jointly and severally irrevocably and unconditionally Guarantee, on a senior

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secured basis, the performance and full and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all
obligations of the Issuer under this Indenture (including obligations to the Trustee and Notes Agent) and the Notes, whether for payment of,
principal of, premium, if any, or interest on the Notes, fees, expenses, indemnification or otherwise (all such obligations guaranteed by such
Guarantors being herein called the “ Guaranteed Obligations ”). Each of the Guarantors also agrees to pay, in addition to the amount stated
above, any and all costs and expenses (including reasonable fees and expenses of counsel, agents and professional advisors) incurred by the
Trustee, the Notes Agent and/or the Holders in enforcing any rights under the Note Guarantees and such fees and expenses shall also be
deemed “Guaranteed Obligations”. Upon failure by the Issuer to pay punctually any such amount, each Guarantor shall forthwith on demand
pay the amount not so paid at the place and in the manner specified in this Indenture.
    (b) Each Note Guarantee is a continuing guarantee and shall (a) other than as provided elsewhere in this Article, remain in full force and
effect until payment in full of all the Guaranteed Obligations, (b) be binding upon each Guarantor and its successors and (c) inure to the benefit
of, and be enforceable by, the Trustee, the Notes Agent, the Holders and their successors, transferees and assigns.
   Section 11.02 . Note Guarantee Unconditional. The obligations of each Guarantor hereunder are unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:
  (a) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Issuer under this Indenture or any
Note, by operation of law or otherwise;
   (b) any modification or amendment of or supplement to this Indenture or any Note;
   (c) any change in the corporate existence, structure or ownership of the Issuer, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Issuer or their assets or, except as set forth in Article 8, any resulting release or discharge of any obligation of
the Issuer contained in this Indenture or any Note;
   (d) the existence of any claim, set off or other rights which the Guarantor may have at any time against the Issuer, the Trustee, the Notes
Agent or any other Person, whether in connection with this Indenture or any unrelated transactions, provided that nothing in this Indenture
prevents the assertion of any such claim by separate suit or compulsory counterclaim;

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   (e) any invalidity or unenforceability relating to or against the Issuer for any reason of this Indenture or any Note, or any provision of
applicable law or regulation purporting to prohibit the payment by the Issuer of the principal of or interest on any Note or any other amount
payable by the Issuer under this Indenture; or
   (f) any other act or omission to act or delay of any kind by the Issuer, the Trustee, the Notes Agent or any other Person or any other
circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to such
Guarantor‟s obligations hereunder.
   Section 11.03 . Discharge; Reinstatement. Each Guarantor‟s obligations hereunder shall remain in full force and effect until the principal of,
premium, if any, and interest on the Notes and all other amounts payable by the Issuer under this Indenture have been paid in full. If at any time
any payment of the principal of, premium, if any, or interest on any Note or any other amount payable by the Issuer under this Indenture is
rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Issuer or otherwise, each
Guarantor‟s obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such
time.
   Section 11.04 . Waiver by the Guarantors. Each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any
notice not provided for in this Indenture, as well as any requirement that at any time any action be taken by any Person against the Issuer or any
other Person.
   Section 11.05 . Subrogation and Contribution. Upon making any payment with respect to any obligation of the Issuer under this Article, the
Guarantor making such payment shall be subrogated to the rights of the payee against the Issuer with respect to such obligation, provided that
the Guarantor may not enforce either any right of subrogation, or any right to receive payment in the nature of contribution, or otherwise, from
any other Guarantor, with respect to such payment so long as any amount payable by the Issuer hereunder or under the Notes remains unpaid.
Each payment to be made by a Guarantor in respect of its Note Guarantee shall be made without set-off, counterclaim, reduction or diminution
of any kind or nature.
   Section 11.06 . Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Issuer under this Indenture or the
Notes is stayed upon the insolvency, bankruptcy or reorganization of the Issuer, all such amounts otherwise subject to acceleration under the
terms of this Indenture are nonetheless payable by the Guarantors hereunder forthwith on demand by the Trustee or the Holders.
   Section 11.07 . Limitation on Amount of Note Guarantee. Notwithstanding anything to the contrary in this Article 11, each Guarantor, and
by its acceptance

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of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a
fraudulent conveyance or fraudulent transfer under applicable fraudulent conveyance or fraudulent transfer provisions of the Bankruptcy Code
or any comparable provision of state law. To effectuate that intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that
the obligations of each Guarantor under its Note Guarantee are limited to the maximum amount that would not render such Guarantor‟s
obligations subject to avoidance or voidable under applicable fraudulent conveyance or fraudulent transfer provisions of the Bankruptcy Code
or any comparable provision of state or federal law affecting the rights of creditors generally. Each Guarantor that makes a payment under its
Note Guarantee shall be entitled upon payment in full of all Guaranteed Obligations under this Indenture to a contribution from each other
Guarantor in an amount equal to such other Guarantor‟s pro rata portion of such payment based on the respective net assets of all the
Guarantors at the time of such payment determined in accordance with GAAP.
    Section 11.08 . Execution and Delivery of Note Guarantee. The execution by each Guarantor of this Indenture (or a supplemental indenture
in the form of Exhibit C) evidences the Note Guarantee of such Guarantor, whether or not the person signing as an officer of the Guarantor still
holds that office at the time of authentication of any Note. The delivery of any Note by the Trustee after authentication constitutes due delivery
of the Note Guarantee set forth in this Indenture on behalf of each Guarantor.
   Section 11.09 . Release of Note Guarantee. Each Note Guarantee by a Guarantor shall provide by its terms that it shall be automatically and
unconditionally released and discharged, and no further action by such Guarantor, the Issuer, the Notes Agent or the Trustee is required for the
release of the such Guarantor‟s Note Guarantee, upon:
    (a) (i) any sale, exchange, disposition or transfer (by merger, amalgamation, consolidation or otherwise) of (i) the Capital Stock of such
Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary or (ii) all or substantially all the assets of such Guarantor,
in each case if such sale, exchange, disposition or transfer is made in compliance with the applicable provisions of this Indenture;
     (ii) the release or discharge of the guarantee by such Guarantor of Indebtedness under the ABL Facility, or such other guarantee that
  resulted in the creation of such Note Guarantee, except a discharge or release by or as a result of payment under such guarantee (it being
  understood that a release subject to a contingent reinstatement is still a release, and that if any such guarantee is so reinstated, such Note
  Guarantee shall also be reinstated to the extent that such Guarantor would then be required to provide a Note Guarantee pursuant to
  Section 4.13);

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     (iii) the designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in compliance with the applicable
  provisions of this Indenture; or
     (iv) the exercise by the Issuer of its legal defeasance option or covenant defeasance option in accordance with Article 8 hereof or the
  discharge of the Issuer‟s obligations under this Indenture in accordance with the terms of this Indenture; and
   (b) such Guarantor delivering to the Trustee an Officer‟s Certificate and Opinion of Counsel stating that all conditions precedent provided
for in this Indenture relating to such transaction have been complied with.


                                                               ARTICLE 12
                                                        SATISFACTION AND DISCHARGE
    Section 12.01 . Satisfaction and Discharge. This Indenture and the Security Documents shall be discharged and shall cease to be of further
effect (except the Issuer‟s obligations with respect to the Notes issued under this Indenture concerning issuing temporary Notes, registration of
Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held
in trust) as to all Notes issued hereunder, when:
   (a) either:
     (i) all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose
  payment money has been deposited in trust and thereafter repaid to the Issuer, have been delivered to the Trustee for cancellation; or
     (ii) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of
  redemption or otherwise, shall become due and payable at their Stated Maturity within one year or are to be called for redemption within one
  year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of
  the Issuer, and the Issuer or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely
  for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S. Government Securities, or a combination thereof, in such amounts as
  shall be sufficient, without consideration of any reinvestment of interest to pay and discharge the entire Indebtedness on the Notes not
  theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or
  redemption;

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    (b) no Default or Event of Default has occurred and is continuing on the date of the deposit or shall occur as a result of the deposit (other
than a Default resulting from borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing) and the
deposit shall not result in a breach or violation of, or constitute a default under, the ABL Facility or any other material instrument (other than
this Indenture) to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound;
   (c) the Issuer has paid or caused to be paid all sums payable by it under this Indenture; and
   (d) the Issuer has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of
the Notes issued hereunder at maturity or the redemption date, as the case may be.
    In addition, the Issuer must deliver an Officer‟s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
   Section 12.02 . Application of Trust Money.
   (a) Subject to the provisions of Section 8.06, all money or U.S. Government Obligations deposited with the Trustee pursuant to
Section 12.01 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either
directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal, premium, if any, and interest for whose payment such money has been deposited with the Trustee, but such
money need not be segregated from other funds except to the extent required by law.
   (b) If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 12.01 by
reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuer‟s and any Guarantor‟s obligations under this Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Section 12.01; provided that if the Issuer has made any payment of principal of, premium, if any, or
interest on any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent, as the case may be.

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                                                                 ARTICLE 13
                                                                MISCELLANEOUS
   Section 13.01 . [Intentionally Omitted]
   Section 13.02 . Notices.
   (a) Any notice or communication to the Issuer, any Guarantor, the Trustee or the Notes Agent is duly given if in writing and (i) delivered in
person, (ii) mailed by first-class mail, postage prepaid, or overnight air courier guaranteeing next day delivery or (iii) sent by facsimile or
electronic transmission, to the others‟ address:
  If to the Issuer and/or any Guarantor:
  c/o ADS Tactical, Inc.
  621 Lynnhaven Parkway, Suite 400
  Virginia Beach, Virginia 23452
  Fax No.: (757) 481-2039
  Attention:          Patricia Bohlen
                      Chief Financial Officer
  With a copy to:
  Latham & Watkins LLP
  885 Third Avenue
  New York, NY 10022-4834
  Fax No: (212) 751-4864
            Attention: Kirk A. Davenport, II
  If to the Trustee:
  Wilmington Trust FSB
  246 Goose Lane, Suite 105
  Guilford, CT 06437
  Fax         (203) 453-1183
No.:
  Attention:         Joseph O‟Donnell
  If to the Notes Agent:
  Wilmington Trust FSB
  246 Goose Lane, Suite 105
  Guilford, CT 06437
  Fax         (203) 453-1183
No.:
  Attention:         Joseph O‟Donnell

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The Issuer, any Guarantor, the Trustee or the Notes Agent, by like notice, may designate additional or different addresses for subsequent
notices or communications.
   (b) All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; on the first date of which publication is made, if by publication; five calendar days after being deposited in the
mail, postage prepaid, if mailed by first-class mail; the next Business Day after timely delivery to the courier, if mailed by overnight air courier
guaranteeing next day delivery; when receipt acknowledged, if sent by facsimile or electronic transmission; provided that any notice or
communication delivered to the Trustee or the Notes Agent shall be deemed effective upon actual receipt thereof.
    (c) Any notice or communication to a Holder shall be mailed by first-class mail or by overnight air courier guaranteeing next day delivery to
its address shown on the Note Register or by such other delivery system as the Trustee agrees to accept. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.
   (d) Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
   (e) Where this Indenture provides for notice of any event to a Holder of a Global Note, such notice shall be sufficiently given if given to the
Depositary for such Note (or its designee), pursuant to the applicable procedures of such Depositary, if any, prescribed for the giving of such
notice.
    (f) The Trustee agrees to accept and act upon notice, instructions or directions pursuant to this Indenture sent by unsecured facsimile or
electronic transmission; provided , however , that (i) the party providing such written notice, instructions or directions, subsequent to such
transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and
(ii) such originally executed notice, instructions or directions shall be signed by an authorized representative of the party providing such notice,
instructions or directions. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee‟s
reasonable conclusive reliance upon and compliance with such notice, instructions or directions notwithstanding such notice, instructions or
directions conflict or are inconsistent with a subsequent notice, instructions or directions.

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    (g) Other than as provided in 13.02(b) above, if a notice or communication is sent in the manner provided above within the time prescribed,
it is duly given, whether or not the addressee receives it.
   (h) If the Issuer mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.
   Section 13.03 . Communication by Holders with Other Holders. Holders may communicate pursuant to Trust Indenture Act Section 312(b)
with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Guarantors, the Trustee, the Registrar and
anyone else shall have the protection of Trust Indenture Act Section 312(c).
   Section 13.04 . Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer or any Guarantor to the
Trustee or the Notes Agent to take any action under this Indenture, the Intercreditor Agreement or any of the Security Documents, the Issuer or
such Guarantor, as the case may be, shall furnish to the Trustee or the Notes Agent:
    (a) an Officer‟s Certificate in form reasonably satisfactory to the Trustee or the Notes Agent, as the case may be (which shall include the
statements set forth in Section 13.05), stating that, in the opinion of the signer(s), all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been complied with; and
    (b) an Opinion of Counsel in form reasonably satisfactory to the Trustee or the Notes Agent, as the case may be (which shall include the
statements set forth in Section 13.05), stating that, in the opinion of such counsel, all such conditions precedent and covenants have been
complied with; provided that, subject to 5.01(c), no Opinion of Counsel shall be required in connection with the addition of a Guarantor under
this Indenture upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which
is attached as Exhibit C.
   Section 13.05 . Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided pursuant to Section 4.04) shall include:
   (a) a statement that the Person making such certificate or opinion has read such covenant or condition;
   (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such
certificate or opinion are based;

                                                                         132
   (c) a statement to the effect that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of
an Opinion of Counsel, may be limited to reliance on an Officer‟s Certificate as to matters of fact); and
   (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
   Section 13.06 . Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar
or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
   Section 13.07 . No Personal Liability of Directors, Officers, Employees, Members, Partners and Stockholders. No manager, director,
officer, employee, incorporator or, stockholder (other than in its capacity as a Guarantor) of the Issuer or any Guarantors, as such, shall have
any liability for any obligations of the Issuer or such Guarantor under the Notes, this Indenture, the Guarantees, the Security Documents or the
Intercreditor Agreement or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not
be effective to waive liabilities under the federal securities laws.
  Section 13.08 . Governing Law. THIS INDENTURE, THE NOTES AND ANY NOTE GUARANTEE WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
  Section 13.09 . Waiver of Jury Trial. EACH OF THE ISSUER, THE GUARANTORS, THE TRUSTEE AND THE NOTES AGENT
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
   Section 13.10 . Force Majeure. In no event shall the Trustee or the Notes Agent be responsible or liable for any failure or delay in the
performance of its obligations under this Indenture arising out of or caused by, directly or indirectly, forces beyond its reasonable control,
including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services; it
being understood that the Trustee and the Notes Agent shall use reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.

                                                                       133
    Section 13.11 . No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Issuer or its Restricted Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used
to interpret this Indenture. Notwithstanding the above and any contrary provision in this Indenture, this Indenture is subject to the provisions of
the Intercreditor Agreement and the Security Agreement. The Issuer, the Guarantors, the Holders, the Trustee and the Notes Agent
acknowledge and agree to be bound by the provisions of the Intercreditor Agreement and the Security Agreement.
   Section 13.12 . Successors. All agreements of the Issuer in this Indenture and the Notes shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors. All agreements of each Guarantor in this Indenture shall bind its successors, except as
otherwise provided in Section 11.09.
   Section 13.13 . Severability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
    Section 13.14 . Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or PDF
transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original
Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for
all purposes.
    Section 13.15 . Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections
of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
   Section 13.16 . U.S.A. PATRIOT Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. PATRIOT Act, the
Trustee and the Notes Agent are required to obtain, verify, and record information that identifies each person or legal entity that establishes a
relationship or opens an account with the Trustee or the Notes Agent. The parties to this Indenture agree that they shall provide the Trustee and
the Notes Agent with such information as they may request in order for them to satisfy the requirements of the U.S.A. PATRIOT Act.
   Section 13.17 . Payments Due on Non-Business Days. In any case where any Interest Payment Date, redemption date or repurchase date or
the Stated Maturity of the Notes shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Notes)
payment of interest or principal

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(and premium, if any) need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as
if made on the Interest Payment Date or redemption date or repurchase date, or at the Stated Maturity of the Notes, provided that no interest
shall accrue for the period from and after such Interest Payment Date, redemption date, repurchase date or Stated Maturity, as the case may be.
   Section 13.18 . Consent to Jurisdiction. The Issuer and each Guarantor hereby irrevocably submits to the non-exclusive jurisdiction of any
U.S. federal or New York State court sitting in New York, New York, in any action or proceeding arising out of or relating to this Indenture,
and the Issuer and each Guarantor hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and
determined in any such court and irrevocably waives any objection it may now or hereafter have as to the venue of any such suit, action or
proceeding brought in such a court or that such court is an inconvenient forum. Nothing herein shall limit the right of the Trustee or Notes
Agent or of any Holder to bring proceedings against the Issuer or any Guarantor in the courts of any other jurisdiction. Any judicial proceeding
by the Issuer or any Guarantor against the Trustee or Notes Agent or any affiliate of the Trustee or Notes Agent involving, directly or
indirectly, any matter in any way arising out of, related to, or connected with this Indenture shall be brought only in a court in New York, New
York.


                                                        [ Signatures on following page ]

                                                                       135
ISSUER

ADS TACTICAL, INC.

By:    /s/ Luke M. Hillier
       Name:      Luke M. Hillier
       Title:     CEO


GUARANTOR

ATLANTIC DIVING SUPPLY, INC.

By:   /s/ Luke M. Hillier
      Name:      Luke M. Hillier
      Title:     President


GUARANTOR

MAR-VEL INTERNATIONAL, INC.

By:   /s/ Luke M. Hillier
      Name:      Luke M. Hillier
      Title:     President



      Indenture
WILMINGTON TRUST FSB, as Trustee

By:   /s/ Joseph P O‟Donnell
      Name:       Joseph P O‟Donnell
      Title:      Vice President


WILMINGTON TRUST FSB, as Notes Agent

By:   /s/ Joseph P O‟Donnell
      Name:       Joseph P O‟Donnell
      Title:      Vice President



      Indenture
                                                                                                                                    APPENDIX A

                                PROVISIONS RELATING TO INITIAL NOTES AND ADDITIONAL NOTES
   Section 1.1 Definitions .
   (a) Capitalized Terms .
   Capitalized terms used but not defined in this Appendix A have the meanings given to them in this Indenture. The following capitalized
terms have the following meanings:
   “ Applicable Procedures ” means, with respect to any transfer or transaction involving a Regulation S Global Note or beneficial interest
therein, the rules and procedures of the Depositary for such Global Note, Euroclear and Clearstream, in each case to the extent applicable to
such transaction and as in effect from time to time.
   “ Clearstream ” means Clearstream Banking, Société Anonyme, or any successor securities clearing agency.
    “ Distribution Compliance Period ”, with respect to any Note, means the period of 40 consecutive days beginning on and including the
later of (a) the day on which such Note is first offered to persons other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S, notice of which day shall be promptly given by the Issuer to the Trustee, and (b) the date of issuance with respect to
such Note or any predecessor of such Note.
   “ Euroclear ” means the Euroclear Clearance System or any successor securities clearing agency.
   “ IAI ” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
   “ QIB ” means a “qualified institutional buyer” as defined in Rule 144A.
   “ Regulation S ” means Regulation S promulgated under the Securities Act.
   “ Rule 144 ” means Rule 144 promulgated under the Securities Act.
   “ Rule 144A ” means Rule 144A promulgated under the Securities Act.
   “ Rule 501 ” means Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
   “ Rule 904 ” means Rule 904 promulgated under the Securities Act.
   “ Transfer Restricted Note ” means any Note bearing the Restricted Notes Legend.
   “ Unrestricted Global Note ” means any Note in global form that does not bear or is not required to bear the Restricted Notes Legend.
   (b) Other Definitions .

                                                                                                                                              Defined in
Term:                                                                                                                                          Section:
“Agent Members”                                                                                                                                 2.1(c)
“Automatic Exchange”                                                                                                                            2.3(h)
“Automatic Exchange Date”                                                                                                                       2.3(h)
“Automatic Exchange Notice”                                                                                                                     2.3(h)
“Automatic Exchange Note Date”                                                                                                                  2.3(h)
“Definitive Notes”                                                                                                                              2.1(d)
“Definitive Notes Legend”                                                                                                                       2.3(e)
“Global Note”                                                                                                                                   2.1(b)
“Global Notes Legend”                                                                                                                           2.3(e)
“IAI Global Note”                                                                                                                               2.1(b)
“IAI Notes”                                                                                                                                     2.1(a)
“OID Notes Legend”                                                                                                                              2.3(e)
“Regulation S Global Note”                                                                                                                      2.1(b)
“Regulation S Notes”                                                                                                                            2.1(a)
“Restricted Notes Legend”                                                                                                                       2.3(e)
“Rule 144A Global Note”                                                                                                                         2.1(b)
“Rule 144A Notes”                                                                                                                               2.1(a)
   Section 2.1 Form and Dating .
    (a) The Initial Notes issued on the date hereof shall be (i) offered and sold by the Issuer to the Initial Purchasers and (ii) resold, initially only
to (1) QIBs in reliance on Rule 144A (“ Rule 144A Notes ”) and (2) Persons other than U.S. Persons (as defined in Regulation S) in reliance on
Regulation S (“ Regulation S Notes ”). Such Initial Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on
Regulation S and, except as set forth below, IAIs in accordance with Rule 501 (“ IAI Notes ”).
    (b) Global Notes . Rule 144A Notes shall be issued initially in the form of one or more permanent global Notes in definitive, fully
registered form, numbered from RA-1 upward (collectively, the “ Rule 144A Global Note ”) and Regulation S Notes shall be issued initially in
the form of one or more global Notes, numbered from RS-1 upward (collectively, the “ Regulation S Global Note ”), in each case without
interest coupons and bearing the Global Notes Legend and Restricted Notes Legend, which shall be deposited on behalf of the purchasers of the
Notes represented thereby with the Custodian, and registered in the name of the Depositary or a nom