Document:

Exhibit 4.9

 

[JONES ENERGY, INC.]

[JONES ENERGY HOLDINGS, LLC]

[JONES ENERGY FINANCE CORP.]

 

AND

 

ANY GUARANTORS PARTY HERETO

 

 

SUBORDINATED DEBT SECURITIES

 

 

FORM OF SUBORDINATED INDENTURE

 

Dated as of                           

 

 

[                                              ],

 

As Trustee

 

 

CROSS-REFERENCE TABLE*

 

	
Trust Indenture Act Section
    	
 
    	
Indenture Section
    
	
310(a)(1)
    	
 
    	
7.10
    
	
(a)(2)
    	
 
    	
7.10
    
	
(a)(3)
    	
 
    	
N/A
    
	
(a)(4)
    	
 
    	
N/A
    
	
(a)(5)
    	
 
    	
7.10
    
	
(b)
    	
 
    	
7.08, 7.10
    
	
(c)
    	
 
    	
N/A
    
	
311(a)
    	
 
    	
7.11
    
	
(b)
    	
 
    	
7.11
    
	
(c)
    	
 
    	
N/A
    
	
312(a)
    	
 
    	
2.07
    
	
(b)
    	
 
    	
12.03
    
	
(c)
    	
 
    	
12.03
    
	
313(a)
    	
 
    	
7.06
    
	
(b)(1)
    	
 
    	
7.06
    
	
(b)(2)
    	
 
    	
7.06
    
	
(c)
    	
 
    	
7.06
    
	
(d)
    	
 
    	
7.06
    
	
314(a)
    	
 
    	
4.03, 4.04
    
	
(b)
    	
 
    	
N/A
    
	
(c)(1)
    	
 
    	
12.04
    
	
(c)(2)
    	
 
    	
12.04
    
	
(c)(3)
    	
 
    	
N/A
    
	
(d)
    	
 
    	
N/A
    
	
(e)
    	
 
    	
12.05
    
	
(f)
    	
 
    	
N/A
    
	
315(a)
    	
 
    	
7.01(b)
    
	
(b)
    	
 
    	
7.05
    
	
(c)
    	
 
    	
7.01(a)
    
	
(d)
    	
 
    	
7.01(c)
    
	
(e)
    	
 
    	
6.11
    
	
316(a)(last sentence)
    	
 
    	
2.08
    
	
(a)(1)(A)
    	
 
    	
6.05
    
	
(a)(1)(B)
    	
 
    	
6.04
    
	
(a)(2)
    	
 
    	
N/A
    
	
(b)
    	
 
    	
6.07
    
	
317(a)(1)
    	
 
    	
6.08
    
	
(a)(2)
    	
 
    	
6.09
    
	
(b)
    	
 
    	
2.06
    
	
318(a)
    	
 
    	
12.01
    
	
(b)
    	
 
    	
N/A
    
	
(c)
    	
 
    	
N/A
    

 

N/A means not applicable.

*              This Cross-Reference Table is not part of the Indenture.

 

i

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I   DEFINITIONS AND INCORPORATION BY REFERENCE
    	
1
    
	
 
    	
 
    
	
SECTION 1.01
    	
Definitions
    	
1
    
	
SECTION 1.02
    	
Other Definitions
    	
7
    
	
SECTION 1.03
    	
Incorporation by   Reference of Trust Indenture Act
    	
7
    
	
SECTION 1.04
    	
Rules of   Construction
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE II   THE SECURITIES
    	
8
    
	
 
    	
 
    
	
SECTION 2.01
    	
Amount Unlimited; Issuable   in Series
    	
8
    
	
SECTION 2.02
    	
Denominations
    	
11
    
	
SECTION 2.03
    	
Forms Generally
    	
11
    
	
SECTION 2.04
    	
Execution,   Authentication, Delivery and Dating
    	
12
    
	
SECTION 2.05
    	
Registrar and Paying   Agent
    	
14
    
	
SECTION 2.06
    	
Paying Agent to Hold   Money in Trust
    	
14
    
	
SECTION 2.07
    	
Holder Lists
    	
14
    
	
SECTION 2.08
    	
Transfer and Exchange
    	
15
    
	
SECTION 2.09
    	
Replacement Securities
    	
15
    
	
SECTION 2.10
    	
Outstanding Securities
    	
16
    
	
SECTION 2.11
    	
Original Issue   Discount, Foreign-Currency Denominated and Treasury Securities
    	
16
    
	
SECTION 2.12
    	
Temporary Securities
    	
16
    
	
SECTION 2.13
    	
Cancellation
    	
17
    
	
SECTION 2.14
    	
Payments; Defaulted   Interest
    	
17
    
	
SECTION 2.15
    	
Persons Deemed Owners
    	
18
    
	
SECTION 2.16
    	
Computation of Interest
    	
18
    
	
SECTION 2.17
    	
Global Securities;   Book-Entry Provisions
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE III   REDEMPTION
    	
20
    
	
 
    	
 
    	
 
    
	
SECTION 3.01
    	
Applicability of   Article
    	
20
    
	
SECTION 3.02
    	
Notice to the Trustee
    	
20
    
	
SECTION 3.03
    	
Selection of Securities   To Be Redeemed
    	
21
    
	
SECTION 3.04
    	
Notice of Redemption
    	
21
    
	
SECTION 3.05
    	
Effect of Notice of   Redemption
    	
22
    
	
SECTION 3.06
    	
Deposit of Redemption   Price
    	
22
    
	
SECTION 3.07
    	
Securities Redeemed in   Part
    	
23
    
	
SECTION 3.08
    	
Purchase of Securities
    	
23
    
	
SECTION 3.09
    	
Mandatory and Optional   Sinking Funds
    	
23
    
	
SECTION 3.10
    	
Satisfaction of Sinking   Fund Payments with Securities
    	
24
    
	
SECTION 3.11
    	
Redemption of   Securities for Sinking Fund
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   COVENANTS
    	
25
    
	
 
    	
 
    
	
SECTION 4.01
    	
Payment of Securities
    	
25
    

 

ii

 

	
SECTION 4.02
    	
Maintenance of Office   or Agency
    	
25
    
	
SECTION 4.03
    	
SEC Reports; Financial   Statements
    	
25
    
	
SECTION 4.04
    	
Compliance Certificate
    	
26
    
	
SECTION 4.05
    	
Existence
    	
27
    
	
SECTION 4.06
    	
Waiver of Stay,   Extension or Usury Laws
    	
27
    
	
SECTION 4.07
    	
Additional Amounts
    	
27
    
	
 
    	
 
    	
 
    
	
ARTICLE V   SUCCESSORS
    	
28
    
	
 
    	
 
    
	
SECTION 5.01
    	
Limitations on Mergers   and Consolidations
    	
28
    
	
SECTION 5.02
    	
Successor Person   Substituted
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE VI   DEFAULTS AND REMEDIES
    	
29
    
	
 
    	
 
    
	
SECTION 6.01
    	
Events of Default
    	
29
    
	
SECTION 6.02
    	
Acceleration
    	
31
    
	
SECTION 6.03
    	
Other Remedies
    	
31
    
	
SECTION 6.04
    	
Waiver of Defaults
    	
32
    
	
SECTION 6.05
    	
Control by Majority
    	
32
    
	
SECTION 6.06
    	
Limitations on Suits
    	
32
    
	
SECTION 6.07
    	
Rights of Holders to   Receive Payment
    	
33
    
	
SECTION 6.08
    	
Collection Suit by   Trustee
    	
33
    
	
SECTION 6.09
    	
Trustee May File   Proofs of Claim
    	
33
    
	
SECTION 6.10
    	
Priorities
    	
34
    
	
SECTION 6.11
    	
Undertaking for Costs
    	
35
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   TRUSTEE
    	
35
    
	
 
    	
 
    
	
SECTION 7.01
    	
Duties of Trustee
    	
35
    
	
SECTION 7.02
    	
Rights of Trustee
    	
36
    
	
SECTION 7.03
    	
May Hold   Securities
    	
37
    
	
SECTION 7.04
    	
Trustee’s Disclaimer
    	
38
    
	
SECTION 7.05
    	
Notice of Defaults
    	
38
    
	
SECTION 7.06
    	
Reports by Trustee to   Holders
    	
38
    
	
SECTION 7.07
    	
Compensation and   Indemnity
    	
38
    
	
SECTION 7.08
    	
Replacement of Trustee
    	
39
    
	
SECTION 7.09
    	
Successor Trustee by   Merger, etc.
    	
41
    
	
SECTION 7.10
    	
Eligibility;   Disqualification
    	
41
    
	
SECTION 7.11
    	
Preferential Collection   of Claims Against the Company or a Guarantor
    	
41
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII   DISCHARGE OF INDENTURE
    	
42
    
	
 
    	
 
    
	
SECTION 8.01
    	
Termination of the   Company’s and the Guarantors’ Obligations
    	
42
    
	
SECTION 8.02
    	
Application of Trust   Money
    	
45
    
	
SECTION 8.03
    	
Repayment to Company or   Guarantor
    	
46
    
	
SECTION 8.04
    	
Reinstatement
    	
46
    
	
SECTION 8.05
    	
Miscellaneous   Provisions.
    	
46
    

 

iii

 

	
ARTICLE IX   SUPPLEMENTAL INDENTURES AND AMENDMENTS
    	
47
    
	
 
    	
 
    
	
SECTION 9.01
    	
Without Consent of   Holders
    	
47
    
	
SECTION 9.02
    	
With Consent of Holders
    	
48
    
	
SECTION 9.03
    	
Compliance with the   Trust Indenture Act
    	
50
    
	
SECTION 9.04
    	
Revocation and Effect   of Consents
    	
50
    
	
SECTION 9.05
    	
Notation on or Exchange   of Securities
    	
51
    
	
SECTION 9.06
    	
Trustee to Sign Amendments, etc.
    	
51
    
	
 
    	
 
    	
 
    
	
ARTICLE X   SUBORDINATION OF SECURITIES AND GUARANTEE
    	
52
    
	
 
    	
 
    
	
SECTION 10.01
    	
Applicability of   Article; Agreement to Subordinate
    	
52
    
	
SECTION 10.02
    	
Liquidation,   Dissolution, Bankruptcy
    	
52
    
	
SECTION 10.03
    	
Default on Senior   Indebtedness
    	
52
    
	
SECTION 10.04
    	
Acceleration of Payment   of Securities
    	
53
    
	
SECTION 10.05
    	
When Distribution Must   Be Paid Over
    	
54
    
	
SECTION 10.06
    	
Subrogation
    	
54
    
	
SECTION 10.07
    	
Relative Rights
    	
54
    
	
SECTION 10.08
    	
Subordination   May Not Be Impaired by the Company
    	
54
    
	
SECTION 10.09
    	
Rights of Trustee and   Paying Agent
    	
54
    
	
SECTION 10.10
    	
Distribution or Notice   to Representative
    	
55
    
	
SECTION 10.11
    	
Article X Not to   Prevent Defaults or Limit Right to Accelerate
    	
55
    
	
SECTION 10.12
    	
Trust Moneys Not   Subordinated
    	
55
    
	
SECTION 10.13
    	
Trustee Entitled to   Rely
    	
55
    
	
SECTION 10.14
    	
Trustee to Effectuate   Subordination
    	
56
    
	
SECTION 10.15
    	
Trustee Not Fiduciary   for Holders of Senior Indebtedness
    	
56
    
	
SECTION 10.16
    	
Reliance by Holders of   Senior Indebtedness on Subordination Provisions
    	
56
    
	
 
    	
 
    	
 
    
	
ARTICLE XI GUARANTEE
    	
57
    
	
 
    	
 
    
	
SECTION 11.01
    	
Guarantee
    	
57
    
	
SECTION 11.02
    	
Execution and Delivery   of Guarantees
    	
59
    
	
SECTION 11.03
    	
Limitation on Liability   of the Guarantors
    	
59
    
	
SECTION 11.04
    	
Release of Guarantors   from Guarantee
    	
59
    
	
SECTION 11.05
    	
Contribution
    	
60
    
	
 
    	
 
    	
 
    
	
ARTICLE XII   MISCELLANEOUS
    	
60
    
	
 
    	
 
    
	
SECTION 12.01
    	
Trust Indenture Act   Controls
    	
60
    
	
SECTION 12.02
    	
Notices
    	
60
    
	
SECTION 12.03
    	
Communication by   Holders with Other Holders
    	
61
    
	
SECTION 12.04
    	
Certificate and Opinion   as to Conditions Precedent
    	
62
    
	
SECTION 12.05
    	
Statements Required in   Certificate or Opinion
    	
62
    
	
SECTION 12.06
    	
Rules by Trustee   and Agents
    	
62
    
	
SECTION 12.07
    	
Legal Holidays
    	
62
    
	
SECTION 12.08
    	
No Recourse Against   Others
    	
63
    
	
SECTION 12.09
    	
Governing Law
    	
63
    
	
SECTION 12.10
    	
No Adverse   Interpretation of Other Agreements
    	
63
    

 

iv

 

	
SECTION 12.11
    	
Successors
    	
63
    
	
SECTION 12.12
    	
Severability
    	
63
    
	
SECTION 12.13
    	
Counterpart Originals
    	
63
    
	
SECTION 12.14
    	
Table of Contents,   Headings, etc.
    	
63
    
	
SECTION 12.15
    	
Waiver of Jury Trial
    	
64
    
	
SECTION 12.16
    	
Force Majeure
    	
64
    
	
SECTION 12.17
    	
USA PATRIOT Act
    	
64
    

 

v

 

INDENTURE dated as of              , among [JONES ENERGY, INC., a Delaware corporation][JONES ENERGY HOLDINGS, LLC, a Delaware limited liability company][JONES ENERGY FINANCE CORP., a Delaware corporation] (the “Company”), any Guarantors (as defined herein) party hereto and [                                              ], as trustee (the “Trustee”).

 

The Company and any Guarantors have duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of the Company’s subordinated debentures, notes, bonds or other evidences of indebtedness to be issued in one or more series unlimited as to principal amount (herein called the “Securities”), and the related Guarantees (as hereinafter defined), if any, as provided in this Indenture.

 

The Company, Guarantors and Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Securities:

 

ARTICLE I
 DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01                                                              Definitions.

 

“Additional Amounts” means any additional amounts required by the express terms of a Security or by or pursuant to a Board Resolution, under circumstances specified therein or pursuant thereto, to be paid by the Company or any Guarantor, as the case may be, with respect to certain taxes, assessments or other governmental charges imposed on certain Holders and that are owing to such Holders.

 

“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 purposes of this definition, “control” of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.

 

“Agent” means any Registrar or Paying Agent.

 

“Bankruptcy Law” means Title 11 of the United States Code or any similar federal, state or foreign law for the relief of debtors.

 

“Board of Directors” means:

 

(1)                                 with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

 

(2)                                 with respect to a partnership, the Board of Directors of the general partner of the partnership;

 

(3)                                 with respect to a limited liability company, the managing member or members or any controlling committee of managers, directors or members

 

1

 

thereof or any board or committee serving a similar management function; and

 

(4)                                 with respect to any other Person, the individual or board or committee of such Person serving a management function similar to those described in clauses (1), (2) or (3) of this definition.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by such Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Business Day” means any day that is not a Legal Holiday.

 

“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person; provided, however, that for purposes of any provision contained herein which is required by the TIA, “Company” shall also mean each other obligor (if any), other than a Guarantor, on the Securities of a series.

 

“Company Order” means a written request or order signed on behalf of the Company by two of its Officers and delivered to the Trustee.

 

“Corporate Trust Office of the Trustee” means the office of the Trustee located at 750 N. Saint Paul Place, Suite 1750, Dallas, Texas 75201, Attention: Corporate, Municipal and Escrow Services, and as may be located at such other address as the Trustee may give notice to the Company and the Guarantors.

 

“Debt” of any Person at any date means any obligation created or assumed by such Person for the repayment of borrowed money or a purchase obligation, or any guarantee thereof.

 

“Default” means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default.

 

“deliver” or “delivery” means, in the context of certificated Securities, actual physical delivery of the certificated Securities to the relevant Person required hereunder, together with all endorsements, and in the context of Global Securities, the designation on the records of the Depositary of a change in the beneficial interests of a holder in a Global Security.

 

“Depositary” means, with respect to the Securities of any series issuable or issued in whole or in part in global form, the Person specified pursuant to Section 2.01 hereof as the initial Depositary with respect to the Securities of such series, until a successor shall have been appointed and become such pursuant to the applicable provision of this Indenture, and thereafter “Depositary” shall mean or include such successor.

 

“Designated Senior Indebtedness” means (i) any Senior Indebtedness which, at the date of determination, has an aggregate principal amount outstanding of, or under which, at

 

2

 

the date of determination, the holders thereof are committed to lend up to, at least $100 million and (ii) any other Senior Indebtedness designated, as provided in Section 2.01, in respect of any series of Securities.

 

“Dollar” or “$” means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debt.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute.

 

“GAAP” means generally accepted accounting principles in the United States 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 may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time.

 

“Global Security” means a Security that is issued in global form in the name of the Depositary with respect thereto or its nominee.

 

“Government Obligations” means, with respect to a series of Securities, direct obligations of the government that issues the currency in which the Securities of the series are payable for the payment of which the full faith and credit of such government is pledged, or obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such government, the payment of which is unconditionally guaranteed as a full faith and credit obligation by such government.

 

“Guarantee” means the guarantee of the Company’s obligations under the Securities of a series by a Guarantor (specified with respect to such series as contemplated by Section 2.01(9)) as provided in Article XI.

 

“Guarantors” means, with respect to any series of Securities, the Person or Persons, if any, named in accordance with Section 2.01(9) as the “Guarantors” (i) in or pursuant to a Board Resolution, and set forth, or determined in the manner provided, in an Officers’ Certificate or in a Company Order, or (ii) in an indenture supplemental hereto establishing the terms of such series of Securities until a successor Person or Persons shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Guarantors” with respect to such series of Securities shall mean such successor Person or Persons, and any Subsidiary of the Company who may execute this Indenture, or a supplement thereto, for the purpose of providing a Guarantee for such series of Securities pursuant to this Indenture.  If a series of Securities does not have any Guarantors, all references in this Indenture to Guarantors shall be ignored with respect to such series of Securities.

 

“Holder” means a Person in whose name a Security is registered.

 

“Indenture” means this Indenture as amended or supplemented from time to time pursuant to the provisions hereof, and includes the terms of a particular series of Securities established as contemplated by Section 2.01.

 

3

 

“interest” means, with respect to an Original Issue Discount Security that by its terms bears interest only after Maturity, interest payable after Maturity.

 

“Interest Payment Date,” when used with respect to any Security, shall have the meaning assigned to such term in the Security as contemplated by Section 2.01.

 

“Issue Date” means, with respect to Securities of a series, the first date on which the Securities of such series are originally issued under this Indenture.

 

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in any of The City of New York, New York or a Place of Payment are authorized or obligated by law, regulation or executive order to remain closed.

 

“Maturity” means, with respect to any Security, the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity thereof, or by declaration of acceleration, call for redemption or otherwise.

 

“Officer” means with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or any Vice President of such Person.

 

“Officers’ Certificate” means a certificate signed on behalf of the Company by any two of its Officers.

 

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee.  Such counsel may be an employee of or counsel to the Company, a Guarantor or the Trustee.

 

“Original Issue Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02.

 

“Person” means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint stock company, trust, unincorporated organization or government or other agency, instrumentality or political subdivision thereof or other entity of any kind.

 

“Place of Payment” means, with respect to the Securities of any series, the place or places where the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of that series are payable as specified in accordance with Section 2.01 subject to the provisions of Section 4.02.

 

“principal” of a Security means the principal of the Security plus, when appropriate, the premium, if any, on the Security.

 

4

 

“Redemption Date” means, with respect to any Security to be redeemed, the date fixed for such redemption by or pursuant to this Indenture.

 

“Redemption Price” means, with respect to any Security to be redeemed, the price at which it is to be redeemed pursuant to this Indenture.

 

“Representative” means the trustee, agent or representative (if any) for an issue of Senior Indebtedness.

 

“Responsible Officer” means 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.

 

“Rule 144A Securities” means Securities of a series designated pursuant to Section 2.01 as entitled to the benefits of Section 4.03(b).

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” has the meaning stated in the preamble of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Security Custodian” means, with respect to Securities of a series issued in global form, the Trustee for Securities of such series, as custodian with respect to the Securities of such series, or any successor entity thereto.

 

“Senior Indebtedness,” unless otherwise provided with respect to the Securities of a series as contemplated by Section 2.01, means, with respect to a series of Securities, (1) all Debt of the Company and, in the case of a related Guarantee, the Guarantors, whether currently outstanding or hereafter issued, unless, by the terms of the instrument creating or evidencing such Debt, it is provided that such Debt is not superior in right of payment to the Securities of such series, in the case of the Company, or the related Guarantees, in the case of the Guarantors, or to other Debt which is pari passu with or subordinated to the Securities of such series, in the case of the Company, or the related Guarantees, in the case of the Guarantors, and (2) any modifications, refunding, deferrals, renewals, or extensions of any such Debt or securities, notes or other evidence of Debt issued in exchange for such Debt; provided that in no event shall “Senior Indebtedness” include (a) Debt evidenced by the Securities of such series or any other series or any related Guarantees, (b) Debt of any of the Guarantors or the Company owed or owing to any Subsidiary of the Company, (c) Debt of any of the Guarantors owed or owing to the Company, (d) Debt to trade creditors or (e) any liability for taxes owed or owing by the Guarantors or the Company.

 

5

 

“Significant Subsidiary” means a Subsidiary of the Company that is a “significant subsidiary” of the Company as such term is defined in Rule 1-02(w) of Regulation S-X as in effect on the date hereof.

 

“Stated Maturity” means, when used with respect to any Security or any installment of principal thereof or interest thereon, the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

 

“Subsidiary” of any Person means:

 

(1)                                 any corporation, association or other business entity of which more than 50% of the total voting power of equity interests entitled, without regard to the occurrence of any contingency, to vote in the election of directors, managers, trustees or equivalent Persons thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or any combination thereof; or

 

(2)                                 a partnership (a) the sole general partner or the managing partner of which is such Person or a Subsidiary of such Person, (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof) or (c) of which more than 50% of the partners’ equity interests, considering all partners’ equity interests as a single class, is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or any combination thereof.

 

“surrender” shall have the same meaning as “deliver” in the context of the surrender of a Security.

 

“TIA” means the Trust Indenture Act of 1939, as amended, as in effect on the date hereof; provided, however, that, in the event the Trust Indenture Act of 1939 is amended after such date, “TIA” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

 

“Trustee” means the Person named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter “Trustee” means each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series means the Trustee with respect to Securities of that series.

 

“United States” means the United States of America (including the States and the District of Columbia) and its territories and possessions, which include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.

 

“U.S. Government Obligations” means Government Obligations with respect to Securities payable in Dollars.

 

6

 

SECTION 1.02                                                              Other Definitions.

 

	
 
    	
 
    	
Defined
    
	
Term
    	
 
    	
in Section
    
	
“Agent Members”
    	
 
    	
2.17
    
	
“Bankruptcy Custodian”
    	
 
    	
6.01
    
	
“Blockage Notes”
    	
 
    	
10.03
    
	
“covenant defeasance”
    	
 
    	
8.01
    
	
“EDGAR”
    	
 
    	
4.03
    
	
“Event of Default”
    	
 
    	
6.01
    
	
“Exchange Rate”
    	
 
    	
2.11
    
	
“Funding Guarantor”
    	
 
    	
11.05
    
	
“Judgment Currency”
    	
 
    	
6.10
    
	
“legal defeasance”
    	
 
    	
8.01
    
	
“mandatory sinking fund payment”
    	
 
    	
3.09
    
	
“optional sinking fund payment”
    	
 
    	
3.09
    
	
“pay the Subordinated Securities”
    	
 
    	
10.03
    
	
“Paying Agent”
    	
 
    	
2.05
    
	
“Payment Blockage Period
    	
 
    	
10.03
    
	
“Registrar”
    	
 
    	
2.05
    
	
“Required Currency”
    	
 
    	
6.10
    
	
“Subordinated Securities
    	
 
    	
10.01
    
	
“Successor”
    	
 
    	
5.01
    

 

SECTION 1.03                                                              Incorporation by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture (and if the Indenture is not qualified under the TIA at that time, as if it were so qualified unless otherwise provided).  The following TIA terms used in this Indenture have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Securities.

 

“indenture security holder” means a Holder.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means the Trustee.

 

“obligor” on the indenture securities means the Company, any Guarantor or any other obligor on the Securities.

 

All terms used in this Indenture that are defined by the TIA, defined by a TIA reference to another statute or defined by an SEC rule under the TIA have the meanings so assigned to them.

 

7

 

SECTION 1.04                                                              Rules of Construction.

 

Unless the context otherwise requires:

 

(1)                                 a term has the meaning assigned to it;

 

(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 in the plural include the singular;

 

(5)                                 provisions apply to successive events and transactions; and

 

(6)                                 all references in this instrument to Articles and Sections are references to the corresponding Articles and Sections in and of this instrument.

 

ARTICLE II
 THE SECURITIES

 

SECTION 2.01                                                              Amount Unlimited; Issuable in Series.

 

The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited.

 

The Securities may be issued in one or more series.  There shall be established in or pursuant to a Board Resolution, and set forth, or determined in the manner provided, in an Officers’ Certificate or in a Company Order, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series:

 

(1)           the title of the Securities of the series (which shall distinguish the Securities of the series from the Securities of all other series);

 

(2)           if there is to be a limit, the limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, 2.09, 2.12, 2.17, 3.07 or 9.05 and except for any Securities which, pursuant to Section 2.04 or 2.17, are deemed never to have been authenticated and delivered hereunder); provided, however, that unless otherwise provided in the terms of the series, the authorized aggregate principal amount of such series may be increased before or after the issuance of any Securities of the series by a Board Resolution (or action pursuant to a Board Resolution) to such effect;

 

(3)           whether any Securities of the series are to be issuable initially in temporary global form and whether any Securities of the series are to be issuable in

 

8

 

permanent global form, as Global Securities or otherwise, and, if so, whether beneficial owners of interests in any such Global Security may exchange such interests for Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 2.17, and the initial Depositary and Security Custodian, if any, for any Global Security or Securities of such series;

 

(4)           the manner in which any interest payable on a temporary Global Security on any Interest Payment Date will be paid if other than in the manner provided in Section 2.14;

 

(5)           the date or dates on which the principal of and premium (if any) on the Securities of the series is payable or the method of determination thereof;

 

(6)           the rate or rates, or the method of determination thereof, at which the Securities of the series shall bear interest, if any, whether and under what circumstances Additional Amounts with respect to such Securities shall be payable, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the record date for the interest payable on any Securities on any Interest Payment Date, or if other than provided herein, the Person to whom any interest on Securities of the series shall be payable;

 

(7)           the place or places where, subject to the provisions of Section 4.02, the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable;

 

(8)           the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, if the Company is to have that option, and the manner in which the Company must exercise any such option, if different from those set forth herein;

 

(9)           whether Securities of the series are entitled to the benefits of any Guarantee of any Guarantor pursuant to this Indenture, the identity of any such Guarantors and any terms of such Guarantee with respect to the Securities of the series in addition to those set forth in Article XI, or any exceptions to or changes to those set forth in Article XI;

 

(10)         the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid in whole or in part pursuant to such obligation;

 

(11)         if other than denominations of $1,000 and any integral multiple thereof, the denomination in which any Securities of that series shall be issuable;

 

9

 

(12)         if other than Dollars, the currency or currencies (including composite currencies) or the form, including equity securities, other debt securities (including Securities), warrants or any other securities or property of the Company, any Guarantor or any other Person, in which payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable;

 

(13)         if the principal of, premium (if any) or interest on or any Additional Amounts with respect to the Securities of the series are to be payable, at the election of the Company or a Holder thereof, in a currency or currencies (including composite currencies) other than that in which the Securities are stated to be payable, the currency or currencies (including composite currencies) in which payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to Securities of such series as to which such election is made shall be payable, and the periods within which and the terms and conditions upon which such election is to be made;

 

(14)         if the amount of payments of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series may be determined with reference to any commodities, currencies or indices, values, rates or prices or any other index or formula, the manner in which such amounts shall be determined;

 

(15)         if other than the entire principal amount thereof, the portion of the principal amount of Securities of the series that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.02;

 

(16)         any additional means of satisfaction and discharge of this Indenture and any additional conditions or limitations to discharge with respect to Securities of the series and the related Guarantees, if any, pursuant to Article VIII or any modifications of or deletions from such conditions or limitations;

 

(17)         any deletions or modifications of or additions to the Events of Default set forth in Section 6.01 or covenants of the Company or any Guarantor set forth in Article IV pertaining to the Securities of the series;

 

(18)         any restrictions or other provisions with respect to the transfer or exchange of Securities of the series, which may amend, supplement, modify or supersede those contained in this Article II;

 

(19)         if the Securities of the series are to be convertible into or exchangeable for capital stock, other debt securities (including Securities), warrants, other equity securities or any other securities or property of the Company, any Guarantor or any other Person, at the option of the Company or the Holder or upon the occurrence of any condition or event, the terms and conditions for such conversion or exchange;

 

(20)         the subordination, if any, of the Securities of the series pursuant to Article X and any changes or additions to Article X or designation of any Designated Senior Indebtedness;

 

10

 

(21)         whether the Securities of the series are to be entitled to the benefit of Section 4.03(b) (and accordingly constitute Rule 144A Securities); and

 

(22)         any other terms of the series (which terms shall not be prohibited by the provisions of this Indenture).

 

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 2.03) set forth, or determined in the manner provided, in the Officers’ Certificate or Company Order referred to above or in any such indenture supplemental hereto.

 

If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action, together with such Board Resolution, shall be set forth in an Officers’ Certificate or certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate or Company Order setting forth the terms of the series.

 

The Securities shall be subordinated in right of payment to Senior Indebtedness as provided in Article X and/or as specified as contemplated pursuant to this Section 2.01.

 

SECTION 2.02                                                              Denominations.

 

The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 2.01.  In the absence of any such provisions with respect to the Securities of any series, the Securities of such series denominated in Dollars shall be issuable in denominations of $1,000 and any integral multiples thereof.

 

SECTION 2.03                                                              Forms Generally.

 

The Securities of each series shall be in fully registered form and in substantially such form or forms (including temporary or permanent global form) established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto.  The Securities may have notations, legends or endorsements required by law, securities exchange rules, the Company’s certificate of incorporation, bylaws or other similar governing documents, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  A copy of the Board Resolution establishing the form or forms of Securities of any series shall be delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 2.04 for the authentication and delivery of such Securities.

 

The definitive Securities of each series shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Officers executing such Securities, as evidenced by their execution thereof.

 

11

 

The Trustee’s certificate of authentication shall be in substantially the following form:

 

“This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

	
 
    	
[                                              ],   as Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory”.
    

 

SECTION 2.04                                                              Execution, Authentication, Delivery and Dating.

 

Two Officers of the Company shall sign the Securities on behalf of the Company and, with respect to any related Guarantees, an Officer of each Guarantor shall sign the Notation of Guarantee on behalf of such Guarantor, in each case by manual or facsimile signature.

 

If an Officer of the Company or a Guarantor whose signature is on a Security no longer holds that office at the time the Security or the Notation of Guarantee, as the case may be, is authenticated, the Security shall be valid nevertheless.

 

A Security shall not be entitled to any benefit under this Indenture or the related Guarantees, if any, or be valid or obligatory for any purpose until authenticated by the manual signature of an authorized signatory of the Trustee, which signature shall be conclusive evidence that the Security has been authenticated under this Indenture.  Notwithstanding the foregoing, if any Security has been authenticated and delivered hereunder but never issued and sold by the Company, and the Company delivers such Security to the Trustee for cancellation as provided in Section 2.13, together with a written statement (which need not comply with Section 12.05 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture or the related Guarantees, if any.

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company (and if applicable, the Notation of Guarantee for such series executed by each Guarantor with respect to such series) to the Trustee for authentication, and the Trustee shall authenticate and deliver such Securities for original issue upon a Company Order for the authentication and delivery of such Securities or pursuant to such procedures acceptable to the Trustee as may be specified from time to time by Company Order.  Such order shall specify the amount of the Securities to be authenticated, the date on which the original issue of Securities is to be authenticated, the name or names of the initial Holder or Holders and any other terms of the Securities of such series not otherwise determined.  If provided for in such procedures, such Company Order may authorize (1) authentication and delivery of Securities of such series for original issue from time to time, with certain terms (including, without limitation, the Maturity date or dates, original issue date or dates and interest rate or rates) that differ from Security to Security and (2) may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent, which instructions shall be promptly confirmed in writing.

 

12

 

If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions as permitted by Section 2.01, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive (in addition to the Company Order referred to above and the other documents required by Section 12.04), and (subject to Section 7.01) shall be fully protected in relying upon:

 

(a)           an Officers’ Certificate setting forth the Board Resolution and, if applicable, an appropriate record of any action taken pursuant thereto, as contemplated by the last paragraph of Section 2.01; and

 

(b)           an Opinion of Counsel substantially to the effect that:

 

(i)            the form of such Securities has been established in conformity with the provisions of this Indenture;

 

(ii)           the terms of such Securities have been established in conformity with the provisions of this Indenture; and

 

(iii)          that when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, such Securities and the related Guarantees, if any, will constitute valid and binding obligations of the Company and the Guarantors, respectively, enforceable against the Company and the Guarantors, respectively, in accordance with their respective terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer or other similar laws in effect from time to time affecting the rights of creditors generally, and the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

If all the Securities of any series are not to be issued at one time, it shall not be necessary to deliver an Officers’ Certificate and Opinion of Counsel at the time of issuance of each such Security, but such Officers’ Certificate and Opinion of Counsel shall be delivered at or before the time of issuance of the first Security of the series to be issued.

 

The Trustee shall not be required to authenticate such Securities if the issuance of such Securities pursuant to this Indenture would affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner not reasonably acceptable to the Trustee.

 

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities.  Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities 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 an Agent to deal with the Company, any Guarantor or any other Affiliate of the Company or any Guarantor.

 

13

 

Each Security shall be dated the date of its authentication.

 

SECTION 2.05                                                              Registrar and Paying Agent.

 

The Company shall maintain an office or agency for each series of Securities where Securities of such series may be presented for registration of transfer or exchange (“Registrar”) and an office or agency where Securities of such series may be presented for payment (“Paying Agent”).  The Registrar shall keep a register of the Securities of such series and of their transfer and exchange.  The Company 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 Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture.  The agreement shall implement the provisions of this Indenture that relate to such Agent.  The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture.  The Company may change any Paying Agent or Registrar without notice to any Holder.  If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such.  The Company, any Guarantor or any Subsidiary may act as Paying Agent or Registrar.

 

The Company initially appoints the Trustee as Registrar and Paying Agent.

 

SECTION 2.06                                                              Paying Agent to Hold Money in Trust.

 

The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or interest on or any Additional Amounts with respect to Securities and will notify the Trustee of any default by the Company 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 and to account for any funds disbursed.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed.  Upon payment over to the Trustee and upon accounting for any funds disbursed, the Paying Agent (if other than the Company, a Guarantor or a Subsidiary of the Company) shall have no further liability for the money.  If the Company, a Guarantor or a Subsidiary of the Company 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.  Each Paying Agent shall otherwise comply with TIA § 317(b).

 

SECTION 2.07                                                              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 Holders and shall otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar with respect to a series of Securities, the Company shall furnish to the Trustee at least five Business Days before each Interest Payment Date with respect to such series of Securities, and at such other times as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of such series, and the Company shall otherwise comply with TIA § 312(a).

 

14

 

SECTION 2.08                                                              Transfer and Exchange.

 

Except as set forth in Section 2.17 or as may be provided pursuant to Section 2.01:

 

When Securities of any series are presented to the Registrar with the request to register the transfer of such Securities or to exchange such Securities for an equal principal amount of Securities of the same series of like tenor and of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements and the requirements of this Indenture for such transactions are met; provided, however, that the Securities presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form reasonably satisfactory to the Registrar duly executed by the Holder thereof or by his attorney, duly authorized in writing, on which instruction the Registrar can rely.

 

To permit registrations of transfers and exchanges, the Company shall execute Securities (and if applicable, each Guarantor with respect to such series shall execute the Notation of Guarantee for such series) and the Trustee shall authenticate such Securities at the Registrar’s written request and submission of the Securities or Global Securities.  No service charge shall be made to a Holder for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than such transfer tax or similar governmental charge payable upon exchanges pursuant to Section 2.12, 3.07 or 9.05). The Trustee shall authenticate such Securities in accordance with the provisions of Section 2.04.  Notwithstanding any other provisions of this Indenture to the contrary, the Company shall not be required to register the transfer or exchange of (a) any Security selected for redemption in whole or in part pursuant to Article III, except the unredeemed portion of any Security being redeemed in part, or (b) any Security during the period beginning 15 Business Days prior to the mailing of notice of any offer to repurchase Securities of the series required pursuant to the terms thereof or of redemption of Securities of a series to be redeemed and ending at the close of business on the day of mailing.

 

SECTION 2.09                                                              Replacement Securities.

 

If any mutilated Security is surrendered to the Trustee, or if the Holder of a Security claims that the Security has been destroyed, lost or stolen and the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of such Security, the Company shall issue, each Guarantor with respect to such series shall execute the Notation of Guarantee relating to such Security, if any, and the Trustee shall authenticate a replacement Security of the same series if the Trustee’s requirements are met.  If any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.  If required by the Trustee, any Guarantor or the Company, such Holder must furnish an indemnity bond that is sufficient in the judgment of the Trustee and the Company to protect the Company, each Guarantor, the Trustee, any Agent or any authenticating agent from any loss that any of them may suffer if a Security is replaced.  The Company and the Trustee may charge a Holder for their expenses in replacing a Security.

 

15

 

Every replacement Security is an additional obligation of the Company.

 

SECTION 2.10                                                              Outstanding Securities.

 

The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Security effected by the Trustee hereunder and those described in this Section 2.10 as not outstanding.

 

If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser.

 

If the principal amount of any Security is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.

 

A Security does not cease to be outstanding because the Company, a Guarantor or an Affiliate of the Company or a Guarantor holds the Security.

 

SECTION 2.11                                                              Original Issue Discount, Foreign-Currency Denominated and Treasury Securities.

 

In determining whether the Holders of the required principal amount of Securities have concurred in any direction, amendment, supplement, waiver or consent, (a) the principal amount of an Original Issue Discount Security shall be the principal amount thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 6.02, (b) the principal amount of a Security denominated in a foreign currency shall be the Dollar equivalent, as determined by the Company by reference to the noon buying rate in The City of New York for cable transfers for such currency, as such rate is certified for customs purposes by the Federal Reserve Bank of New York (the “Exchange Rate”) on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the Dollar equivalent, as determined by the Company by reference to the Exchange Rate on the date of original issuance of such Security, of the amount determined in (a) above), of such Security and (c) Securities owned by the Company, a Guarantor or any other obligor upon the Securities or any Affiliate of the Company, of a Guarantor or of such other obligor shall be disregarded, except that, for the purpose of determining whether the Trustee shall be protected in relying upon any such direction, amendment, supplement, waiver or consent, only Securities that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded.

 

SECTION 2.12                                                              Temporary Securities.

 

Until definitive Securities of any series are ready for delivery, the Company may prepare and execute temporary Securities, each Guarantor with respect to such series shall execute the Notation of Guarantee relating to such Security relating to such temporary Securities, if any, and the Trustee shall authenticate temporary Securities.  Temporary Securities shall be substantially in the form of definitive Securities, but may have variations that the Company considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall

 

16

 

prepare and execute definitive Securities, each Guarantor with respect to such series shall execute the Notation of Guarantee relating to such definitive Security, if any, and the Trustee shall authenticate such definitive Securities in exchange for temporary Securities.  Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.

 

SECTION 2.13                                                              Cancellation.

 

The Company or any Guarantor at any time may deliver Securities to the Trustee for cancellation.  The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange, payment or redemption or for credit against any sinking fund payment.  The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, redemption, replacement or cancellation or for credit against any sinking fund.  Unless the Company shall direct in writing that canceled Securities be returned to it, after written notice to the Company all canceled Securities held by the Trustee shall be disposed of in accordance with the usual disposal procedures of the Trustee, and the Trustee shall maintain a record of their disposal.  The Company may not issue new Securities to replace Securities that have been paid or that have been delivered to the Trustee for cancellation.

 

SECTION 2.14                                                              Payments; Defaulted Interest.

 

Unless otherwise provided as contemplated by Section 2.01, interest (except defaulted interest) on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Persons who are registered Holders of that Security at the close of business on the record date next preceding such Interest Payment Date, even if such Securities are canceled after such record date and on or before such Interest Payment Date.  The Holder must surrender a Security to a Paying Agent to collect principal payments.  Unless otherwise provided with respect to the Securities of any series, the Company will pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities in Dollars.  Such amounts shall be payable at the offices of the Trustee or any Paying Agent, provided that at the option of the Company, the Company may pay such amounts (1) by wire transfer with respect to Global Securities or (2) by check payable in such money mailed to a Holder’s registered address with respect to any Securities.

 

If the Company defaults in a payment of interest on the Securities of any series, the Company shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest on the defaulted interest, in each case at the rate provided in the Securities of such series and in Section 4.01.  The Company may pay the defaulted interest to the Persons who are Holders on a subsequent special record date.  At least 15 days before any special record date selected by the Company, the Company (or the Trustee, in the name of and at the expense of the Company upon 20 days’ prior written notice from the Company setting forth such special record date and the interest amount to be paid) shall mail to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

 

17

 

SECTION 2.15                                                              Persons Deemed Owners.

 

The Company, the Guarantors, the Trustee, any Agent and any authenticating agent may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payments of principal of, premium (if any) or interest on or any Additional Amounts with respect to such Security and for all other purposes.  None of the Company, any Guarantor, the Trustee, any Agent or any authenticating agent shall be affected by any notice to the contrary.

 

SECTION 2.16                                                              Computation of Interest.

 

Except as otherwise specified as contemplated by Section 2.01 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year comprising twelve 30-day months.

 

SECTION 2.17                                                              Global Securities; Book-Entry Provisions.

 

If Securities of a series are issuable in global form as a Global Security, as contemplated by Section 2.01, then, notwithstanding clause (11) of Section 2.01 and the provisions of Section 2.02, any such Global Security shall represent such of the outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of outstanding Securities from time to time endorsed thereon and that the aggregate amount of outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, transfers or redemptions.  Any endorsement of a Global Security to reflect the amount, or any increase or decrease in the amount, of outstanding Securities represented thereby shall be made by the Trustee (i) in such manner and upon instructions given by such Person or Persons as shall be specified in such Security or in a Company Order to be delivered to the Trustee pursuant to Section 2.04 or (ii) otherwise in accordance with written instructions or such other written form of instructions as is customary for the Depositary for such Security, from such Depositary or its nominee on behalf of any Person having a beneficial interest in such Global Security.  Subject to the provisions of Section 2.04 and, if applicable, Section 2.12, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified in such Security or in the applicable Company Order.  With respect to the Securities of any series that are represented by a Global Security, the Company and the Guarantors authorize the execution and delivery by the Trustee of a letter of representations or other similar agreement or instrument in the form customarily provided for by the Depositary appointed with respect to such Global Security.  Any Global Security may be deposited with the Depositary or its nominee, or may remain in the custody of the Trustee or the Security Custodian therefor pursuant to a FAST Balance Certificate Agreement or similar agreement between the Trustee and the Depositary.  If a Company Order has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 12.05 and need not be accompanied by an Opinion of Counsel.

 

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the

 

18

 

Depositary, or the Trustee or the Security Custodian as its custodian, or under such Global Security, and the Depositary may be treated by the Company, any Guarantor, the Trustee or the Security Custodian and any agent of the Company, any Guarantor, the Trustee or the Security Custodian as the absolute owner of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, (i) the registered holder of a Global Security of a series may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action that a Holder of Securities of such series is entitled to take under this Indenture or the Securities of such series and (ii) nothing herein shall prevent the Company, any Guarantor, the Trustee or the Security Custodian, or any agent of the Company, any Guarantor, the Trustee or the Security Custodian, from giving effect to any written certification, proxy or other authorization furnished by the Depositary or shall impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a beneficial owner of any Security.

 

Notwithstanding Section 2.08, and except as otherwise provided pursuant to Section 2.01, transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not in part, to the Depositary, its successors or their respective nominees.  Interests of beneficial owners in a Global Security may be transferred in accordance with the rules and procedures of the Depositary.  Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in a Global Security if, and only if, either (1) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the Global Security and a successor Depositary is not appointed by the Company within 90 days of such notice, (2) an Event of Default has occurred with respect to such series and is continuing and the Registrar has received a request from the Depositary to issue Securities in lieu of all or a portion of the Global Security (in which case the Company shall deliver Securities within 30 days of such request) or (3) the Company in its sole discretion determines not to have the Securities represented by a Global Security.

 

In connection with any transfer of a portion of the beneficial interests in a Global Security to beneficial owners pursuant to this Section 2.17, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interests in the Global Security to be transferred, and the Company shall execute, each Guarantor with respect to such series shall execute the Notation of Guarantee relating to such Global Security, if any, and the Trustee upon receipt of a Company Order for the authentication and delivery of Securities shall authenticate and deliver, one or more Securities of the same series of like tenor and amount.

 

In connection with the transfer of all of the beneficial interests in a Global Security to beneficial owners pursuant to this Section 2.17, the Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, each Guarantor with respect to such series shall execute the Notation of Guarantee relating to such Global Security, if any, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interests in the Global Security, an equal aggregate principal amount of Securities of authorized denominations.

 

None of the Company, any Guarantor or the Trustee will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, Securities

 

19

 

by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such Securities.  None of the Company, any Guarantor or the Trustee shall be liable for any delay by the Holder of the Global Security or the Depositary in identifying the beneficial owners, and each such Person may conclusively rely on, and shall be protected in relying on, instructions from such Holder of the Global Security or the Depositary for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Securities to be issued).

 

The provisions of the last sentence of the third paragraph of Section 2.04 shall apply to any Global Security if such Global Security was never issued and sold by the Company and the Company or a Guarantor delivers to the Trustee the Global Security together with written instructions (which need not comply with Section 12.05 and need not be accompanied by an Opinion of Counsel) with regard to the cancellation or reduction in the principal amount of Securities represented thereby, together with the written statement contemplated by the last sentence of the third paragraph of Section 2.04.

 

Notwithstanding the provisions of Sections 2.03 and 2.14, unless otherwise specified as contemplated by Section 2.01, payment of principal of, premium (if any) and interest on and any Additional Amounts with respect to any Global Security shall be made to the Depositary.

 

The Company in issuing Securities of any series may use CUSIP and corresponding ISIN numbers (if then generally in use), and, if so, the Trustee shall use CUSIP and corresponding ISIN numbers in notices of redemption as a convenience to Holders of Securities of such series; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities of such series or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities of such series, and any such redemption shall not be affected by any defect in or omission of such numbers.  The Company will promptly notify the Trustee in writing of any change in the CUSIP or ISIN numbers.

 

Notwithstanding anything herein to the contrary, delivery or surrender of a Security shall not be required in the case of Global Securities in order to obtain the rights or benefits provided hereunder upon the delivery or surrender of a Security.

 

ARTICLE III
 REDEMPTION

 

SECTION 3.01                                                              Applicability of Article.

 

Securities of any series that are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 2.01 for Securities of any series) in accordance with this Article III.

 

SECTION 3.02                                                              Notice to the Trustee.

 

If the Company elects to redeem Securities of any series pursuant to this Indenture, it shall notify the Trustee of the Redemption Date and the principal amount of

 

20

 

Securities of such series to be redeemed.  The Company shall so notify the Trustee at least 45 days before the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee) by delivering to the Trustee an Officers’ Certificate stating that such redemption will comply with the provisions of this Indenture and of the Securities of such series.  Any such notice may be canceled at any time prior to the mailing of such notice of such redemption to any Holder and shall thereupon be void and of no effect.  A redemption or notice thereof may be subject to one or more conditions.

 

SECTION 3.03                                                              Selection of Securities To Be Redeemed.

 

If less than all of the Securities of any series are to be redeemed (unless all of the Securities of such series of a specified tenor are to be redeemed), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee from the outstanding Securities of such series (and tenor) not previously called for redemption, either pro rata, by lot or by such other method as the Trustee shall deem appropriate in accordance with industry standards at the time of such redemption and that may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series or of the principal amount of Global Securities of such series; provided that, if at the time of redemption such Securities are registered as a Global Security, the Depositary shall determine, in accordance with its procedures, the principal amount of such Securities held by each beneficial owner of Securities to be redeemed.

 

The Trustee shall promptly notify the Company and the Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.

 

For purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities shall relate, in the case of any of the Securities redeemed or to be redeemed only in part, to the portion of the principal amount thereof which has been or is to be redeemed.

 

SECTION 3.04                                                              Notice of Redemption.

 

Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at the address of such Holder appearing in the register of Securities maintained by the Registrar.

 

All notices of redemption shall identify the Securities to be redeemed and shall state:

 

(1)           the Redemption Date;

 

(2)           the Redemption Price (or the method of calculating or determining the Redemption Price);

 

21

 

(3)           that, unless the Company and the Guarantors default in making the redemption payment, interest on Securities called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Securities is to receive payment of the Redemption Price upon surrender to the Paying Agent of the Securities redeemed;

 

(4)           if any Security is to be redeemed in part, the portion of the principal amount thereof to be redeemed and that on and after the Redemption Date, upon surrender for cancellation of such Security to the Paying Agent, a new Security or Securities in the aggregate principal amount equal to the unredeemed portion thereof will be issued without charge to the Holder;

 

(5)           that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price and the name and address of the Paying Agent;

 

(6)           that the redemption is for a sinking or analogous fund, if such is the case;

 

(7)           the CUSIP or ISIN number, if any, relating to such Securities; and

 

(8)           if the redemption or notice thereof is subject to one or more conditions, a statement to such effect and the condition or conditions precedent.

 

Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s written request, by the Trustee in the name and at the expense of the Company; provided, however, that the Company shall have delivered to the Trustee at least 45 days before the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee), as provided in Section 3.02, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the second preceding paragraph.

 

SECTION 3.05                                                              Effect of Notice of Redemption.

 

Once notice of redemption is mailed, unless the redemption or notice is subject to one or more conditions as specified in the notice, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price.  Upon surrender to the Paying Agent, such Securities called for redemption shall be paid at the Redemption Price, but interest installments whose maturity is on or prior to such Redemption Date will be payable on the relevant Interest Payment Dates to the Holders of record at the close of business on the relevant record dates specified pursuant to Section 2.01.

 

SECTION 3.06                                                              Deposit of Redemption Price.

 

By 11:00 a.m., New York City time, on any Redemption Date, the Company or a Guarantor shall deposit with the Trustee or the Paying Agent (or, if the Company or such Guarantor is acting as the Paying Agent, segregate and hold in trust as provided in Section 2.06) an amount of money in same day funds sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on and any Additional Amounts with respect to, the Securities or portions thereof which are to be redeemed on that

 

22

 

date, other than Securities or portions thereof called for redemption on that date which have been delivered by the Company or a Guarantor to the Trustee for cancellation.

 

If the Company or a Guarantor complies with the preceding paragraph, then, unless the Company or the Guarantors default in the payment of such Redemption Price, interest on the Securities to be redeemed will cease to accrue on and after the applicable Redemption Date, whether or not such Securities are presented for payment, and the Holders of such Securities shall have no further rights with respect to such Securities except for the right to receive the Redemption Price upon surrender of such Securities.  If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal, premium, if any, any Additional Amounts, and, to the extent lawful, accrued interest thereon shall, until paid, bear interest from the Redemption Date at the rate specified pursuant to Section 2.01 or provided in the Securities or, in the case of Original Issue Discount Securities, such Securities’ yield to maturity.

 

SECTION 3.07                                                              Securities Redeemed in Part.

 

Upon surrender to the Paying Agent of a Security to be redeemed in part, the Company shall execute, each Guarantor with respect to such series shall execute the Notation of Guarantee relating to such Security, if any, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge a new Security or Securities, of the same series and of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the unredeemed portion of the principal of the Security so surrendered that is not redeemed.

 

SECTION 3.08                                                              Purchase of Securities.

 

Unless otherwise specified as contemplated by Section 2.01, the Company, any Guarantor or any Affiliate of the Company or any Guarantor may, subject to applicable law, at any time purchase or otherwise acquire Securities in the open market or by private agreement.  Any such acquisition shall not operate as or be deemed for any purpose to be a redemption of the indebtedness represented by such Securities.  Any Securities purchased or acquired by the Company or a Guarantor may be delivered to the Trustee and, upon such delivery, the indebtedness represented thereby shall be deemed to be satisfied.  Section 2.13 shall apply to all Securities so delivered.

 

SECTION 3.09                                                              Mandatory and Optional Sinking Funds.

 

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment.”  Unless otherwise provided by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.10.  Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series and by this Article III.

 

23

 

SECTION 3.10                                                              Satisfaction of Sinking Fund Payments with Securities.

 

The Company or a Guarantor may deliver outstanding Securities of a series (other than any previously called for redemption) and may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such series of Securities; provided that such Securities have not been previously so credited.  Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

SECTION 3.11                                                              Redemption of Securities for Sinking Fund.

 

Not less than 45 days prior (unless a shorter period shall be satisfactory to the Trustee) to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivery of or by crediting Securities of that series pursuant to Section 3.10 and will also deliver or cause to be delivered to the Trustee any Securities to be so delivered.  Failure of the Company to timely deliver or cause to be delivered such Officers’ Certificate and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute the election of the Company (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof and (ii) that the Company will make no optional sinking fund payment with respect to such series as provided in this Section 3.11.

 

If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $100,000 (or the Dollar equivalent thereof based on the applicable Exchange Rate on the date of original issue of the applicable Securities) or a lesser sum if the Company shall so request with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for redemption.  If such amount shall be $100,000 (or the Dollar equivalent thereof as aforesaid) or less and the Company makes no such request then it shall be carried over until a sum in excess of $100,000 (or the Dollar equivalent thereof as aforesaid) is available.  Not less than 30 days before each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.03 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.04.  Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 3.05, 3.06 and 3.07.

 

24

 

ARTICLE IV
 COVENANTS

 

SECTION 4.01                                                              Payment of Securities.

 

The Company shall pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of each series on the dates and in the manner provided in the Securities of such series and in this Indenture.  Principal, premium, interest and any Additional Amounts shall be considered paid on the date due if the Paying Agent (other than the Company, a Guarantor or a Subsidiary) holds by 11:00 a.m., New York City time, on that date money deposited by the Company or a Guarantor designated for and sufficient to pay all principal, premium, interest and any Additional Amounts then due.

 

The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium (if any), at a rate equal to the then applicable interest rate on the Securities to the extent lawful; and it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and any Additional Amount (without regard to any applicable grace period) at the same rate to the extent lawful.

 

SECTION 4.02                                                              Maintenance of Office or Agency.

 

The Company will maintain in each Place of Payment for any series of Securities an office or agency (which may be an office of the Trustee, the Registrar or the Paying Agent) where Securities of that series may be presented for registration of transfer or exchange, where Securities of that series may be presented for payment and where notices and demands to or upon the Company or a Guarantor in respect of the Securities of that series and this Indenture may be served. Unless otherwise designated by the Company by written notice to the Trustee and the Guarantors, such office or agency shall be the office of the Trustee in The City of New York, which on the date hereof is located at 150 East 42nd Street, New York, New York 10017.  The Company will give prompt written notice to the Trustee and the Guarantors of the location, and any change in the location, of such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee and the Guarantors with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

 

The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes.  The Company will 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.

 

SECTION 4.03                                                              SEC Reports; Financial Statements.

 

(a)           If the Company is subject to the requirements of Section 13 or 15(d) of the Exchange Act, the Company shall, so long as any of the Securities are outstanding, file with the

 

25

 

Trustee, within 15 days after it files the same with the SEC, copies of the annual reports and the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.  If this Indenture is qualified under the TIA, but not otherwise, the Company shall also comply with the provisions of TIA § 314(a).  Delivery of such reports, information and documents to the Trustee shall be for informational purposes only, and the Trustee’s receipt thereof shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s and the Guarantors’ compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates or certificates delivered pursuant to Section 4.04)

 

(b)           If the Company is not subject to the requirements of Section 13 or 15(d) of the Exchange Act, the Company shall furnish to all Holders of Rule 144A Securities and prospective purchasers of Rule 144A Securities designated by the Holders of Rule 144A Securities, promptly upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) promulgated under the Securities Act of 1933, as amended.

 

(c)           The Company intends to file the reports, information and documents referred to in Section 4.03(a) hereof with the SEC in electronic form pursuant to Regulation S-T promulgated by the SEC using the SEC’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system.  The Company shall notify the Trustee in the manner prescribed herein of each such filing.  The Trustee is hereby authorized and directed to access the EDGAR system for purposes of retrieving the reports so filed.  Compliance with the foregoing shall constitute delivery by the Company of such reports to the Trustee in compliance with the provisions of TIA § 314(a).  The Trustee shall have no duty to search for or obtain any electronic or other filings that the Company makes with the SEC, regardless of whether such filings are periodic, supplemental or otherwise.  Delivery of the reports, information and documents to the Trustee pursuant to this Section 4.03 shall be solely for the purposes of compliance with this Section 4.03 and with TIA § 314(a).  The Trustee’s receipt of such reports, information and documents shall not constitute notice to it of the content thereof or of any matter determinable from the content thereof, including the Company’s and any Guarantor’s compliance with any of their covenants hereunder, as to which the Trustee is entitled to rely upon Officers’ Certificates.

 

SECTION 4.04                                                              Compliance Certificate.

 

(a)           The Company shall, so long as any of the Securities are outstanding, deliver to the Trustee, within 120 days after the end of each fiscal year of the Company a statement signed by an Officer of the Company, which need not constitute an Officers’ Certificate, complying with TIA § 314(a)(4) and stating that in the course of performance by the signing Officer of his duties as such Officer of the Company, he would normally obtain knowledge of the keeping, observing, performing and fulfilling by the Company and any Guarantor of its obligations under this Indenture, and further stating that to the best of his knowledge the Company and any Guarantor has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which such Officer may have

 

26

 

knowledge and what action the Company and any Guarantor is taking or proposes to take with respect thereto).

 

(b)           The Company shall, so long as Securities of any series are outstanding, deliver to the Trustee, as soon as practicable, but in no event more than five Business Days, after any Officer of the Company becoming aware of any Default or Event of Default under this Indenture, an Officers’ Certificate specifying such Default or Event of Default and what action the Company and any Guarantor is taking or proposes to take with respect thereto.

 

SECTION 4.05                                                              Existence.

 

Subject to Article V, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence.  This Section 4.05 shall not prohibit or restrict the Company from converting into a different form of legal entity.

 

SECTION 4.06                                                              Waiver of Stay, Extension or Usury Laws.

 

The Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive it from paying all or any portion of the principal of or interest on the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) the Company and each of the Guarantors hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

SECTION 4.07                                                              Additional Amounts.

 

If the Securities of a series expressly provide for the payment of Additional Amounts, the Company will pay to the Holder of any Security of such series Additional Amounts as expressly provided therein.  Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series or the net proceeds received from the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section 4.07 to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section 4.07 and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made.

 

27

 

ARTICLE V
 SUCCESSORS

 

SECTION 5.01                                                              Limitations on Mergers and Consolidations.

 

Neither the Company nor any Guarantor shall consolidate with or merge into any Person, or sell, lease, convey, assign, transfer or otherwise dispose of, in any transaction or series of transactions, all or substantially all of its assets to any Person (other than a consolidation or merger of the Company and one or more Guarantors or two or more Guarantors, or a sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the assets of the Company to a Guarantor, a Guarantor to the Company or of a Guarantor to another Guarantor), unless:

 

(1)           either (a) the Company or such Guarantor, as the case may be, shall be the continuing Person or (b) the Person (if other than the Company or such Guarantor) formed by such consolidation or into which the Company or such Guarantor is merged, or to which such sale, lease, conveyance, assignment, transfer or other disposition shall be made (collectively, the “Successor”), is organized and validly existing under the laws of the United States, any political subdivision thereof or any State thereof or the District of Columbia, and expressly assumes by supplemental indenture, in the case of the Company, the due and punctual payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to all the Securities and the performance of the Company’s covenants and obligations under this Indenture and the Securities, or, in the case of such Guarantor, the performance of the Guarantee and such Guarantor’s covenants and obligations under this Indenture and the Securities;

 

(2)           immediately after giving effect to such transaction or series of transactions, no Default or Event of Default shall have occurred and be continuing or would result therefrom; and

 

(3)           the Company or such Guarantor, as the case may be, shall have delivered, or cause to be delivered, to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, lease, conveyance, assignment, transfer or other disposition complies with the requirements of this Indenture, and an Opinion of Counsel stating that the Securities, the Indenture and the Guarantees constitute valid and binding obligations of the Company (or, if applicable, the successor company) and such Guarantors.

 

SECTION 5.02                                                              Successor Person Substituted.

 

Upon any consolidation or merger of the Company or a Guarantor, as the case may be, or any sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the assets of the Company or such Guarantor in accordance with Section 5.01, the Successor formed by such consolidation or into or with which the Company or such Guarantor is merged or to which such sale, lease, conveyance, assignment, transfer or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of the Company or such Guarantor, as the case may be, under this Indenture and the

 

28

 

Securities with the same effect as if such Successor had been named as the Company or such Guarantor, as the case may be, herein and the predecessor Company or Guarantor, in the case of a sale, conveyance, assignment, transfer or other disposition, shall be released from all obligations under this Indenture, the Securities and, in the case of a Guarantor, its Guarantee.

 

ARTICLE VI
 DEFAULTS AND REMEDIES

 

SECTION 6.01                                                              Events of Default.

 

Unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the supplemental indenture or Board Resolution establishing such series of Securities or in the form of Security for such series, an “Event of Default,” wherever used herein with respect to Securities of any series, occurs if:

 

(1)           the Company defaults in the payment of interest on or any Additional Amounts with respect to any Security of that series when the same becomes due and payable and such default continues for a period of 30 days;

 

(2)           the Company defaults in the payment of the principal of or premium, if any, on any Securities of that series as and when the same shall become due and payable, whether at Stated Maturity, upon redemption, by declaration, upon required repurchase or otherwise;

 

(3)           the Company defaults in the deposit of any sinking fund payment with respect to any Securities of that series as and when the same shall become due and payable, and such default continues for a period of 30 days;

 

(4)           the Company fails to comply with any of its other covenants or agreements in, or provisions of, the Securities of such series or this Indenture (other than an agreement, covenant or provision that has expressly been included in this Indenture solely for the benefit of one or more series of Securities other than that series) which shall not have been remedied within the specified period after written notice, as specified in the last paragraph of this Section 6.01;

 

(5)           the Company, or if that series of Securities is entitled to the benefits of a Guarantee by any Guarantor that is a Significant Subsidiary, any such Guarantor, pursuant to or within the meaning of any Bankruptcy Law:

 

(A)          commences a voluntary case,

 

(B)          consents to the entry of an order for relief against it in an involuntary case,

 

(C)          consents to the appointment of a Bankruptcy Custodian of it or for all or substantially all of its property, or

 

(D)          makes a general assignment for the benefit of its creditors;

 

29

 

(6)           a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that remains unstayed and in effect for 90 days and that:

 

(A)          is for relief against the Company or any Guarantor with respect to such series that is a Significant Subsidiary as debtor in an involuntary case,

 

(B)          appoints a Bankruptcy Custodian of the Company or any Guarantor with respect to such series that is a Significant Subsidiary or a Bankruptcy Custodian for all or substantially all of the property of the Company or any Guarantor with respect to such series that is a Significant Subsidiary, or

 

(C)          orders the liquidation of the Company or any Guarantor with respect to such series that is a Significant Subsidiary;

 

(7)           if that series of Securities is entitled to the benefits of a Guarantee by the Guarantors, the Guarantee of any of such Guarantors ceases to be in full force and effect with respect to Securities of that series (except as otherwise provided in this Indenture) or is declared null and void in a judicial proceeding, or any such Guarantor denies or disaffirms its obligations under this Indenture or such Guarantee; or

 

(8)           any other Event of Default provided with respect to Securities of that series occurs.

 

The term “Bankruptcy Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

The Trustee shall not be deemed to know or have notice 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 or Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture.

 

When a Default or Event of Default is cured, it ceases.

 

Notwithstanding the foregoing provisions of this Section 6.01, if the principal of, premium (if any) or interest on or Additional Amounts with respect to any Security is payable in a currency or currencies (including a composite currency) other than Dollars and such currency or currencies are not available to the Company or a Guarantor for making payment thereof due to the imposition of exchange controls or other circumstances beyond the control of the Company or a Guarantor, the Company will be entitled to satisfy its obligations to Holders of the Securities by making such payment in Dollars in an amount equal to the Dollar equivalent of the amount payable in such other currency, as determined by the Company or the Guarantor, as the case may be, by reference to the Exchange Rate on the date of such payment, or, if such rate is not then available, on the basis of the most recently available Exchange Rate. Notwithstanding the foregoing provisions of this Section 6.01, any payment made under such circumstances in Dollars where the required payment is in a currency other than Dollars will not constitute an Event of Default under this Indenture.

 

30

 

A Default under clause (4) or (8) of this Section 6.01 is not an Event of Default until the Trustee notifies the Company and the Guarantors, or the Holders of at least 25% in principal amount of the then outstanding Securities of the series affected by such Default (or, in the case of a Default under clause (4) of this Section 6.01, if outstanding Securities of other series are affected by such Default, then at least 25% in principal amount of the then outstanding Securities so affected) notify the Company, the Guarantors and the Trustee, of the Default, and the Company or the applicable Guarantor, as the case may be, fails to cure the Default within 90 days after receipt of the notice.  The notice must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default.”

 

SECTION 6.02                                                              Acceleration.

 

If an Event of Default with respect to any Securities of any series at the time outstanding (other than an Event of Default specified in clause (5) or (6) of Section 6.01) occurs and is continuing, the Trustee by notice to the Company and the Guarantors, or the Holders of at least 25% in principal amount of the then outstanding Securities of the series affected by such Event of Default (or, in the case of an Event of Default described in clause (4) of Section 6.01, if outstanding Securities of other series are affected by such Event of Default, then at least 25% in principal amount of the then outstanding Securities so affected) by notice to the Company, the Guarantors and the Trustee, may declare the principal of (or, if any such Securities are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) and all accrued and unpaid interest on all then outstanding Securities of such series or of all series, as the case may be, to be due and payable.  Upon any such declaration, the amounts due and payable on the Securities shall be due and payable immediately.  If an Event of Default specified in clause (5) or (6) of Section 6.01 hereof occurs, such amounts shall ipso facto become and be immediately due and payable without any declaration, notice or other act on the part of the Trustee or any Holder.  The Holders of a majority in principal amount of the then outstanding Securities of the series affected by such Event of Default or all series so affected, as the case may be, by written notice to the Trustee may rescind an acceleration and its consequences (other than nonpayment of principal of or premium or interest on or any Additional Amounts with respect to the Securities) if the rescission would not conflict with any judgment or decree and if all existing Events of Default with respect to Securities of that series (or of all series, as the case may be) have been cured or waived, except nonpayment of principal, premium, interest or any Additional Amounts that has become due solely because of the acceleration.

 

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, or premium, if any, or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Holder 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.

 

31

 

SECTION 6.04                                                              Waiver of Defaults.

 

Subject to Sections 6.07 and 9.02, the Holders of a majority in principal amount of the then outstanding Securities of any series or of all series affected thereby (acting as one class) by notice to the Trustee may waive an existing or past Default or Event of Default with respect to such series or all series so affected, as the case may be, and its consequences (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or all series so affected or a solicitation of consents in respect of Securities of such series or all series so affected, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series or all series so affected (but the terms of such offer or solicitation may vary from series to series)), except (1) a continuing Default or Event of Default in the payment of the principal of, or premium, if any, or interest on or any Additional Amounts with respect to any Security or (2) a continued Default in respect of a provision that under Section 9.02 cannot be amended or supplemented without the consent of each Holder affected.  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.

 

With respect to Securities of any series, the Holders of a majority in principal amount of the then outstanding Securities of such series may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it relating to or arising under an Event of Default described in clause (1), (2), (3) or (8) of Section 6.01, and with respect to all Securities, the Holders of a majority in principal amount of all the then outstanding Securities affected may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it not relating to or arising under such an Event of Default.  However, the Trustee may refuse to follow any direction that conflicts with applicable law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Holders, or that may involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.  Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion from Holders directing the Trustee against all losses and expenses caused by taking or not taking such action.

 

SECTION 6.06                                                              Limitations on Suits.

 

Subject to Section 6.07 hereof, a Holder of a Security of any series may pursue a remedy with respect to this Indenture or the Securities of such series or the related Guarantees, if any, only if:

 

(1)           the Holder gives to the Trustee written notice of a continuing Event of Default with respect to such series;

 

32

 

(2)           the Holders of at least 25% in principal amount of the then outstanding Securities of such series make a written request to the Trustee to pursue the remedy;

 

(3)           such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense;

 

(4)           the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and

 

(5)           during such 60-day period, the Holders of a majority in principal amount of the Securities of such series do not give the Trustee a direction inconsistent with the request.

 

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 any such use by a Holder prejudices the rights of any other Holder or obtains preference or priority over such other Holder).

 

SECTION 6.07                                                              Rights of Holders to Receive Payment.

 

Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal of and premium, if any, and interest on and any Additional Amounts with respect to the Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder.

 

SECTION 6.08                                                              Collection Suit by Trustee.

 

If an Event of Default specified in clause (1) or (2) of Section 6.01 hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company or a Guarantor for the amount of principal, premium (if any), interest and any Additional Amounts remaining unpaid on the Securities of the series affected by the Event of Default, and interest on overdue principal and premium, if any, and, to the extent lawful, interest on overdue 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, its agents and counsel.

 

SECTION 6.09                                                              Trustee May File Proofs of Claim.

 

The Trustee is authorized to file such proofs of claim and other papers or documents and to take such actions, including participating as a member, voting or otherwise, of any committee of creditors, as may be necessary or advisable to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company or a Guarantor or their respective creditors or properties and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any Bankruptcy Custodian in any such judicial proceeding is hereby

 

33

 

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 reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee 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 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 which the Holders of the Securities 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 Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

SECTION 6.10                                                              Priorities.

 

If the Trustee collects any money pursuant to this Article VI, subject to Article X, it shall pay out the money in the following order:

 

First:  to the Trustee for amounts due under Section 7.07;

 

Second:  to Holders for amounts due and unpaid on the Securities in respect of which or for the benefit of which such money has been collected, for principal, premium (if any), interest and any Additional Amounts ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium (if any), interest and any Additional Amounts, respectively; and

 

Third:  to the Company.

 

The Trustee, upon prior written notice to the Company, may fix record dates and payment dates for any payment to Holders pursuant to this Article VI.

 

To the fullest extent allowed under applicable law, if for the purpose of obtaining a judgment against the Company or a Guarantor in any court it is necessary to convert the sum due in respect of the principal of, premium (if any) or interest on or Additional Amounts with respect to the Securities of any series (the “Required Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used for purposes of rendering the judgment shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the Business Day in The City of New York next preceding that on which final judgment is given.  None of the Company, any Guarantor or the Trustee shall be liable for any shortfall nor shall it benefit from any windfall in payments to Holders of Securities under this Section 6.10 caused by a change in exchange rates between the time the amount of a judgment against it is calculated as above and the time the Trustee converts the Judgment Currency into the Required Currency to make payments under this Section 6.10 to Holders of Securities, but

 

34

 

payment of such judgment shall discharge all amounts owed by the Company and the Guarantors on the claim or claims underlying such judgment.

 

SECTION 6.11                                                              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 the 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, 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 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in principal amount of the then outstanding Securities of any series.

 

ARTICLE VII
 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 such 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 with respect to the Securities of any series:

 

(1)           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

 

(2)           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, the Trustee shall examine such certificates and opinions to determine whether, on their face, they appear to conform to the requirements of this Indenture.

 

(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:

 

(1)           this paragraph does not limit the effect of Section 7.01(b);

 

(2)           the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

35

 

(3)           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 the provisions of this Section 7.01.

 

(e)           No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability.  The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity 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 Company and the Guarantors.  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.  All money received by the Trustee shall, until applied as herein provided, be held in trust for the payment of the principal of, premium (if any) and interest on and Additional Amounts with respect to the Securities.

 

SECTION 7.02                                                              Rights of Trustee.

 

(a)           The Trustee may conclusively rely on 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.

 

(b)           Before the Trustee acts or refrains from acting, it may require instruction, an Officers’ Certificate or an Opinion of Counsel or both to be provided.  The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such instruction, Officers’ Certificate or Opinion of Counsel.  The Trustee may consult at the Company’s expense with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection 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 agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d)           The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its 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 Company or any Guarantor shall be sufficient if signed by an Officer of the Company or such Guarantor, as the case may be.

 

(f)             The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

 

36

 

(g)           The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

 

(h)           The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

 

(i)            The Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture.

 

(j)            In no event shall the Trustee be responsible or liable for special, indirect, punitive 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.

 

(k)           The Trustee shall not be deemed to have notice 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 Securities and this Indenture.

 

(l)            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 Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

 

(m)          The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

 

SECTION 7.03                                                              May Hold Securities.

 

The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company, any Guarantor or any of their respective Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights and duties.  However, the Trustee is subject to Sections 7.10 and 7.11.

 

37

 

SECTION 7.04                                                              Trustee’s Disclaimer.

 

The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities or any money paid to the Company or any Guarantor or upon the Company’s or such Guarantor’s direction under any provision hereof, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee and it shall not be responsible for any statement or recital herein or any statement in the Securities other than its certificate of authentication.

 

SECTION 7.05                                                              Notice of Defaults.

 

If a Default or Event of Default with respect to the Securities of any series occurs and is continuing and it is known to the Trustee, the Trustee shall mail to Holders of Securities of such series a notice of the Default or Event of Default within 90 days after it occurs.  Except in the case of a Default or Event of Default in payment of principal of, premium (if any) and interest on and Additional Amounts or any sinking fund installment with respect to the Securities of such series, the Trustee may withhold the notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determines that withholding the notice is in the interests of Holders of Securities of such series.

 

SECTION 7.06                                                              Reports by Trustee to Holders.

 

Within 60 days after each                of each year after the execution of this Indenture, the Trustee shall mail to Holders of a series, the Guarantors and the Company a brief report dated as of such reporting date that complies with TIA § 313(a); provided, however, that if no event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date with respect to a series, no report need be transmitted to Holders of such series.  The Trustee also shall comply with TIA § 313(b).  The Trustee shall also transmit by mail all reports if and as required by TIA §§ 313(c) and 313(d).

 

A copy of each report at the time of its mailing to Holders of a series of Securities shall be filed by the Company or a Guarantor with the SEC and each securities exchange, if any, on which the Securities of such series are listed. The Company shall notify the Trustee if and when any series of Securities is listed on any securities exchange.

 

SECTION 7.07                                                              Compensation and Indemnity.

 

The Company agrees to pay to the Trustee for its acceptance of this Indenture and services hereunder such compensation as the Company and the Trustee shall from time to time agree in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Company agrees to reimburse the Trustee upon request for all reasonable disbursements, advances and expenses incurred by it.  Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

The Company hereby indemnifies the Trustee and any predecessor Trustee against any and all loss, liability, damage, claim or expense, including taxes (other than taxes

 

38

 

based upon, measured by or determined by the income of the Trustee), incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, except as set forth in the next following paragraph.  The Trustee shall notify the Company and the Guarantors promptly of any claim for which it may seek indemnity.  The Company shall defend the claim and the Trustee shall cooperate in the defense.  The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel.  The Company need not pay for any settlement made without its consent.

 

The Company shall not be obligated to reimburse any expense or indemnify against any loss or liability incurred by the Trustee through the Trustee’s negligence, willful misconduct or bad faith.

 

To secure the payment obligations of the Company in this Section 7.07, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of, premium (if any) and interest on and any Additional Amounts with respect to Securities of any series.  Such lien and the Company’s obligations under this Section 7.07 shall survive the satisfaction and discharge of this Indenture.

 

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(5) or (6) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.

 

SECTION 7.08                                                              Replacement of Trustee.

 

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

The Trustee may resign and be discharged at any time with respect to the Securities of one or more series by so notifying the Company and the Guarantors.  The Holders of a majority in principal amount of the then outstanding Securities of any series may remove the Trustee with respect to the Securities of such series by so notifying the Trustee, the Company and the Guarantors.  The Company may remove the Trustee if:

 

(1)           the Trustee fails to comply with Section 7.10;

 

(2)           the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

(3)           a Bankruptcy Custodian or public officer takes charge of the Trustee or its property; or

 

(4)           the Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, with respect to the Securities of one or more series, the Company shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities

 

39

 

of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series).  Within one year after the successor Trustee with respect to the Securities of any series takes office, the Holders of a majority in principal amount of the Securities of such series then outstanding may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

 

If a successor Trustee with respect to the Securities of any series does not take office within 30 days after the retiring or removed Trustee resigns or is removed, the retiring or removed Trustee, the Company, any Guarantor or the Holders of at least 10% in principal amount of the then outstanding Securities of such series may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

If the Trustee with respect to the Securities of a series fails to comply with Section 7.10, any Holder of Securities of such series may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee with respect to the Securities of such series.

 

In case of the appointment of a successor Trustee with respect to all Securities, each such successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee, to the Company and to the Guarantors.  Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the retiring Trustee under this Indenture.  The successor Trustee shall mail a notice of its succession to Holders.  The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.

 

In case of the appointment of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the Guarantors, the retiring Trustee and each successor Trustee with respect to the Securities of one or more (but not all) series shall execute and deliver an indenture supplemental hereto in which each successor Trustee shall accept such appointment and that (1) shall confer to each successor Trustee all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall confirm that all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee.  Nothing herein or in such supplemental indenture shall constitute such Trustees as co-trustees of the same trust, and each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee.  Upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee shall have all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.  On request of the Company or any successor Trustee, such retiring Trustee shall transfer to such successor Trustee all property held by such retiring Trustee

 

40

 

as Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

 

Notwithstanding replacement of the Trustee or Trustees pursuant to this Section 7.08, the obligations of the Company under Section 7.07 shall continue for the benefit of the retiring Trustee or Trustees.

 

SECTION 7.09                                                              Successor Trustee by Merger, etc.

 

Subject to Section 7.10, if the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee; provided, however, that in the case of a transfer of all or substantially all of its corporate trust business to another corporation, the transferee corporation expressly assumes all of the Trustee’s liabilities hereunder.

 

In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.

 

SECTION 7.10                                                              Eligibility; Disqualification.

 

There shall at all times be a Trustee hereunder which shall be a corporation or banking or trust company or association organized and doing business under the laws of the United States, any State thereof or the District of Columbia and authorized under such laws to exercise corporate trust power, shall be subject to supervision or examination by federal or state (or the District of Columbia) authority and shall have, or be a subsidiary of a bank or bank holding company having, a combined capital and surplus of at least $50 million as set forth in its most recent published annual report of condition.

 

The Indenture shall always have a Trustee who satisfies the requirements of TIA §§ 310(a)(1), 310(a)(2) and 310(a)(5).  The Trustee is subject to and shall comply with the provisions of TIA § 310(b) during the period of time required by this Indenture. Nothing in this Indenture shall prevent the Trustee from filing with the SEC the application referred to in the penultimate paragraph of TIA § 310(b).

 

SECTION 7.11                                                              Preferential Collection of Claims Against the Company or a Guarantor.

 

The Trustee is subject to and shall comply with the provisions of TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

 

41

 

ARTICLE VIII
 DISCHARGE OF INDENTURE

 

SECTION 8.01                                                              Termination of the Company’s and the Guarantors’ Obligations.

 

(a)           This Indenture shall cease to be of further effect with respect to the Securities of a series (except that the Company’s obligations under Section 7.07, the Trustee’s and Paying Agent’s obligations under Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging the satisfaction and discharge of this Indenture with respect to the Securities of such series, when:

 

(1)           either:

 

(A)          all outstanding Securities of such series theretofore authenticated and issued (other than destroyed, lost or stolen Securities that have been replaced or paid) have been delivered to the Trustee for cancellation; or

 

(B)          all outstanding Securities of such series not theretofore delivered to the Trustee for cancellation:

 

(i)                                     have become due and payable, or

 

(ii)                                  will become due and payable at their Stated Maturity within one year, or

 

(iii)                               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 Company,

 

and, in the case of clause (i), (ii) or (iii) above, the Company or a Guarantor has irrevocably deposited or caused to be deposited with the Trustee as funds (immediately available to the Holders in the case of clause (i)) in trust for such purpose (x) cash in an amount, or (y) Government Obligations with respect to such series, maturing as to principal and interest at such times and in such amounts as will ensure the availability of cash in an amount or (z) a combination thereof, which will be sufficient, in the opinion (in the case of clauses (y) and (z)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the entire indebtedness on the Securities of such series for principal and interest to the date of such deposit (in the case of Securities which have become due and payable) or for principal, premium, if any, and interest to the Stated Maturity or Redemption Date, as the case may be; or

 

(C)          the Company and the Guarantors have properly fulfilled such other means of satisfaction and discharge as is specified, as contemplated by Section 2.01, to be applicable to the Securities of such series;

 

42

 

(2)           the Company or a Guarantor has paid or caused to be paid all other sums payable by them hereunder with respect to the Securities of such series; and

 

(3)           the Company has delivered to the Trustee an Officers’ Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect.

 

(b)           Unless this Section 8.01(b) is specified as not being applicable to Securities of a series as contemplated by Section 2.01, the Company may, at its option, terminate certain of their and the Guarantors’ respective obligations under this Indenture (“covenant defeasance”) with respect to the Securities of a series if:

 

(1)           the Company or a Guarantor has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of Securities of such series, (i) money in the currency in which payment of the Securities of such series is to be made in an amount, or (ii) Government Obligations with respect to such series, maturing as to principal and interest at such times and in such amounts as will ensure the availability of money in the currency in which payment of the Securities of such series is to be made in an amount or (iii) a combination thereof, that is sufficient, in the opinion (in the case of clauses (ii) and (iii)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay the principal of and premium (if any) and interest on all Securities of such series on each date that such principal, premium (if any) or interest is due and payable and (at the Stated Maturity thereof or upon redemption as provided in Section 8.01(e)) to pay all other sums payable by it hereunder; provided that the Trustee shall have been irrevocably instructed to apply such money and/or the proceeds of such Government Obligations to the payment of said principal, premium (if any) and interest with respect to the Securities of such series as the same shall become due;

 

(2)           the Company has delivered to the Trustee an Officers’ Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, and an Opinion of Counsel to the same effect;

 

(3)           no Default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit;

 

(4)           the Company shall have delivered to the Trustee an Opinion of Counsel from a nationally recognized counsel acceptable to the Trustee or a private letter ruling issued by the United States Internal Revenue Service to the effect that the Holders will not recognize income, gain or loss for United States Federal income tax purposes as a result of the Company’s exercise of its option under this Section 8.01(b) and will be subject to United States Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised;

 

43

 

(5)           the Company and the Guarantors have complied with any additional conditions specified pursuant to Section 2.01 to be applicable to the discharge of Securities of such series pursuant to this Section 8.01; and

 

(6)           such deposit and discharge shall not cause the Trustee to have a conflicting interest as defined in TIA § 310(b).

 

In such event, (1) this Indenture shall cease to be of further effect (except as set forth in this paragraph), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging satisfaction and discharge under this Indenture and (2) the Guarantee with respect to the Securities, if any, will automatically terminate and be automatically released and discharged, and any Security that may have been granted in respect of such series shall be automatically released.  However, the Company’s obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 7.07, 7.08, 8.04 and 10.01, the Trustee’s and Paying Agent’s obligations in Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive until all Securities of such series are no longer outstanding.  Thereafter, only the Company’s obligations in Section 7.07 and the Trustee’s and Paying Agent’s obligations in Section 8.03 shall survive with respect to Securities of such series.

 

After such irrevocable deposit made pursuant to this Section 8.01(b) and satisfaction of the other conditions set forth herein, the Trustee upon request shall acknowledge in writing the discharge of the Company’s and the Guarantors’ obligations under this Indenture with respect to the Securities of such series except for those surviving obligations specified above.

 

In order to have money available on a payment date to pay principal of or premium (if any) or interest on the Securities, the Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money.  Government Obligations shall not be callable at the Company’s option.

 

(c)           If the Company and the Guarantors have previously complied or are concurrently complying with Section 8.01(b) (other than any additional conditions specified pursuant to Section 2.01 that are expressly applicable only to covenant defeasance) with respect to Securities of a series, then, unless this Section 8.01(c) is specified as not being applicable to Securities of such series as contemplated by Section 2.01, the Company may elect that its and the Guarantors’ respective obligations to make payments with respect to Securities of such series be discharged (“legal defeasance”), if:

 

(1)           no Default or Event of Default under clauses (5) and (6) of Section 6.01 hereof shall have occurred at any time during the period ending on the 91st day after the date of deposit contemplated by Section 8.01(b) (it being understood that this condition shall not be deemed satisfied until the expiration of such period);

 

(2)           unless otherwise specified with respect to Securities of such series as contemplated by Section 2.01, the Company has delivered to the Trustee an Opinion of Counsel from a nationally recognized counsel acceptable to the Trustee to the effect referred to in Section 8.01(b)(4) with respect to such legal defeasance, which opinion is

 

44

 

based on (i) a private letter ruling issued by the United States Internal Revenue Service addressed to the Company, (ii) a published ruling of the United States Internal Revenue Service pertaining to a comparable form of transaction or (iii) a change in the applicable federal income tax law (including regulations) after the date of this Indenture;

 

(3)           the Company and the Guarantors have complied with any other conditions specified pursuant to Section 2.01 to be applicable to the legal defeasance of Securities of such series pursuant to this Section 8.01(c); and

 

(4)           the Company has delivered to the Trustee a Company Order requesting such legal defeasance of the Securities of such series and an Officers’ Certificate stating that all conditions precedent with respect to such legal defeasance of the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect.

 

In such event, the Company and the Guarantors will be discharged from their respective obligations under this Indenture and the Securities of such series to pay principal of, premium (if any) and interest on, and any Additional Amounts with respect to, Securities of such series, the Company’s and the Guarantors’ respective obligations under Sections 4.01, 4.02 and 11.01 shall terminate with respect to such Securities, and the entire indebtedness of the Company evidenced by such Securities and of the Guarantors evidenced by the related Guarantees, if any, shall be deemed paid and discharged.

 

(d)           If and to the extent additional or alternative means of satisfaction, discharge or defeasance of Securities of a series are specified to be applicable to such series as contemplated by Section 2.01, the Company and each of the Guarantors may terminate any or all of its obligations under this Indenture with respect to Securities of a series and any or all of its obligations under the Securities of such series if it fulfills such other means of satisfaction and discharge as may be so specified, as contemplated by Section 2.01, to be applicable to the Securities of such series.

 

(e)           If Securities of any series subject to subsection (a), (b), (c) or (d) of this Section 8.01 are to be redeemed prior to their Stated Maturity, whether pursuant to any optional redemption provisions or in accordance with any mandatory or optional sinking fund provisions, the terms of the applicable trust arrangement shall provide for such redemption, and the Company shall make such arrangements as are reasonably satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense of, the Company.

 

SECTION 8.02                                                              Application of Trust Money.

 

The Trustee or a trustee satisfactory to the Trustee and the Company shall hold in trust money or Government Obligations deposited with it pursuant to Section 8.01 hereof.  It shall apply the deposited money and the money from Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series with respect to which the deposit was made.  Money and securities held in trust are not subject to Article X.

 

45

 

SECTION 8.03                                                              Repayment to Company or Guarantor.

 

The Trustee and the Paying Agent shall promptly pay to the Company or any Guarantor any excess money or Government Obligations (or proceeds therefrom) held by them at any time upon the written request of the Company.

 

Subject to the requirements of any applicable abandoned property laws, the Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal, premium (if any), interest or any Additional Amounts that remain unclaimed for two years after the date upon which such payment shall have become due.  After payment to the Company, Holders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Trustee and the Paying Agent with respect to such money shall cease.

 

SECTION 8.04                                                              Reinstatement.

 

If the Trustee or the Paying Agent is unable to apply any money or Government Obligations deposited with respect to Securities of any series in accordance with Section 8.01 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 obligations of the Company and the Guarantors under this Indenture with respect to the Securities of such series and under the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or the Paying Agent is permitted to apply all such money or Government Obligations in accordance with Section 8.01; provided, however, that if the Company or any Guarantor has made any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Securities because of the reinstatement of its obligations, the Company or such Guarantor, as the case may be, shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or Government Obligations held by the Trustee or the Paying Agent.

 

SECTION 8.05                                                              Miscellaneous Provisions.

 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the Government Obligations deposited pursuant to Section 8.01 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 of outstanding Securities.

 

46

 

ARTICLE IX
 SUPPLEMENTAL INDENTURES AND AMENDMENTS

 

SECTION 9.01                                                              Without Consent of Holders.

 

The Company, the Guarantors and the Trustee may amend or supplement this Indenture or the Securities or waive any provision hereof or thereof without the consent of any Holder:

 

(1)           to cure any ambiguity, omission, defect or inconsistency;

 

(2)           to comply with Section 5.01;

 

(3)           to provide for uncertificated Securities in addition to or in place of certificated Securities, or to provide for the issuance of bearer Securities (with or without coupons);

 

(4)           to provide any security for, or to add any guarantees of or additional obligors on, any series of Securities or the related Guarantees, if any;

 

(5)           to comply with any requirement in order to effect or maintain the qualification of this Indenture under the TIA;

 

(6)           to add to the covenants of the Company or any Guarantor for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series), or to surrender any right or power herein conferred upon the Company or any Guarantor;

 

(7)           to add any additional Events of Default with respect to all or any series of the Securities (and, if any such Event of Default is applicable to less than all series of Securities, specifying the series to which such Event of Default is applicable);

 

(8)           to change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall become effective only when there is no outstanding Security of any series created prior to the execution of such amendment or supplemental indenture that is adversely affected in any material respect by such change in or elimination of such provision; provided, further, that any change made solely to conform the provisions of this Indenture to the description of any Security in a prospectus supplement pursuant to which such Securities were offered and sold will not be deemed to adversely affect any Security of that series in any material respect;

 

(9)           to establish the form or terms of Securities of any series as permitted by Section 2.01;

 

(10)         to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Section 8.01; provided, however, that any such action shall not

 

47

 

adversely affect the interest of the Holders of Securities of such series or any other series of Securities in any material respect; or

 

(11)         to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 7.08.

 

Upon the request of the Company, accompanied by a Board Resolution, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall, subject to Section 9.06, join with the Company and the Guarantors in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and make any further appropriate agreements and stipulations that may be therein contained.

 

Notwithstanding anything to the contrary in this Section 9.01, it shall not be necessary for any Guarantor to join with the Company and the Trustee in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture unless such supplemental indenture applies to a series of Securities entitled to the benefit of a Guarantee by such Guarantor.

 

SECTION 9.02                                                              With Consent of Holders.

 

Except as provided below in this Section 9.02, the Company, the Guarantors and the Trustee may amend or supplement this Indenture with the written consent (including consents obtained in connection with a tender offer or exchange offer for Securities of any one or more series or all series or a solicitation of consents in respect of Securities of any one or more series or all series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of each such series (but the terms of such offer or solicitation may vary from series to series)) of the Holders of at least a majority in principal amount of the then outstanding Securities of each series affected by such amendment or supplement (acting as one class).

 

Upon the request of the Company, accompanied by a Board Resolution, 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 9.06, the Trustee shall, subject to Section 9.06, join with the Company and the Guarantors in the execution of such amendment or supplemental indenture.

 

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.

 

The Holders of a majority in principal amount of the then outstanding Securities of one or more series or of all series (acting as one class) may waive compliance in a particular instance by the Company or any Guarantor with any provision of this Indenture with respect to Securities of such series (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or a solicitation of consents in respect of Securities of

 

48

 

such series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series (but the terms of such offer or solicitation may vary from series to series)).

 

However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not:

 

(1)           reduce the percentage in payment amount of Securities whose Holders must consent to an amendment, supplement or waiver;

 

(2)           reduce the rate of or change the time for payment of interest, including default interest, on any Security;

 

(3)           reduce the principal of, any premium on or any mandatory sinking fund payment with respect to, or change the Stated Maturity of, any Security or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02;

 

(4)           reduce the premium, if any, payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed;

 

(5)           change any obligation of the Company or any Guarantor to pay Additional Amounts with respect to any Security;

 

(6)           change the coin or currency or currencies (including composite currencies) in which any Security or any premium, interest or Additional Amounts with respect thereto are payable;

 

(7)           impair the right to institute suit for the enforcement of any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Security pursuant to Sections 6.07 and 6.08, except as limited by Section 6.06;

 

(8)           make any change in the percentage of principal amount of Securities necessary to waive compliance with certain provisions of this Indenture pursuant to Section 6.04 or 6.07 or make any change in this sentence of Section 9.02;

 

(9)           modify the provisions of this Indenture with respect to the subordination of any Security and any related Guarantees in a manner materially adverse to the Holders;

 

(10)         waive a continuing Default or Event of Default in the payment of principal of, premium (if any) or interest on or Additional Amounts with respect to the Securities; or

 

(11)         except as provided in Article VIII or Section 11.04, release any Guarantor or modify the related Guarantee in any manner materially adverse to the Holders.

 

49

 

An amendment under this Section 9.02 may not make any change that adversely affects the rights under Article X of any holder of an issue of Senior Indebtedness unless the holders of the issue pursuant to its terms consent to the change.

 

A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

 

The right of any Holder to participate in any consent required or sought pursuant to any provision of this Indenture (and the obligation of the Company or any Guarantor to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Company or such Guarantor in a notice furnished to Holders in accordance with the terms of this Indenture.

 

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall mail to the Holders of each Security affected thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver.

 

Notwithstanding anything to the contrary in this Section 9.02, it shall not be necessary for any Guarantor to join with the Company and the Trustee in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture unless such supplemental indenture applies to a series of Securities entitled to the benefit of a Guarantee by such Guarantor.

 

SECTION 9.03                                                              Compliance with the Trust Indenture Act.

 

Every amendment or supplement to this Indenture or the Securities shall comply in form and substance with the TIA as then in effect.

 

SECTION 9.04                                                              Revocation and Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent is not made on any Security.  However, any such Holder or subsequent Holder may revoke the consent as to his or her Security or portion of a Security if the Trustee receives written notice of revocation before a date and time therefor identified by the Company or any Guarantor in a notice furnished to such Holder in accordance with the terms of this Indenture or, if no such date and time shall be identified, the date the amendment, supplement or waiver becomes effective.  An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

 

50

 

The Company or any Guarantor may, but shall not be obligated to, fix a record date (which need not comply with TIA § 316(c)) for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver or to take any other action under this Indenture.  If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.  No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period.

 

After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it is of the type described in any of clauses (1) through (9) of Section 9.02 hereof.  In such case, the amendment, supplement or waiver shall bind each Holder who has consented to it and every subsequent Holder that evidences the same debt as the consenting Holder’s Security.

 

SECTION 9.05                                                              Notation on or Exchange of Securities.

 

If an amendment or supplement changes the terms of an outstanding Security, the Company may require the Holder of the Security to deliver it to the Trustee.  The Trustee may place an appropriate notation on the Security at the request of the Company regarding the changed terms and return it to the Holder.  Alternatively, if the Company so determines, the Company in exchange for the Security shall issue, each Guarantor with respect to such series shall execute the Notation of Guarantee relating to such Security, if any, and the Trustee shall authenticate a new Security that reflects the changed terms.  Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment or supplement.

 

Securities of any series authenticated and delivered after the execution of any amendment or supplement may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such amendment or supplement.

 

SECTION 9.06                                                              Trustee to Sign Amendments, etc.

 

The Trustee shall sign any amendment or supplement authorized pursuant to this Article if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may, but need not, sign it.  In signing or refusing to sign such amendment or supplement, the Trustee shall be entitled to receive, and, subject to Section 7.01 hereof, shall be fully protected in relying upon, in good faith, an Officers’ Certificate and an Opinion of Counsel provided at the expense of the Company or a Guarantor as conclusive evidence that such amendment or supplement is authorized or permitted by this Indenture.

 

51

 

ARTICLE X
 SUBORDINATION OF SECURITIES AND GUARANTEE

 

SECTION 10.01                                                       Applicability of Article; Agreement to Subordinate.

 

The provisions of this Article X shall only be applicable to the Securities of any series (Securities of such series referred to in this Article X as “Subordinated Securities”) designated, pursuant to Section 2.01, as subordinated to Senior Indebtedness and any related Guarantees of such Subordinated Securities. Each Holder by accepting a Subordinated Security agrees that the Debt evidenced by such Subordinated Security and any related Guarantees of such Subordinated Security is subordinated in right of payment, to the extent and in the manner provided in this Article X, to the prior payment of all Senior Indebtedness and that the subordination is for the benefit of and enforceable by the holders of Senior Indebtedness. All provisions of this Article X shall be subject to Section 10.12.

 

SECTION 10.02                                                       Liquidation, Dissolution, Bankruptcy.

 

Upon any payment or distribution of the assets of the Company or the Guarantors, as the case may be, to creditors, upon a liquidation or a dissolution of the Company or the Guarantors, as the case may be, or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or the Guarantors, as the case may be, or their respective property:

 

(a)           holders of Senior Indebtedness of the Company or any Guarantor, as the case may be, shall be entitled to receive payment in full in cash of such Senior Indebtedness of such Person (including interest (if any), accruing on or after the commencement of a proceeding in bankruptcy, whether or not allowed as a claim against the Company or the Guarantors, as the case may be, in such bankruptcy proceeding) before Holders of Subordinated Securities and any related Guarantees, if any, shall be entitled to receive any payment of principal of, or premium, if any, or interest on, the Subordinated Securities from the Company, or any payment in respect of such related Guarantees from the Guarantors; and

 

(b)           until the Senior Indebtedness of the Company or any Guarantor, as the case may be, is paid in full, any distribution to which Holders of Subordinated Securities and any related Guarantees would be entitled but for this Article X shall be made to holders of Senior Indebtedness of the Company or the Guarantors, as the case may be, as their interests may appear, except that such Holders may receive capital stock and any debt securities that are subordinated to Senior Indebtedness of the Company or the Guarantors, as the case may be, to at least the same extent as the Subordinated Securities of the Company or the related Guarantee of any Guarantor, respectively.

 

SECTION 10.03                                                       Default on Senior Indebtedness.

 

The Company and the Guarantors may not pay the principal of, or premium, if any, or interest on, the Subordinated Securities or any related Guarantee or make any deposit pursuant to Article VIII and may not repurchase, redeem or otherwise retire (except, in the case of Subordinated Securities that provide for a mandatory sinking fund pursuant to Section 3.11, by the delivery of Subordinated Securities by the Company to the Trustee pursuant to the first

 

52

 

paragraph of Section 3.11) any Subordinated Securities (collectively, “pay the Subordinated Securities”) if any principal, premium or interest in respect of Senior Indebtedness of such Person is not paid within any applicable grace period (including at maturity) or any other default on Senior Indebtedness of such Person occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms unless, in either case, the default has been cured or waived and any such acceleration has been rescinded or such Senior Indebtedness has been paid in full in cash; provided, however, that the Company and the Guarantors may make payments on the Subordinated Securities or any related Guarantee without regard to the foregoing if the Company and the Trustee receive written notice approving such payment from the Representative of each issue of Designated Senior Indebtedness. During the continuance of any other default with respect to any Designated Senior Indebtedness pursuant to which the maturity thereof may be accelerated immediately without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, the Company and the Guarantors may not make payments on the Subordinated Securities or any related Guarantee for a period (a “Payment Blockage Period”) commencing upon the receipt by the Company and the Trustee (and if such Designated Senior Indebtedness is Debt of a Guarantor, the Guarantor) of written notice of such default from the Representative of any Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period (a “Blockage Notice”) and ending 179 days thereafter (or earlier if such Payment Blockage Period is terminated by written notice to the Trustee and the Company (and if such Designated Senior Indebtedness is Debt of a Guarantor, the Guarantor) from the Person or Persons who gave such Blockage Notice, by repayment in full in cash of such Designated Senior Indebtedness or because the default giving rise to such Blockage Notice is no longer continuing). Notwithstanding the provisions described in the immediately preceding sentence (but subject to the provisions contained in Section 10.02 and the first sentence of this Section 10.03), unless the holders of such Designated Senior Indebtedness or the Representative of such holders shall have accelerated the maturity of such Designated Senior Indebtedness, the Company and the Guarantors may resume payments on the Subordinated Securities and any related Guarantee after such Payment Blockage Period. Not more than one Blockage Notice may be given in any consecutive 360-day period, irrespective of the number of defaults with respect to any number of issues of Designated Senior Indebtedness during such period, unless otherwise specified pursuant to Section 2.01 for the Subordinated Securities of a series; provided, however, that in no event may the total number of days during which any Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate during any 360 consecutive day period. For purposes of this Section 10.03, no default or event of default which existed or was continuing on the date of the commencement of any Payment Blockage Period with respect to the Designated Senior Indebtedness initiating such Payment Blockage Period shall be, or be made, the basis of the commencement of a subsequent Payment Blockage Period by the Representative of such Designated Senior Indebtedness, whether or not within a period of 360 consecutive days, unless such default or event of default shall have been cured or waived for a period of not less than 90 consecutive days.

 

SECTION 10.04                                                       Acceleration of Payment of Securities.

 

If payment of the Subordinated Securities is accelerated because of an Event of Default, the Company shall promptly notify the holders of the Designated Senior Indebtedness (or their Representatives) of the acceleration.

 

53

 

SECTION 10.05                                                       When Distribution Must Be Paid Over.

 

If a distribution is made to Holders of Subordinated Securities or any related Guarantee that because of this Article X should not have been made to them, the Holders who receive such distribution shall hold it in trust for holders of Senior Indebtedness and pay it over to them as their interests may appear.

 

SECTION 10.06                                                       Subrogation.

 

After all Senior Indebtedness is paid in full and until the Subordinated Securities are paid in full, Holders thereof shall be subrogated to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness. A distribution made under this Article X to holders of Senior Indebtedness which otherwise would have been made to Holders of Subordinated Securities is not, as between the Company or the Guarantors, as the case may be, and such Holders, a payment by the Company or the Guarantors, as the case may be, on Senior Indebtedness.

 

SECTION 10.07                                                       Relative Rights.

 

This Article X defines the relative rights of Holders of Subordinated Securities and holders of Senior Indebtedness. Nothing in this Indenture shall:

 

(a)           impair, as between the Company or the Guarantors, as the case may be, and Holders of either Subordinated Securities or Securities, the obligation of the Company or the Guarantors, as the case may be, which is absolute and unconditional, to pay principal of, and premium, if any, and interest on, the Subordinated Securities and the Securities in accordance with their terms; or

 

(b)           prevent the Trustee or any Holder of either Subordinated Securities or Securities from exercising its available remedies upon an Event of Default, subject to the rights of holders of Senior Indebtedness to receive distributions otherwise payable to Holders of Subordinated Securities.

 

SECTION 10.08                                                       Subordination May Not Be Impaired by the Company.

 

No right of any holder of Senior Indebtedness to enforce the subordination of the Debt evidenced by the Subordinated Securities and any related Guarantee shall be impaired by any act or failure to act by the Company or the Guarantors or by its or their failure to comply with this Indenture.

 

SECTION 10.09                                                       Rights of Trustee and Paying Agent.

 

The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Subordinated Securities.  Failure to give such notice shall not affect the subordination of the Subordinated Securities to Senior Indebtedness. Notwithstanding Sections 10.02 and 10.03, the Trustee or any Paying Agent may continue to make payments on Subordinated Securities and shall not be charged with knowledge of the existence of facts that would prohibit the making of

 

54

 

any such payments and shall be entitled in all respects to assume that no such facts exist unless, not less than three Business Days prior to the date of such payment, a Responsible Officer of the Trustee receives notice satisfactory to it that payments may not be made under this Article X. The Company, the Registrar, any Paying Agent, a Representative or a holder of Senior Indebtedness may give the notice; provided, however, that, if an issue of Senior Indebtedness has a Representative, only the Representative may give the notice on behalf of the holders of the Senior Indebtedness of that issue.

 

The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not the Trustee. The Registrar and any Paying Agent may do the same with like rights. The Trustee shall be entitled to all of the rights set forth in this Article X with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness; and nothing in Article VII shall deprive the Trustee of any of its rights as such holder. Nothing in this Article X shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07.

 

SECTION 10.10                                                       Distribution or Notice to Representative.

 

Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representative (if any).

 

SECTION 10.11                                                       Article X Not to Prevent Defaults or Limit Right to Accelerate.

 

The failure to make a payment pursuant to the Subordinated Securities, whether directly or pursuant to the related Guarantees, if any by reason of any provision in this Article X shall not be construed as preventing the occurrence of a Default or Event of Default. Nothing in this Article X shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of either the Subordinated Securities or the Securities, as the case may be.

 

SECTION 10.12                                                       Trust Moneys Not Subordinated.

 

Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. Government Obligations held in trust under Article VIII by the Trustee for the payment of principal of, and premium, if any, and interest on, the Subordinated Securities or the Securities shall not be subordinated to the prior payment of any Senior Indebtedness or subject to the restrictions set forth in this Article X, and none of the Holders thereof shall be obligated to pay over any such amount to the Company, the Guarantors or any holder of Senior Indebtedness or any other creditor of the Company or the Guarantors.

 

SECTION 10.13                                                       Trustee Entitled to Rely.

 

Upon any payment or distribution pursuant to this Article X, the Trustee and the Holders shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 10.02 are pending, upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to such Holders or upon the Representatives for the holders of Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other Debt of the Company or the Guarantors, the amount

 

55

 

thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article X. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article X, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article X, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article X.

 

SECTION 10.14                                                       Trustee to Effectuate Subordination.

 

Each Holder by accepting a Subordinated Security and any related Guarantee authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders of Subordinated Securities and the holders of Senior Indebtedness as provided in this Article X and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

SECTION 10.15                                                       Trustee Not Fiduciary for Holders of Senior Indebtedness.

 

The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders of Subordinated Securities or the Company or the Guarantors or any other Person, money or assets to which any holders of Senior Indebtedness shall be entitled by virtue of this Article X or otherwise. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants or obligations as are specifically set forth in this Article and no implied covenants or obligations with respect to holders of Senior Indebtedness shall be read into this Indenture against the Trustee.

 

SECTION 10.16                                                       Reliance by Holders of Senior Indebtedness on Subordination Provisions.

 

Each Holder by accepting a Subordinated Security and any related Guarantee acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the issuance of the Subordinated Securities, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

 

56

 

ARTICLE XI
 GUARANTEE

 

SECTION 11.01                                                       Guarantee.

 

(a)           Notwithstanding any provision of this Article XI to the contrary, the provisions of this Article XI relating to the Guarantors shall be applicable only to, and inure solely to the benefit of, the Securities of any series designated, pursuant to Section 2.01, as entitled to the benefits of the related Guarantee of each of the Guarantors.

 

(b)           For value received, each of the Guarantors hereby fully, unconditionally and absolutely guarantees (each, a “Guarantee”) to the Holders and to the Trustee the due and punctual payment of the principal of, and premium, if any, and interest on the Securities and all other amounts due and payable under this Indenture and the Securities by the Company, when and as such principal, premium, if any, and interest shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, according to the terms of the Securities and this Indenture, subject to the limitations set forth in Section 11.03.

 

(c)           Failing payment when due of any amount guaranteed pursuant to the related Guarantee, for whatever reason, each of the Guarantors will be jointly and severally obligated to pay the same immediately, subject to the subordination provisions contained in Article X.  Each of the Guarantees hereunder is intended to be a general, unsecured, subordinated obligation of the related Guarantor and will rank pari passu in right of payment with all Debt of such Guarantor that is not, by its terms, expressly subordinated in right of payment to such Guarantee.  Each of the Guarantors hereby agrees that its obligations hereunder shall be full, unconditional and absolute, irrespective of the validity, regularity or enforceability of the Securities, its Guarantee, the Guarantee of any other Guarantor or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Securities with respect to any provisions hereof or thereof, the recovery of any judgment against the Company or any Guarantor, or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of the Guarantors.  Each of the Guarantors hereby agrees that in the event of a default in payment of the principal of, or premium, if any, or interest on the Securities of such series, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, legal proceedings may be instituted by the Trustee on behalf of the Holders or, subject to Section 6.06, by the Holders, on the terms and conditions set forth in this Indenture, directly against such Guarantor to enforce such Guarantee without first proceeding against the Company or any other Guarantor.

 

(d)           The obligations of each of the Guarantors under this Article XI shall be as aforesaid full, unconditional and absolute and shall not be impaired, modified, released or limited by any occurrence or condition whatsoever, including, without limitation, (i) any compromise, settlement, release, waiver, renewal, extension, indulgence or modification of, or any change in, any of the obligations and liabilities of the Company or any of the Guarantors contained in the Securities or this Indenture, (ii) any impairment, modification, release or limitation of the liability of the Company, any of the Guarantors or any of their estates in bankruptcy, or any remedy for the enforcement thereof, resulting from the operation of any present or future provision of any applicable Bankruptcy Law, as amended, or other statute or from the decision of

 

57

 

any court, (iii) the assertion or exercise by the Company, any of the Guarantors or the Trustee of any rights or remedies under the Securities or this Indenture or their delay in or failure to assert or exercise any such rights or remedies, (iv) the assignment or the purported assignment of any property as security for the Securities, including all or any part of the rights of the Company or any of the Guarantors under this Indenture, (v) the extension of the time for payment by the Company or any of the Guarantors of any payments or other sums or any part thereof owing or payable under any of the terms and provisions of the Securities or this Indenture or of the time for performance by the Company or any of the Guarantors of any other obligations under or arising out of any such terms and provisions or the extension or the renewal of any thereof, (vi) the modification or amendment (whether material or otherwise) of any duty, agreement or obligation of the Company or any of the Guarantors set forth in this Indenture, (vii) the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all of the assets, marshaling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, the Company or any of the Guarantors or any of their respective assets, or the disaffirmance of the Securities, the Guarantee or this Indenture in any such proceeding, (viii) the release or discharge of the Company or any of the Guarantors from the performance or observance of any agreement, covenant, term or condition contained in any of such instruments by operation of law, (ix) the unenforceability of the Securities of such series, the related Guarantees or this Indenture or (x) any other circumstances (other than payment in full or discharge of all amounts guaranteed pursuant to the related Guarantees) which might otherwise constitute a legal or equitable discharge of a surety or guarantor.

 

(e)           Each of the Guarantors hereby (i) waives diligence, presentment, demand of payment, filing of claims with a court in the event of the merger, insolvency or bankruptcy of the Company or any of the Guarantors, and all demands whatsoever, (ii) acknowledges that any agreement, instrument or document evidencing its Guarantee may be transferred and that the benefit of its obligations hereunder shall extend to each holder of any agreement, instrument or document evidencing its Guarantee without notice to it and (iii) covenants that its Guarantee will not be discharged except by complete performance of such Guarantee.  Each of the Guarantors further agrees that if at any time all or any part of any payment theretofore applied by any Person to its Guarantee is, or must be, rescinded or returned for any reason whatsoever, including, without limitation, the insolvency, bankruptcy or reorganization of the Company or any of the Guarantors, such Guarantee shall, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence notwithstanding such application, and such Guarantee shall continue to be effective or be reinstated, as the case may be, as though such application had not been made.

 

(f)            Each of the Guarantors shall be subrogated to all rights of the Holders and the Trustee against the Company in respect of any amounts paid by such Guarantor pursuant to the provisions of this Indenture; provided, however, that such Guarantor, shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until all of the Securities of such series and the related Guarantees shall have been paid in full or discharged.

 

58

 

SECTION 11.02                                                       Execution and Delivery of Guarantees.

 

To further evidence its Guarantee set forth in Section 11.01, each of the Guarantors hereby agrees that a notation relating to such Guarantee (the “Notation of Guarantee”), substantially in the form attached hereto as Annex A, shall be endorsed on each Security of the series entitled to the benefits of such Guarantee authenticated and delivered by the Trustee, which Notation of Guarantee shall be executed by either manual or facsimile signature of an Officer of such Guarantor.  Each of the Guarantors hereby agrees that its Guarantee set forth in Section 11.01 shall remain in full force and effect notwithstanding any failure to endorse on each Security the Notation of Guarantee relating to such Guarantee.  If any Officer of such Guarantor, whose signature is on this Indenture or the Notation of Guarantee no longer holds that office at the time the Trustee authenticates such Security or at any time thereafter, the Guarantee of such Security shall be valid nevertheless.  The delivery of any Security of a series entitled to the benefits of a Guarantee under this Article XI by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of each Guarantor.

 

SECTION 11.03                                                       Limitation on Liability of the Guarantors.

 

Each Guarantor and by its acceptance hereof each Holder of a Security of a series entitled to the benefits of a Guarantee under this Article XI hereby confirms that it is the intention of all such parties that the guarantee by such Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for purposes of any federal or state law.  To effectuate the foregoing intention, the Holders of a Security entitled to the benefits of such Guarantee and the Guarantors hereby irrevocably agree that the obligations of each Guarantor under its Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law.

 

SECTION 11.04                                                       Release of Guarantors from Guarantee.

 

(a)           Notwithstanding any other provisions of this Indenture, the Guarantee of any Guarantor may be released upon the terms and subject to the conditions set forth in Article VIII and this Section 11.04.  Provided that no Default shall have occurred and shall be continuing under this Indenture, any Guarantee incurred by a Guarantor pursuant to this Article XI shall be unconditionally released and discharged (i) automatically upon (A) any sale, exchange or transfer, whether by way of merger or otherwise, to any Person that is not the Company or a Subsidiary of the Company, of all of the Company’s direct or indirect equity interests in such Guarantor and such Guarantor no longer qualifies as a Subsidiary of the Company as a result of such disposition (provided such sale, exchange or transfer is not prohibited by this Indenture) or (B) the merger of such Guarantor into the Company or any other Guarantor or the liquidation and dissolution of such Guarantor (in each case to the extent not prohibited by this Indenture) or (ii) following delivery of a written notice of such release or discharge by the Company to the Trustee, upon the release or discharge of all guarantees by such Guarantor of any Debt of the Company other than obligations arising under this Indenture and

 

59

 

any Securities issued hereunder, except a discharge or release by or as a result of payment under such guarantees.

 

(b)           The Trustee shall deliver an appropriate instrument evidencing any release of a Guarantor from its Guarantee upon receipt of a written request of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel to the effect that the Guarantor is entitled to such release in accordance with the provisions of this Indenture. If the Guarantor is not so released, it shall remain liable for the full amount of principal of (and premium, if any, on) and interest on the Securities entitled to the benefits of such Guarantee as provided in this Indenture, subject to the limitations of Section 11.03.

 

SECTION 11.05                                                       Contribution.

 

In order to provide for just and equitable contribution among the Guarantors, the Guarantors hereby agree, inter se, that in the event any payment or distribution is made by any Guarantor (a “Funding Guarantor”) under its Guarantee, such Funding Guarantor shall be entitled to a contribution from each other Guarantor (as applicable) in a pro rata amount based on the net assets of each Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Company’s obligations with respect to the Securities of a series entitled to the benefits of a Guarantee under this Article XI or any other Guarantor’s obligations with respect to its Guarantee of such series of Securities.

 

ARTICLE XII
 MISCELLANEOUS

 

SECTION 12.01                                                       Trust Indenture Act Controls.

 

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by operation of TIA § 318(c), the imposed duties shall control.

 

SECTION 12.02                                                       Notices.

 

Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, facsimile or overnight air courier guaranteeing next day delivery, to the other’s address:

 

If to the Company or any of the Guarantors:

 

[Jones Energy, Inc.]

[Jones Energy Holdings, LLC]

[Jones Energy Finance Corp.]
 807 Las Cimas Parkway, Suite 350
 Austin, Texas 78746
 Attention:  Robert J. Brooks
 Facsimile No.:  (512) 328-2953

 

60

 

If to the Trustee:

 

[                                              ]

 

The Company, any Guarantor or the Trustee by notice to the others may designate additional or different addresses for subsequent notices or communications.

 

All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

 

Any notice or communication to a Holder shall be mailed by first-class mail, postage prepaid, to the Holder’s address shown on the register kept by the Registrar.  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.

 

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, except in the case of notice to the Trustee, it is duly given only when received.

 

If the Company or a Guarantor mails a notice or communication to Holders, it shall mail a copy to the Company and the other Guarantors, as the case may be, and to the Trustee and each Agent at the same time.

 

All notices or communications, including, without limitation, notices to the Trustee, the Company or a Guarantor by Holders, shall be in writing, except as otherwise set forth herein.

 

In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice.

 

SECTION 12.03                                                       Communication by Holders with Other Holders.

 

Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Securities.  The Company, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

 

61

 

SECTION 12.04                                                       Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Company or a Guarantor to the Trustee to take any action under this Indenture, the Company or such Guarantor, as the case may be, shall, if requested by the Trustee, furnish to the Trustee at the expense of the Company or such Guarantor, as the case may be:

 

(1)           an Officers’ Certificate (which shall include the statements set forth in Section 12.05) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(2)           an Opinion of Counsel (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.

 

SECTION 12.05                                                       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 TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include:

 

(1)           a statement that the Person making such certificate or opinion has read such covenant or condition;

 

(2)           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;

 

(3)           a statement 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

 

(4)           a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

 

SECTION 12.06                                                       Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or at a meeting of Holders.  The Registrar or the Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

SECTION 12.07                                                       Legal Holidays.

 

If a payment date is a Legal Holiday at a Place of Payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

 

62

 

SECTION 12.08                                                       No Recourse Against Others.

 

A director, officer, employee, stockholder, partner or other owner of the Company, a Guarantor or the Trustee, as such, shall not have any liability for any obligations of the Company under the Securities, for the obligations of any Guarantor under any Guarantee, or for any obligations of the Company, any Guarantor or the Trustee under this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  Each Holder by accepting a Security waives and releases all such liability.  The waiver and release shall be part of the consideration for the issue of Securities.

 

SECTION 12.09                                                       Governing Law.

 

THIS INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

SECTION 12.10                                                       No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company, any Guarantor or any other Subsidiary of the Company.  Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

SECTION 12.11                                                       Successors.

 

All agreements of the Company and each of the Guarantors in this Indenture and the Securities shall bind their successors.  All agreements of the Trustee in this Indenture shall bind its successors.

 

SECTION 12.12                                                       Severability.

 

In case any provision in this Indenture or in the Securities or in any Guarantee shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall, to the fullest extent permitted by applicable law, not in any way be affected or impaired thereby.

 

SECTION 12.13                                                       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.

 

SECTION 12.14                                                       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 hereof and shall in no way modify or restrict any of the terms or provisions hereof.

 

63

 

SECTION 12.15                                                       Waiver of Jury Trial.

 

EACH OF THE COMPANY, THE GUARANTORS AND THE TRUSTEE 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 SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.

 

SECTION 12.16                                                       Force Majeure.

 

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its 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 and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

SECTION 12.17                                                       USA PATRIOT Act.

 

The parties hereto acknowledge that in accordance with Section 326 of the USA PATRIOT Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account.  The Company and the Guarantors agree that they will provide the Trustee with information about the Company and the Guarantors as the Trustee may reasonably request in order for the Trustee to satisfy the requirements of the USA PATRIOT Act.

 

64

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

 

 

	
 
    	
[JONES   ENERGY, INC.]
    
	
 
    	
[JONES ENERGY HOLDINGS,   LLC]
    
	
 
    	
[JONES ENERGY FINANCE   CORP.]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[NAME(S) OF   GUARANTOR(S)]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
				

 

 

	
 
    	
[                                              ],   as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

ANNEX A

 

NOTATION OF GUARANTEE

 

Each of the Guarantors (which term includes any successor Person under the Indenture) has fully, unconditionally and absolutely guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the Securities and all other amounts due and payable under the Indenture and the Securities by the Company.

 

The obligations of the Guarantors to the Holders of Securities and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Articles X and XI of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee.

 

	
 
    	
[NAME(S) OF   GUARANTOR(S)]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:Exhibit

EXECUTION COPY

 

Amended and Restated
CREDIT CARD PROGRAM AGREEMENT
by and between
Ascena Retail Group, Inc.
and
Capital One, National Association
dated as of 
April 28, 2017

1

TABLE OF CONTENTS
		
	ARTICLE 1 DEFINITIONS
	5

		
	1.1
	Generally.    5

		
	1.2
	Miscellaneous.    16

		
	ARTICLE 2 ESTABLISHMENT OF THE PROGRAM
	16

		
	2.1
	Generally.    16

		
	2.2
	Credit Program.    16

		
	2.3
	Account Terms.    17

		
	2.4
	Exclusivity.    17

		
	2.5
	Non-Solicitation.    17

		
	2.6
	Amendment and Restatement.    17

		
	ARTICLE 3 PROGRAM MANAGEMENT
	18

		
	3.1
	Program Objectives.    18

		
	3.2
	Program Managers; Other Program Management Resources.    18

		
	3.3
	Operating Committee.    19

		
	3.4
	Program Executives.    20

		
	3.5
	Program Changes.    20

		
	3.6
	Dispute Resolution Procedure.    20

		
	3.7
	Firewalls.    21

		
	ARTICLE 4 PROGRAM OPERATION
	22

		
	4.1
	Ownership of Accounts.    22

		
	4.2
	Certain Company Responsibilities.    22

		
	4.3
	Certain Bank Responsibilities.    23

		
	4.4
	Operating Procedures.    24

		
	4.5
	Materials Developed and Used in Connection with the Program.    25

		
	4.6
	Applications for Credit Under the Program.    25

		
	4.7
	Credit Underwriting and Risk Management.    26

		
	4.8
	Servicing of Accounts by Bank.    26

		
	4.9
	In-Store Payments.    27

		
	4.10
	Chargebacks.    27

		
	4.11
	Collections.    28

		
	4.12
	Systems.    28

		
	4.13
	Program Website.    28

		
	4.14
	Bank Reports and Notices.    29

		
	4.15
	Sarbanes-Oxley Compliance.    29

		
	4.16
	Sales Taxes and Related Record Retention.    29

		
	4.17
	Reciprocal Access and Audit Rights.    29

		
	4.18
	Insider Fraud Prevention.    29

		
	ARTICLE 5 MARKETING OF THE PROGRAM
	30

		
	5.1
	Company Responsibility to Market the Program.    30

		
	5.2
	Bank’s Responsibility to Market the Program.    31

		
	5.3
	Communications with Cardholders.    31

		
	5.4
	Protection Programs and Enhancement Products.    33

		
	ARTICLE 6 CARDHOLDER AND CUSTOMER INFORMATION
	33

		
	6.1
	Customer Information.    33

		
	6.2
	Cardholder Data.    33

1

		
	6.3
	Customer Data.    33

		
	6.4
	Data Security.    33

		
	ARTICLE 7 MERCHANT SERVICES
	33

		
	7.1
	Honoring Credit Cards.    33

		
	7.2
	Transmittal and Authorization of Charge Transaction Data.    33

		
	7.3
	Settlement Procedures.    34

		
	7.4
	Returns of Goods and/or Services.    34

		
	ARTICLE 8 PROGRAM ECONOMICS
	34

		
	8.1
	Monthly Statement of Bank.    34

		
	8.2
	Compensation.    34

		
	ARTICLE 9 LICENSING OF TRADEMARKS; INTELLECTUAL PROPERTY
	34

		
	9.1
	The Company Licensed Marks.    34

		
	9.2
	The Bank Licensed Marks.    36

		
	9.3
	Ownership of Intellectual Property.    38

		
	ARTICLE 10 REPRESENTATIONS, WARRANTIES AND COVENANTS
	38

		
	10.1
	General Representations and Warranties of Company.    38

		
	10.2
	General Representations and Warranties of Bank.    41

		
	10.3
	General Covenants of Company.    43

		
	10.4
	General Covenants of Bank.    44

		
	ARTICLE 11 CONFIDENTIALITY
	45

		
	11.1
	General Confidentiality.    45

		
	11.2
	Use and Disclosure of Confidential Information.    47

		
	11.3
	Unauthorized Use or Disclosure of Confidential Information.    47

		
	11.4
	Return or Destruction of Confidential Information.    48

		
	ARTICLE 12
	48

		
	ARTICLE 13 EVENTS OF DEFAULT; RIGHTS AND REMEDIES
	48

		
	ARTICLE 14 TERM/TERMINATION
	48

		
	ARTICLE 15 EFFECTS OF TERMINATION
	48

		
	ARTICLE 16 INDEMNIFICATION
	49

		
	16.1
	Company Indemnification of Bank.    49

		
	16.2
	Bank’s Indemnification of Company.    50

		
	16.3
	Procedures.    51

		
	16.4
	Notice and Additional Rights and Limitations.    52

		
	ARTICLE 17 MISCELLANEOUS
	53

		
	17.1
	Precautionary Security Interest.    53

		
	17.2
	Securitization; Participation.    53

		
	17.3
	No Consequential Damages.    53

		
	17.4
	Assignment.    53

		
	17.5
	Sale or Transfer of Accounts.    54

		
	17.6
	Subcontracting.    54

		
	17.7
	Amendment.    54

		
	17.8
	Non-Waiver.    54

		
	17.9
	Severability.    54

		
	17.10
	Governing Law.    54

2

		
	17.11
	Captions.    55

		
	17.12
	Notices.    55

		
	17.13
	Further Assurances.    55

		
	17.14
	No Joint Venture.    56

		
	17.15
	Press Releases.    56

		
	17.16
	No Set-Off.    56

		
	17.17
	Third Parties.    56

		
	17.18
	Force Majeure.    56

		
	17.19
	Entire Agreement.    57

		
	17.20
	Binding Effect; Effectiveness.    57

		
	17.21
	Counterparts/Facsimiles/PDF E-Mails.    57

		
	17.22
	Arbitration.    57

		
	17.23
	Survival.    58

3

This Amended and Restated Private Label Credit Card Program Agreement is made as of the 28th of April, 2017 (“Effective Date”), by and between Ascena Retail Group, Inc., a Delaware corporation with its principal offices at 933 MacArthur Blvd., Mahwah, N.J. 07430 (“Company”), and Capital One, National Association, a national banking association with its principal offices at 1680 Capital One Drive, McLean, V.A. 22102 (“Bank”). 
WITNESSETH:
WHEREAS, Bank establishes programs to extend credit via private label and co-branded credit cards to qualified customers for the purchase of goods and services;
WHEREAS, Company subsidiaries engage in retail apparel sales under the Company Marks; 
WHEREAS, Company has requested that Bank establish the Program pursuant to which Bank shall, pursuant to the terms of this Agreement, offer Private Label Credit Cards that shall be accepted by Company Channels; 
WHEREAS, the Parties acknowledge that they intend for Bank to issue Credit Cards as set forth in Schedule D; 
WHEREAS, the Parties have entered into that certain Credit Card Program Agreement dated as of August 29, 2014 (such date, the “Original Effective Date”; such agreement, together with all Schedules and Exhibits thereto, and as modified, altered, supplemented, amended and/or restated from time to time prior to the date hereof, the “Original Program Agreement,” including pursuant to (i) that certain letter agreement dated as of November 26, 2014 by and between Company and Bank (the “First Letter Agreement”), (ii) that certain letter agreement dated as of April 14, 2015 by and between Company and Bank (the “Second Letter Agreement”), (iii) the First Amendment thereto dated as of June 24, 2016 by and between Company and Bank (the “First Amendment”), (iv) the Second Amendment thereto dated as of July 29, 2016 by and between Company and Bank (the “Second Amendment”), (v) the Third Amendment thereto dated as of August 26, 2016 by and between Company and Bank (the “Third Amendment”), (vi) the Fourth Amendment thereto dated as of September 1, 2016 by and between Company and Bank (the “Fourth Amendment”), (vii) the Fifth Amendment thereto dated as of September 9, 2016 by and between Company and Bank (the “Fifth Amendment”), (viii) the Sixth Amendment thereto dated as of September 16, 2016 by and between Company and Bank (the “Sixth Amendment”), (ix) the Seventh Amendment thereto dated as of September 23, 2016 by and between Company and Bank (the “Seventh Amendment”), (x) the Eighth Amendment thereto dated as of September 30, 2016 by and between Company and Bank (the “Eighth Amendment”), (xi) that certain Accession Agreement dated as of October 18, 2016 by and among Company, Tween Brands, Inc. and Bank (the “First Accession Agreement”) and (xii) that certain Accession Agreement dated as of October 18, 2016 by and among Company, The Dressbarn, Inc., Maurices Incorporated and Bank (the “Second Accession Agreement” and together with the First Letter Agreement, the Second Letter Agreement, the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh Amendment, the Eighth Amendment and the First Accession Agreement, collectively the “Amendments”)); 
WHEREAS, the Parties wish for purposes of convenience to amend and restate the Original Program Agreement by reorganizing the provisions thereof and incorporating therein the changes made thereto pursuant to the Amendments; and 

4

WHEREAS, the Parties agree that the goodwill associated with the Company Marks contemplated for use hereunder is of substantial value that is dependent upon the maintenance of high quality services and appropriate use of the marks pursuant to this Agreement.
NOW, THEREFORE, in consideration of the terms, conditions and mutual covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Company and Bank agree as follows:
ARTICLE 1 
 
DEFINITIONS
		
	1.1
	Generally.

Additional defined terms are set forth in Schedule 1.1.  The following terms shall have the following meanings when used in this Agreement:
“AAA” has the meaning set forth in Section 17.22(c).
“ABL Agreement” means that certain Amended and Restated Credit Agreement dated as of January 3, 2011, among Ascena Retail Group, Inc., the Borrowing Subsidiaries party thereto, the other Loan Parties party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, as amended and restated as of March 13, 2013 (and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time).
“Accession Agreement” has the meaning set forth in Schedule 1.1.     
“Account” means a Private Label Account as set forth in this Agreement and includes Purchased Accounts.
“Account Documentation” means, with respect to an Account, any and all documentation relating to that Account, including all Credit Card Applications, Credit Card Agreements, Credit Cards, Billing Statements related to such Accounts, checks or other forms of payment with respect to an Account, credit bureau reports (to the extent not prohibited from transfer by Applicable Law or contract), adverse action notices, change in terms notices, other notices, correspondence, memoranda, documents, stubs, instruments, certificates, agreements, magnetic tapes, disks, hard copy formats or other computer-readable data transmissions, any microfilm, electronic or other copy of any of the foregoing, and any other written, electronic or other records or materials of whatever form or nature, whether tangible or intangible, including information relating or pertaining to any of the foregoing to the extent related to the Program; provided that Account Documentation shall not include Retail Entity register tapes and electronic journals, invoices, sales or shipping slips, delivery and other receipts or other indicia of the sale of Goods and/or Services.
“Account Terms” means the New Account Terms or Purchased Account Terms, as applicable, as such may be amended from time to time in accordance with this Agreement.
“Affected Party” has the meaning set forth in Schedule 6.4.
“Affiliate” means, with respect to any Person, each Person that Controls, is Controlled by or is under common Control with, such Person. 

5

“Agreement” means this Amended and Restated Credit Card Program Agreement, together with all of its Schedules and exhibits, and, if modified, altered, supplemented, amended and/or restated, as the same may be so modified, altered, supplemented, amended and/or restated from time to time.
“Amendments” has the meaning set forth in the recitals hereto.
“Applicable Law” has the meaning set forth in Schedule 1.1.      
“Applicant” means an individual who has submitted a Credit Card Application who desires a Credit Card under the Program.
“Bank” has the meaning set forth in the preamble.
“Bank Event of Default” means the occurrence of any one or more of the events listed in Schedule 13.2, or in Schedule 13.1 with respect to Bank. 
“Bank Indemnified Parties” has the meaning set forth in Section 16.1.    
“Bank Licensed Marks” means the trademarks, tradenames, service marks, logos and other proprietary designations of Bank listed on Schedule A and licensed to Company under Section 9.2.
“Bank Marks” has the meaning set forth in Schedule 9.3.
“Bank Matters” has the meaning set forth in Section 3.6(d).
“Bankruptcy Code” means Title 11 of the United States Code, as amended, or any other applicable state or federal bankruptcy, insolvency, moratorium or other similar law and all laws relating thereto.
“Bankruptcy Event” has the meaning set forth in Schedule 13.4.
“Billing Cycle” means the interval of time between regular periodic Billing Dates for an Account.
“Billing Date” means, for any Account, the last day of each regular period when the Account is billed.
“Billing Statement” means a summary of Account credit and debit transactions for a Billing Cycle, including a statement with only past-due account information and/or an Account with a zero Cardholder Indebtedness at a Billing Date, but where such Account had transaction activity since the last Billing Date, whether in print or electronic form.
“Business Day” means any day, other than a Saturday, Sunday or legal holiday, on which Company and Bank both are open for business.
“Cardholder” means any individual who resides in the United States and who has been issued a Credit Card within the United States.
“Cardholder Data” means all Personally Identifiable Information about a Cardholder or Applicant received by or on behalf of Bank in connection with the Cardholder’s application for, or that is necessary to affect a transaction arising out of the use of, a Credit Card or Account or otherwise obtained by or on behalf of Bank, including Charge Transaction Data and data obtained in connection with enrollment in  any Value Proposition or portion thereof only to the extent available to Cardholders in their capacity as Cardholders and excluding item specific Transaction information collected about Cardholders and all other Transaction and experience information collected by Company or its Affiliates with regard to each purchase made by a Customer using 

6

a Credit Card, other than information required under Applicable Law to be displayed on Billing Statements or for resolution of Cardholder disputes.  For clarity, tokens issued in replacement of Credit Card information are not Cardholder Data.
“Cardholder Indebtedness” means all amounts charged and owing by Cardholders with respect to an Account, including principal balances and finance charges whether billed or accrued, billed late fees and other similar billed fees, less the amount of any payments received, any credit balances owed to Cardholders, including any credits associated with returns of Goods and/or Services and similar credits and adjustments. 
“Cardholder List” means any list in electronic form that identifies or provides a means of differentiating Cardholders, including any such electronic listing that includes the names, addresses, email addresses (as available), telephone numbers or social security numbers of any or all Cardholders.
“Change in Control” means, with respect to a Party, that any Person (acting alone or with Affiliates) acquires Control of such Party, other than when any transaction contemplated by this definition is consummated by such Party with a Person that, immediately prior to the consummation of such transaction and thereafter, directly or indirectly, is an Affiliate of such Party.
“Charge Transaction Data” means the Transaction information with regard to each purchase of Goods and/or Services charged to an Account and each return of such Goods and/or Services or other adjustment for credit to an Account that is necessary for Bank to process the Transaction and/or populate a Billing Statement with information, excluding item-specific Transaction information collected about Cardholders and all other Transaction and experience information collected by Company or its Affiliates with regard to each purchase made by a Customer using a Credit Card. 
“Claim” has the meaning set forth in Schedule 4.16.
“Claimant” has the meaning set forth in Schedule 4.16.
“Closing Date” has the meaning set forth in Schedule 1.1.          
“Collections Policies” has the meaning set forth in Section 4.11(a). 
“Combination Mark” has the meaning set forth in Schedule 9.3.
“Company” has the meaning set forth in the preamble.
“Company Cash Balance” has the meaning set forth in Schedule 13.4.
“Company Channels” means those certain sales channels operating under a Company Licensed Mark through which Company’s Affiliates sell their Goods and/or Services during the Term, including (as applicable): (i) Stores, (ii) all websites and other electronic sales media (e.g., mobile applications) operated by or on behalf of Company or its Affiliates under a Company Licensed Mark; (iii) any Retail Entity catalog, if any, offering Goods and/or Services; and (iv) to the extent applicable, any Licensee location operating within any of the foregoing.
“Company Event of Default” means the occurrence of any one or more of the events listed in Schedule 13.3, or in Schedule 13.1 with respect to Company.
“Company Indemnified Parties” has the meaning set forth in Section 16.2.

7

“Company Licensed Marks” means the trademarks, tradenames, service marks, logos and other proprietary designations of Company or its Affiliates listed on Schedule C and licensed to Bank by Company or its Affiliates under Section 9.1. 
“Company Marks” means the trademarks, tradenames, service marks, logos, and other proprietary designations of Company listed on Schedule B.
“Company Matters” has the meaning set forth in Section 3.6(c).         
“Confidential Information” has the meaning set forth in Section 11.1(a).
“Consumer Credit Product” has the meaning set forth in Schedule 2.4.          
“Control” with regard to an entity, means the beneficial, equitable or legal ownership, either directly or indirectly, of fifty percent (50%) or more of the capital stock (or other ownership interest, if not a corporation) of such entity having voting rights, or effective control of the management or policies of such entity (through contract, board representation or otherwise) regardless of the percentage of ownership.
“Conversion Date” has the meaning set forth in Schedule 1.1.             
“Conversion Plan” has the meaning set forth in Schedule 2.1.
“Credits” has the meaning set forth in Schedule 4.16.
“Credit Card” means a Private Label Credit Card. 
“Credit Card Agreement” means each form of credit card agreement between Bank and a Cardholder, including credit card agreements assigned to Bank pursuant to any Purchase Agreement, governing the use of an Account, together with any amendments, modifications or supplements which now or hereafter may be made to such Credit Card Agreement (and any replacement of such agreement). 
“Credit Card Application” means the credit application which must be completed and submitted by individuals who wish to become Cardholders.
“Cross-Shopping” shall mean the acceptance of a Private Label Credit Card issued under this Agreement by a Retail Entity operating under a Company Licensed Mark different from the one appearing on the front of such Private Label Credit Card.
“Customer” shall mean any Person who makes purchases of Goods and/or Services at a Retail Entity or is otherwise identified by Company as a shopper in Company Channels.
“Customer Data” shall mean all Personally Identifiable Information regarding a Customer, that is obtained by Company or its Affiliates in connection with the Customer making a purchase of Goods and/or Services, enrolling for a Value Proposition or otherwise accessing Company Channels, including all transaction and experience information collected by Company or its Affiliates with regard to each purchase made by a Customer, including the item-specific transaction information collected by Company or its Affiliates about Cardholders through the use of a Credit Card or in connection with the Program.
“Designated Retailer” shall mean each of the entities identified on Schedule 3.7(a), as amended from time to time as provided therein.  

8

“Designated Subcontractor” shall mean a Subcontractor who provides services in relation to the Program and has or could reasonably have access to Cardholder Data or Customer Data.
“Development Agreement” has the meaning set forth in Schedule 9.3.
“Disclosing Party” has the meaning set forth in Section 11.1(d).
“Dispute” has the meaning set forth in Section 3.6(a).
“EBT” has the meaning set forth in Schedule 13.4.
“Effective Date” has the meaning set forth in the preamble. 
“Eighth Amendment” has the meaning set forth in the recitals hereto.
“Electronic Product” has the meaning set forth in Schedule 2.4.
“Enhancement Products” has the meaning set forth in Schedule 5.4. 
“Existing Issuer” means Comenity Bank or Comenity Capital Bank, as applicable.  
“Existing Issuer Agreements” has the meaning set forth in Schedule 12.1. 
“Existing Issuer Portfolio” has the meaning set forth in Schedule 12.1.                 
“Existing Receivables” has the meaning set forth in Schedule 15.2.
“Fifth Amendment” has the meaning set forth in the recitals hereto.
“First Accession Agreement” has the meaning set forth in the recitals hereto.
“First Amendment” has the meaning set forth in the recitals hereto.
“First Letter Agreement” has the meaning set forth in the recitals hereto.
“Force Majeure Event” has the meaning set forth in Section 17.18.
“Fourth Amendment” has the meaning set forth in the recitals hereto.
“GAAP” means United States generally accepted accounting principles, consistently applied.
“Goods and/or Services” means the products and services, including closed-loop prepaid cards, sold by or through Company Channels.
“Governmental Authority” means any federal, state, or local domestic, foreign, or supranational governmental or regulatory authority, agency, court, tribunal, commission, or other governmental or regulatory entity, including the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Trade Commission and NACHA (for purposes of Automated Clearing House transfers between Parties). 
“Holdback Amount” has the meaning set forth in Schedule 13.4.
“Initial Term” has the meaning set forth in Schedule 14.1.

9

“In-Store Payment” means any payment on an Account made in a Store by a Cardholder or a Person acting on behalf of a Cardholder.
“Indemnified Party” has the meaning set forth in Section 16.3(a).
“Indemnifying Party” has the meaning set forth in Section 16.3(a).
“Inserts” has the meaning set forth in Section 5.3(b).
“Insider Fraud” means, as applicable, any fraudulent activity of any employee or agent of Company or Bank, or any Affiliate, or Subcontractor of Company or Bank that is (i) identified and traceable back to such employee having access to any Cardholder Data or Customer Data (including a Party’s systems that have Cardholder Data or Customer Data) or any Transaction involving a Credit Card, (ii) fraud that is enabled through the provision of servicing activities by such employee by or on behalf of Bank or Company (such as processing Credit Card Applications or Transaction) on any Account and (iii) fraudulent activity involving Cardholder Data or Customer Data or any other data that was undertaken in the course of performing servicing by or on behalf of Bank or Company, in each case that originated within Company or Bank or any Affiliate or Subcontractor of Company or Bank, even if a specific employee cannot be identified.
“Instant Credit” means a Credit Card Application procedure for a Private Label Credit Card whereby the Credit Card Application information is communicated to Bank by Company either (i) verbally at the POS at the time of a transaction; or (ii) systemically during the order entry process.  
“Intellectual Property” means, on a worldwide basis, other than with respect to Company Licensed Marks, Bank Licensed Marks, Cardholder Data or Customer Data, any and all: (i) rights associated with works of authorship, including copyrights; (ii) trademarks and service marks and the goodwill associated therewith; (iii) trade secret rights; (iv) patents, designs, algorithms and other industrial property rights; (v) other intellectual and industrial property rights of every kind and nature, however designated, whether arising by operation of law, contract, license or otherwise; and (vi) applications, registrations, renewals, extensions, continuations, divisions or reissues thereof now or hereafter in force (including any rights in any of the foregoing).
“Jurisdictions” has the meaning set forth in Schedule 4.16.
“Justice Closing Date” has the meaning set forth in Schedule 1.1.                  
“Justice Conversion Date” has the meaning set forth in Schedule 1.1.                 
“Justice Extension” has the meaning set forth in Schedule 1.1.                 
“Justice Portfolio” means the Portfolio operated under the Tween Brands, Inc.’s “Justice” brand, and to the extent expanded to include “Brothers”, “Brothers” brand, including, as applicable, the Existing Issuer Portfolio operated under the “Justice” brand.
“Key Employees” has the meaning set forth in Section 2.5.
“Key Program Management Resources” has the meaning set forth in Section 3.2(b). 
“Knowledge” means, with respect to (i) Company, the actual knowledge of its Program Manager and Program Executive and (ii) Bank, the actual knowledge of its Program Manager and Program Executive, in each case after and assuming due inquiry. 

10

“Launch Plan” has the meaning set forth in Schedule 2.1.
“Licensee(s)” means any Person(s) authorized by Company or a Company Affiliate to operate in and sell Goods and/or Services from Company Channels or under the Company Licensed Marks.
“Losses” has the meaning set forth in Section 16.1.
“NDA” has the meaning set forth in Schedule 1.1.                 
“Net Sales” has the meaning as used by Company in its publicly filed quarterly and annual disclosures.
“New Account Terms” has the meaning set forth in Schedule 2.3.
“New Mark” has the meaning set forth in Sections 9.1(b), 9.2(b) and/or Schedule 9.3, as applicable.
“Nominated Purchaser” has the meaning set forth in Schedule 15.2.
“Operating Committee” has the meaning set forth in Section 3.3(a).
“Operating Procedures” means the Operating Procedures attached at Schedule 4.4, as amended from time to time in accordance with this Agreement. 
“Original Effective Date” has the meaning set forth in the recitals hereto.
“Original Program Agreement” has the meaning set forth in the recitals hereto.
“Other Conversion Dates” has the meaning set forth in Schedule 2.1. 
“Party” means Company or Bank, as the circumstances warrant, and “Parties” means both Company and Bank.
“Pending Claim” has the meaning set forth in Schedule 4.16.
“Person” means and includes any individual, partnership, joint venture, corporation, company, bank, trust, unincorporated organization, government or any department, agency or instrumentality thereof, and for purposes of the definition of “Change in Control”, the term shall include any group that is deemed to act together under Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended.
“Personally Identifiable Information” means any information that: (i) alone, or in combination with other personal or identifying information, relates to a specific, identifiable individual or can be used to identify an individual; (ii) is “nonpublic personal information” as defined in the GLBA; or (iii) any other personally identifiable consumer information that is subject to privacy protections under Applicable Law. 
“Portfolio” means the group of Accounts and Cardholder Indebtedness associated with each Company Licensed Mark.  
“Portfolio Purchase Date” has the meaning set forth in Schedule 15.2.         
“POS” means the physical point of sale of Goods and/or Services.
“Private Label Account” means an open-end revolving consumer credit account subject to the Program accessed via a Private Label Credit Card, including Purchased Accounts. 

11

“Private Label Credit Card” means the consumer credit card and/or associated card number, as appropriate in the context in which the term is used, issued under the Program that bears a Company Licensed Mark, settles directly between Company or its Affiliates and Bank, and may be used only to finance purchases of Goods and/or Services.
“Program” means the consumer credit card program established by Company and Bank and made available to Cardholders, including the origination of new Accounts by Bank, the extension of credit on Accounts, billings, collections, customer service, accounting between the Parties and all other aspects of the customized credit plan specified herein and in Credit Card Agreements. 
“Program Assets” means the Accounts (including Accounts charged off during the Term in which Bank retains an ownership interest), Account Documentation, Cardholder List, Cardholder Data and all Cardholder Indebtedness (in each case, whether held by Bank, Company or a Subcontractor).
“Program Conversion Date” has the meaning set forth in Schedule 1.1.         
“Program Executives” has the meaning set forth in Schedule 1.1.         
“Program Expense” has the meaning set forth in Schedule 1.1.                
“Program Manager” has the meaning set forth in Section 3.2(a).
“Program Materials” has the meaning set forth in Section 4.5(a).
“Program Privacy Policy Notice” shall mean the privacy policy notice and associated disclosures to be provided by Bank to Cardholders in connection with the Program, the initial form of which is attached hereto as Schedule 6.2(b) hereto.
“Program Website” has the meaning set forth in Section 4.13(a).
“Program Year” shall mean each consecutive twelve (12) month period commencing on the Program Conversion Date. 
“Protection Programs” has the meaning set forth in Schedule 5.4.
“Purchase Agreement” has the meaning set forth in Schedule 1.1.             
“Purchase Notice” has the meaning set forth in Schedule 15.2.
“Purchase Option” has the meaning set forth in Schedule 15.2.
“Purchased Account Terms” has the meaning set forth in Schedule 2.3.             
“Purchased Accounts” has the meaning set forth in Schedule 1.1.             
“Qualified Customers” means Customers of a Retail Entity that Company or such Retail Entity determines are available to be solicited for a Credit Card Application under the Program.
“Receiving Party” has the meaning set forth in Section 11.1(d).
“Refunds” has the meaning set forth in Schedule 4.16.

12

“Renewal Term” has the meaning set forth in Schedule 14.1.
“Restricted Party” has the meaning set forth in Section 2.5.
“Retail Entity” means any Affiliate of Company that operates a Company Channel. 
“Risk Management Policies” has the meaning set forth in Section 4.7(a).
“SEC” means the U.S. Securities and Exchange Commission.
“Second Amendment” has the meaning set forth in the recitals hereto.
“Second Letter Agreement” has the meaning set forth in the recitals hereto.
“Second Look Program” has the meaning set forth in Schedule 2.4.
“Separate Expenses” has the meaning set forth in Schedule 1.1.              
“Series I” has the meaning set forth in Schedule 14.1.    
“Series II” has the meaning set forth in Schedule 14.1.    
“Series II Initial Term” has the meaning set forth in Schedule 14.1.    
“Series II Renewal Term” has the meaning set forth in Schedule 14.1.    
“Seventh Amendment” has the meaning set forth in the recitals hereto.
“Similarly Situated” has the meaning set forth in Schedule 1.1.                  
“Sixth Amendment” has the meaning set forth in the recitals hereto.
“SLA” has the meaning set forth in Schedule 4.8(a).
“SLA Failure” has the meaning set forth in Schedule 4.8(a).
“SLA Termination Event” has the meaning set forth in Schedule 4.8(a).
“Solicitation Materials” means documentation, materials, artwork, copy, trademarks (excluding the Company Licensed Marks and the Bank Licensed Marks), copyrights and any protectable items, in any format or media (including television and radio), used to promote or identify the Program to Cardholders and potential Cardholders, including direct mail solicitation materials and coupons.
“Solvent” as to a Person, means (i) the present fair salable value of such Person’s assets is in excess of the total amount of its liabilities, (ii) such Person is presently able generally to pay its debts as they become due, and (iii) such Person does not have unreasonably small capital to carry on such Person’s business as theretofore operated and all business in which such Person is about to engage.  The phrase “present fair salable value” of a Person’s assets is intended to mean that value which can be obtained if the assets are sold within a reasonable time in arm’s-length transactions in an existing and not theoretical market.  
“SOX Laws” has the meaning set forth in Schedule 4.15.

13

“Store” means a physical location operating under a Company Licensed Mark for which Private Label Credit Cards are offered under this Agreement.
“Subcontractor” means a third party, including any authorized agent, vendor, consultant, or outsourced service provider, or any Affiliates of such third party, utilized by a Party to perform any obligations or services of such Party under this Agreement.
“Subset” has the meaning set forth in Schedule 1.1.                  
“Term” means, collectively, the Initial Term, each Renewal Term, the Series II Initial Term and each Series II Renewal Term. 
“Termination Period” has the meaning set forth in Schedule 1.1.                  
“Termination Date” has the meaning set forth in Schedule 4.16.
“Third Amendment” has the meaning set forth in the recitals hereto.                 
“Trademark Style Guide” means the written guidelines of a Party governing the manner of usage of the Company Licensed Marks or Bank Licensed Marks, as applicable.
“Transaction” means any purchase of Goods and/or Services through a Company Channel, including from a Licensee, using an Account, or a return or cancellation of the same. 
“United States” means the fifty states of the United States and the District of Columbia (expressly excluding for purposes of Credit Card solicitation and issuance but not Credit Card acceptance the Commonwealth of Puerto Rico, and any territory or possession of the United States or any political subdivision thereof).
“USPTO” means the United States Patent and Trademark Office.
“Value Proposition” means any Cardholder loyalty program offered in connection with the Program pursuant to the terms of this Agreement.
“Web Application” means a web-based new Account application procedure made available by Bank in connection with the Program. 
		
	1.2
	Miscellaneous.

As used herein,
		
	(a)
	all references to a plural form shall include the singular form (and vice versa),

		
	(b)
	unless otherwise specified, all references to days, months or years shall be deemed to be preceded by the word “calendar,”

		
	(c)
	all references to “herein,” “hereunder,” “hereinabove” or like words shall refer to this Agreement as a whole and not to any particular section, subsection or clause contained in this Agreement, 

		
	(d)
	all references to “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation,” 

14

		
	(e)
	all references to Applicable Law or agreements shall mean such Applicable Law or agreements as amended and in effect

		
	(f)
	where specific language is used to clarify or illustrate by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict the construction of the general statement which is being clarified or illustrated,

		
	(g)
	the construction of this Agreement shall not take into consideration the Party who drafted or whose representative drafted any portion of this Agreement, and no canon of construction shall be applied against a Party on the basis that such Party was the drafter, and 

		
	(h)
	unless the context otherwise requires or unless otherwise provided herein, all references in this Agreement to a particular agreement, instrument, or document also shall refer to all schedules or exhibits, renewals, extensions, modifications, amendments and restatements of such agreement, instrument, or document.

ARTICLE 2     
 
ESTABLISHMENT OF THE PROGRAM
		
	2.1
	Generally.

See Schedule 2.1.  
		
	2.2
	Credit Program.

		
	(a)
	See Schedule 2.2.  

		
	(b)
	Company shall, and shall cause its Affiliates to, actively, prominently and frequently promote the Program in each Company Channel, as appropriate for such Company Channel and in consultation with Bank.

		
	2.3
	Account Terms. 

		
	(a)
	See Schedule 2.3.  

		
	(b)
	Each Party may propose changes to the Account Terms in accordance with the procedures set forth in Sections 3.5 and 3.6; provided, however, that implementation of such changes to the Account Terms shall be made by Bank on Bank’s systems.  Bank shall utilize its commercially reasonable efforts to implement such Account Term changes within one hundred twenty (120) days from the final determination pursuant to Sections 3.5 and 3.6.

		
	2.4
	Exclusivity.

See Schedule 2.4.  
		
	2.5
	Non-Solicitation.  

During the Term and for a period of one (1) year thereafter, a Party and its Affiliates (the “Restricted Party”) shall not directly solicit, induce, recruit or encourage any of the employees of the other Party or its Affiliates who have the business title of Vice-President or above, with whom the Restricted Party shall have had any direct contact or whose work shall have become known to the Restricted Party, as the case may be, through 

15

his or her involvement in the Program (such employees, “Key Employees”), to leave their employment, or take away such employees, or attempt to solicit, induce, recruit, encourage, take away or hire Key Employees, for the Restricted Party; provided, however, that such restrictions shall not apply to any Key Employee (a) who contacts the Restricted Party in response to a bona fide public advertisement for employment placed by the Restricted Party and not specifically targeted at employees of the other party, (b) who has been terminated, subject to applicable restrictions set out in the  termination arrangement of such person, or (c) who contacts the Restricted Party directly or through referrals made by a placement service which was directed by the Restricted Party not to specifically target employees of the other Party.
		
	2.6
	Amendment and Restatement.

Effective as of the Effective Date, this Agreement hereby amends and restates the Original Program Agreement in its entirety. 
ARTICLE 3     
 
PROGRAM MANAGEMENT
		
	3.1
	Program Objectives.

In performing its responsibilities with respect to the management and administration of the Program, each Party shall be guided by the following Program objectives:
		
	(a)
	To enhance the retail and credit experience of Customers; 

		
	(b)
	To increase retail sales of Company;

		
	(c)
	To maximize Program economics while optimizing product value; and

		
	(d)
	To manage the Program in accordance with safe and sound banking practices. 

		
	3.2
	Program Managers; Other Program Management Resources. 

		
	(a)
	Company and Bank shall each appoint one Program manager (each, a “Program Manager”).  The Program Managers shall have substantial experience with retail credit card programs.  The Program Managers shall exercise day-to-day operational oversight of the Program and coordinate the interactions between Company and Bank.  Company and Bank shall endeavor to provide stability and continuity in the Program Manager positions.  The initial Program Managers for Company and Bank are set forth on Schedule 3.2(a).  Each Party may change its Program Manager from time to time upon notice to the other Party, subject to Section 3.2(b).  Unless otherwise set forth in this Agreement, the Program Managers shall be authorized to give any consent and/or approval under this Agreement on behalf of their respective Parties, but shall not have authority to amend this Agreement.  The appointment of any Program Manager by Bank is subject to the prior approval of Company.  Company shall have the right to request replacement of a Bank Program Manager in the event that such Bank Program Manager’s performance is unsatisfactory in the reasonable judgment of Company, including with regard to Bank Program Manager’s responsiveness and fit with Company culture, and Bank shall replace such Bank Program Manager if Bank determines in its reasonable judgment that the performance of such Bank Program Manager is unsatisfactory.  Without limiting the foregoing, Company shall raise any concerns it has 

16

about the Bank Program Manager with Bank, and Company and Bank shall consult in good faith to address such concerns.
		
	(b)
	Bank shall make available to the Program the resources identified on Schedule 3.2(b) (collectively, the “Key Program Management Resources”).  Bank shall endeavor to provide stability and continuity in its Key Program Management Resources.  Company shall have the opportunity to meet candidates that Bank has selected to serve as Key Program Management Resources.  Bank shall consider in good faith any comments or concerns raised by Company with respect to Key Program Management Resources Company in its decision whether to designate or replace Key Program Management Resources in connection with the Program, including with regard to their responsiveness and fit with Company culture.

		
	(c)
	The Parties shall work in good faith to establish by mutual agreement appropriate protocols to the extent reasonably necessary to facilitate the management of the Program.

		
	3.3
	Operating Committee.

		
	(a)
	The Parties hereby establish an Operating Committee (the “Operating Committee”), which shall act and be governed by the provisions of this Section 3.3.  The Operating Committee shall provide strategic guidance with respect to certain aspects of the Program as set forth in this Section 3.3 by majority vote, subject to the process set forth at Sections 3.5 and 3.6. 

		
	(b)
	The Operating Committee shall consist of six (6) members, three (3) to be designated by Company and three (3) to be designated by Bank, but Company and Bank each shall be entitled to one (1) vote in connection with any decision of the Operating Committee regardless of the number of members present for either Party.  Either Party may substitute one of its members upon reasonable prior notice.  As this Operating Committee is integral to Program governance, the Parties designated its members within sixty (60) days following the Original Effective Date, and its members shall be comprised of executive-level representation of the following divisions of each Party: Operations, Marketing, and Finance.  For clarity, the Bank Program Manager may also be one of the three (3) members designated by Bank.

		
	(c)
	On a quarterly basis, the Operating Committee shall meet to discuss the strategic direction and performance of the Program and Bank’s performance with respect to the SLAs.  The Operating Committee shall monitor and review Program activities, the financial performance of the Program, key portfolio performance data, activities of competitive programs, including terms, features and functionality of such credit card programs, performance of Key Program Management Resources, and market trends. 

		
	(d)
	On an annual basis, the Operating Committee shall meet for a planning session to review the Program’s business plan for the upcoming year, discuss Program changes, establish Program priorities and identify opportunities to share and implement best practices on behalf of the Program.

		
	(e)
	The Operating Committee also shall meet promptly upon the request of either Party.  Either Party may propose changes to the Program in connection with maintaining a competitive Program from a Cardholder perspective in accordance with the procedures set forth in Sections 3.5 and 3.6. 

17

		
	3.4
	Program Executives. 

On an annual basis, the Program Executives shall meet for a planning session to review the Program’s business plan for the upcoming year, discuss Program changes, establish Program priorities and identify opportunities to share and implement best practices on behalf of the Program.
		
	3.5
	Program Changes. 

Except as otherwise provided herein, changes to the Program, its operation or servicing shall be approved by the Operating Committee, and either Party may propose such changes, including to Program policies, in writing from time to time in accordance with the procedures set forth in this Section 3.5.  After a Party proposes a change, the Operating Committee shall have a minimum of thirty (30) days to review, meet and discuss the proposed change.  If the Operating Committee is unable to agree, they may determine to continue the Program unchanged or either Party may invoke the dispute resolution process set forth in Section 3.6; provided, however, in all cases, Bank may implement a change required by Applicable Law if the effective date of such change is prior to the completion of the dispute resolution process set forth in Section 3.6, subject to the standards set forth in Sections 3.6(d) and 4.5(b), and Schedule 4.4(b), 4.7, 4.12 and 6.2, for implementation of changes required by Applicable Law. 
		
	3.6
	Dispute Resolution Procedure.

		
	(a)
	In the event of any controversy or claim directly or indirectly arising out of or relating to this Agreement (each, a “Dispute”), the Program Managers and other appropriate personnel of each Party shall, in good faith, first attempt to resolve the Dispute, including for proposed changes to the Program in accordance with Section 3.5.  If such efforts are unsuccessful, the Program Managers shall refer the Dispute to the Operating Committee.  The Operating Committee shall, in good faith, then meet within ten (10) Business Days of such referral and attempt to resolve the Dispute.  If the Dispute remains unresolved for twenty (20) Business Days after such referral, the Operating Committee shall refer the Dispute to the Program Executives.  The Program Executives shall promptly meet to review and discuss the Dispute and shall use commercially reasonable efforts to resolve § Disputes involving compliance with Applicable Law, Risk Management Policies or risk-related matters within fifteen (15) days after receiving notice thereof, and § any other Dispute within thirty (30) days after receiving notice thereof. 

		
	(b)
	In the event the Program Executives are unable to resolve the Dispute within the time frames set forth in Section 3.6(a) after receiving notice of such escalation, then, § if the matter is a Company Matter or a Bank Matter, the Dispute shall be resolved as set forth in Section 3.6(c) or 3.6(d) at the end of such period, and § if the matter is not a Company Matter or a Bank Matter, the Dispute shall remain open and the then-current practice shall continue until the Parties mutually agree otherwise; provided, however, that for a Dispute involving Applicable Law that is not resolved within the time frames set forth in Section 3.6(a), Bank shall, upon the request of Company, evaluate the possibility of addressing the issue with the relevant Government Authority, but shall have no obligation to do so before resolving the Dispute as a Bank Matter. 

		
	(c)
	Company shall have ultimate decision-making authority with respect to unresolved Disputes with respect to the matters in Schedule 3.6(c) (“Company Matters”), subject in each case to prior review through the processes set forth in this Section 3.6 and to Bank’s 

18

rights with respect to compliance of the Program with Applicable Law, including as set forth in Section 3.6(d) and as noted in Schedule 3.6(c).
		
	(d)
	Bank shall have ultimate decision-making authority with respect to unresolved Disputes with respect to the matters in Schedule 3.6(d) (“Bank Matters”), subject to prior review through the processes set forth in this Section 3.6; provided, however, that any changes made pursuant to this Section 3.6 shall be implemented by Bank in a manner reasonably consistent across all of Bank’s Similarly Situated credit card portfolios; and provided, further, that, with respect to Program changes required for compliance with Applicable Law, Bank shall consider alternative methods for achieving compliance, including those proposed by Company, and to the extent practicable and commercially reasonable taking into account relative costs to Bank and Company, select the method that is least burdensome to Company and involves the least impact to Company systems, in-Store processes and Customers.

		
	(e)
	Notwithstanding anything herein, neither this Section 3.6 nor Section 17.22 shall affect a Party’s right to terminate this Agreement pursuant to Schedule 14.2 or 14.3 and neither Party shall have an obligation to utilize the dispute resolution procedures set forth in Section 3.6(a), 3.6(b) or 17.22 in connection with a Dispute involving Company Licensed Marks, Bank Licensed Marks or Intellectual Property. Nothing in this Section 3.6 or Section 17.22 shall be construed to prevent any Party from seeking from a court a temporary restraining order or other temporary or preliminary relief pending final resolution of a Dispute.

		
	3.7
	Firewalls.

		
	(a)
	Except as otherwise approved by Company in writing, the Key Program Management Resources shall not provide any services to or support for any co-branded or private label credit card program that is or may be offered by Bank on behalf of or in association with any Designated Retailer set forth in Schedule 3.7(a) during the period when such Key Program Management Resource is providing services or support to the Program and for a period of twelve (12) months after such Key Program Management Resource ceases to be actively involved in the Program.

		
	(b)
	See Schedule 3.7(b).  

19

ARTICLE 4     
 
PROGRAM OPERATION
		
	4.1
	Ownership of Accounts.

		
	(a)
	Subject to Company’s option to purchase the Program Assets under Schedule 15.2, Bank shall be the sole and exclusive owner of the Accounts and Account Documentation, and shall have all rights, powers, and privileges with respect thereto as such owner; provided that Bank shall exercise such rights consistent with its obligations under this Agreement.  All Transactions in connection with the Accounts and the Cardholder Indebtedness shall create the relationship of debtor and creditor between the Cardholder and Bank, respectively.  Company acknowledges and agrees that § it has no right, title or interest (except for its right, title and interest in the Company Licensed Marks and its option to purchase the Program Assets under Schedule 15.2) in or to, any of the Accounts or the Account Documentation related to such Accounts or any proceeds of the foregoing, and § Bank extends credit directly to Cardholders. 

		
	(b)
	Except as expressly provided herein, Bank shall be entitled to § receive all payments made by Cardholders on Accounts, and § retain for its account all Cardholder Indebtedness and such other fees and income authorized by the Credit Card Agreements and collected by Bank with respect to the Accounts and the Cardholder Indebtedness. 

		
	4.2
	Certain Company Responsibilities.Without limitation of Company’s other obligations under this Agreement, Company agrees, in each case in accordance with the terms and conditions of this Agreement:

		
	(a)
	To implement its obligations under the Conversion Plan and Launch Plan.

		
	(b)
	To actively, prominently and frequently promote the Program and encourage the establishment and use of Accounts at Company Channels in the United States, in each case as appropriate for the respective Company Channel and in consultation with Bank. 

		
	(c)
	To integrate training with respect to the Program into Company’s schedule and materials for the training of Store personnel. 

		
	(d)
	To comply with the terms of the Program Privacy Policy Notice and all Cardholder opt-outs.

		
	(e)
	To maintain an advertisement that promotes the Program on the home page of each website Company Channel and contains an embedded, direct link (with no intermediate links other than a splash page approved by the Operating Committee) to the Program Website. 

		
	(f)
	To review any Account Documentation that is prepared by Bank for distribution to Applicants or Cardholders.

		
	(g)
	To distribute to Stores in the United States Credit Card Applications, Cardholder Agreements, Program Privacy Policy Notices and required legal disclosures (approved by Bank) incorporated in the foregoing. 

20

		
	(h)
	Subject to the U.S. dollar denomination requirements in Section (i) of Schedule 2.4, to accept the Credit Cards in payment for Transactions at all Company Channels in the United States, and at Company’s option, in Canada.

		
	(i)
	To process In-Store Payments and transmit the proceeds to Bank in accordance with the Operating Procedures.

		
	(j)
	To maintain adequate computer and communications systems and other equipment and facilities necessary or appropriate in connection with the Program.  

		
	(k)
	To provide Bank, upon its request, a list of all Licensees with respect to each Company Licensed Mark covered by this Agreement.

		
	(l)
	To establish and maintain effective controls to confirm compliance with the terms of this Agreement by its Affiliates and Subcontractors.

		
	(m)
	To follow written guidance from Bank with regard to compliance of the Program with Applicable Law as specifically provided in this Agreement.  

		
	4.3
	Certain Bank Responsibilities.Without limitation of Bank’s other obligations under this Agreement, Bank agrees, in each case in accordance with the terms and conditions of this Agreement:

		
	(a)
	To implement its obligations under the Conversion Plan and Launch Plan.

		
	(b)
	To review and process Credit Card Applications and to provide real time, immediate decisioning and extension of credit to approved Customers for real time purchases by such Customers in accordance with the Risk Management Policies and this Agreement.

		
	(c)
	To issue Credit Cards, extend credit on Accounts and fund Cardholder Indebtedness in accordance with the Risk Management Policies and Applicable Law.

		
	(d)
	To provide the Key Program Management Resources. 

		
	(e)
	To prepare Account Documentation relating to an Account and distribute an adequate supply of Credit Card Applications, Cardholder Agreements, Program Privacy Policy Notices and required legal disclosures incorporated in the foregoing to the Stores in the United States. 

		
	(f)
	To comply with the terms of the Cardholder Agreements, the Program Privacy Policy Notice and all Cardholder opt-outs.

		
	(g)
	To authorize or deny requests for authorization of Transactions.

		
	(h)
	To fund all Cardholder Indebtedness under the Private Label Accounts.

		
	(i)
	To settle Transactions to Company in accordance with Section 7.3.

		
	(j)
	To process remittances from Cardholders.

		
	(k)
	To prepare, process and mail (including by e-mail) Billing Statements and Applicant and Cardholder correspondence, and, subject to Section 5.3(b), mail Inserts provided by Company. 

21

		
	(l)
	To maintain adequate computer and communications systems and other equipment and facilities necessary or appropriate for servicing the Accounts.

		
	(m)
	To provide appropriate field support and training for Retail Entity sales associates as reasonably requested by the Company or a Retail Entity and reasonably agreed to by Bank.  All expenses incurred by Bank in connection with such field support and training shall be treated as a Program Expense.

		
	(n)
	To ensure that the Account Documentation created or furnished by Bank (excluding any materials or artwork provided by Company) and used in connection with the Program comply with Applicable Law.

		
	(o)
	To provide such support services as are necessary to ensure that Bank can operate the Program in accordance with the requirements applicable to Bank hereunder.

		
	(p)
	To establish and maintain effective controls to confirm compliance with the terms of this Agreement by its Affiliates and Subcontractors.

		
	(q)
	To monitor and notify Company of Applicable Law and changes therein that require or limit Company actions in relation to the Program.

		
	(r)
	To operate the Program in compliance with Applicable Law.

		
	4.4
	Operating Procedures.

		
	(a)
	Bank and Company each shall comply in all material respects with the Operating Procedures, and the Parties acknowledge and agree that, other than Bank’s obligation to confirm that the Operating Procedures comply with Applicable Law, for purposes of this Agreement, material compliance with the Operating Procedures shall be the Parties’ standard of care for compliance with the Operating Procedures.  

		
	(b)
	See Schedule 4.4(b).   

		
	4.5
	Materials Developed and Used in Connection with the Program. 

		
	(a)
	Bank shall be responsible for the content of all Credit Card Applications, Cardholder Agreements, Program Privacy Policy Notices and required legal disclosures used in connection with the Program; provided that Company shall have the right to review and approve the foregoing for design, format and use of the Company Licensed Marks.  Company shall be responsible for the content, design and format of all Solicitation Materials, Credit Cards (both front and back), and advertising copy and scripts; provided that all content shall be consistent with Risk Management Policies governed by Section 4.7 and Collections Policies governed by Section 4.11, and Bank shall have the right to review and approve the foregoing to ensure that all documents and materials referenced in this Section 4.5 (the “Program Materials”) comply with Applicable Law.  

		
	(b)
	Prior to the Program Conversion Date, the Parties shall review and approve all Program Materials in accordance with Section 4.5(a).  Company shall provide Bank an opportunity to review any new Program Materials and any changes to existing Program Materials for compliance with Applicable Law and Bank shall review and approve such documents and materials within five (5) Business Days from receipt by Bank; provided, however, that 

22

Company shall not use such new or revised Program Materials until affirmatively approved by Bank.  Upon request of Bank, Company shall provide an opportunity for Bank review regardless of whether or not Bank has previously approved such Program Material.  Prior to Company exercising any other remedies available under this Agreement, any failure of Bank to comply with the second sentence of this Section 4.5(b) shall be promptly reviewed by the Operating Committee and subject to escalation in accordance with Section 3.6. 
		
	(c)
	Company Licensed Marks shall appear prominently on the face of the Credit Cards.  The face of the Credit Cards shall not bear Bank’s Licensed Marks or Bank’s name.  Subject to Applicable Law, Bank’s name but no other trademarks or service marks of Bank or any third party may appear on the back of the Private Label Credit Cards.  

		
	4.6
	Applications for Credit Under the Program. 

		
	(a)
	Applicants who wish to apply for an Account under the Program must submit a completed Credit Card Application on a form or in an electronic format provided by or approved by Bank, and Bank shall approve or deny the request for credit based solely upon the Risk Management Policies.  In the case of in-store Credit Card Applications, the Retail Entities shall (i) provide a copy of the Credit Card Agreement to the Applicant, and (ii) follow any applicable Operating Procedures.  When facilitating any other method of application, Company shall use commercially reasonable efforts to ensure that Company Channels follow all applicable Operating Procedures.  The Credit Card Application shall be submitted to Bank by the Applicant or submitted by the Retail Entities on behalf of the Applicant, as required in the Operating Procedures. 

		
	(b)
	If Bank approves a Credit Card Application, Bank will issue a Credit Card to the Applicant to access an individual line of credit in an amount determined by Bank.  For Instant Credit, Bank will issue an account number which may be utilized by the Cardholder for purchases of Goods and/or Services at the time of approval and prior to the issuance of the Credit Card. 

		
	(c)
	Bank shall make available the forms of Credit Card Applications specified in the Operating Procedures.  Company shall provide such forms to Applicants, including any required disclosures as determined by Bank, in each case in accordance with the Operating Procedures.

		
	4.7
	Credit Underwriting and Risk Management. 

		
	(a)
	The Parties shall each comply with their respective obligations according to the risk management policies, procedures and practices for the Program including policies, procedures and practices for Account origination, Transaction authorization, credit line assignment and management (including line increases and over-limit decisions), Account closures, payment crediting, anti-money laundering, identity theft, charge-offs and fraud management, and Collections Policies (collectively, “Risk Management Policies”), all of which shall comply with Applicable Law. 

		
	(b)
	Bank shall periodically review the performance of the Program with Company as requested by Company, and shall provide Company with reasonable access to model output and modeling support including cardholder attrition models, prospect-marketing models and other tools designed to improve Program performance and evaluate the Risk Management 

23

Policies and changes thereto; provided, however, that notwithstanding the foregoing, under no circumstances shall Bank be required to provide any proprietary information or scoring models of any kind.
		
	(c)
	See Schedule 4.7.

		
	4.8
	Servicing of Accounts by Bank.   

		
	(a)
	Bank shall, directly or through an Affiliate or a Subcontractor, be responsible for (i) customer service, except to the extent specifically allocated to Company hereunder, (ii) administration of the Accounts in accordance with the terms of the Account Documentation and this Agreement, (iii) performing its obligations under this Agreement in accordance with the SLAs as set forth in Schedule 4.8(a), and (iv) providing as reasonably determined by Bank, trained personnel as are necessary or appropriate for servicing the Accounts. Bank shall consult with Company regarding the management of the customer service function and shall provide Company reasonable access to enable review of and provision of input regarding customer service activities as provided in Section A.vi of Schedule 4.8(a) and the Operating Procedures.  Bank shall consider Company’s input in good faith, and shall use commercially reasonable efforts to incorporate such input to the extent permitted by Applicable Law.

		
	(b)
	See Schedule 4.8.  

		
	(c)
	A “SLA Failure” and a “SLA Termination Event” will be determined in accordance with Schedule 4.8(a).  

		
	(d)
	Customer service shall be Retail Entity-branded to the extent practicable and subject to Applicable Law; provided, however, that Bank shall have the right to take whatever steps and make such disclosures necessary to ensure that Bank is understood by the Cardholders to be the creditor on the Accounts. 

		
	(e)
	Notwithstanding any arrangement whereby Bank provides services set forth herein through an Affiliate, Subcontractor or other third party, Bank shall remain obligated and liable to Company for the provision of such services without diminution of such obligation or liability by virtue of such arrangement. 

		
	4.9
	In-Store Payments.

Company is hereby authorized to receive payments on Accounts in Stores in the United States.  The Parties shall process In-Store Payments in accordance with the Operating Procedures.  Bank has the sole right to receive and retain all payments made with respect to all Accounts and to pursue collection of all amounts outstanding, unless a Transaction is charged back to Company pursuant to the provisions of Section 4.10 (in which event Company and not Bank shall have the right to pursue such collection). 

		
	4.10
	Chargebacks.

Transactions on Accounts shall be subject to chargeback solely as provided in the Operating Procedures.  With respect to any amounts to be charged back, Bank will offset such amount as part of the Transaction settlement to be paid to Company, to the extent the balance thereof is sufficient, or, if such balance is not sufficient, Company shall pay to Bank in immediately available funds for the full or any partial amount of 

24

such chargeback.  Upon payment in full of the related amount by Company to Bank, or off-setting, as the case may be, Bank shall transfer to Company, without any representation, warranty, or recourse, all of Bank’s right to payments of such amounts charged back in connection with such Transaction.  Bank will cooperate with Company in any efforts by Company to collect the chargeback amount.  Bank will provide Company reasonable supporting documentation relating to any chargeback.  Bank may reduce the amount owed by a Cardholder on any Transaction subject to chargeback, but the related chargeback shall then be equal to the reduced (or net) amount owed by the Cardholder.
		
	4.11
	Collections.  

		
	(a)
	Bank shall be solely responsible for and shall handle all stages of collections of Accounts in accordance with Bank policies, procedures and practices for the Program with respect to collections, account closures, charge-offs, recoveries, contact strategies (including dialer intensity and frequency) and similar matters (the “Collections Policies”).  In connection with the Conversion Plan and Launch Plan activities, Bank shall discuss the Collections Policies with Company and shall consider in good faith Company suggestions for improvements and modifications to the Collections Policies.  Company may propose changes to the Collections Policies from time to time in accordance with the procedures set forth in Sections 3.5 and 3.6.  Company hereby authorizes Bank, or any of its employees or Subcontractors, to endorse “Capital One, National Association” upon all or any checks, drafts, money orders, or other evidence of payment, made payable to Company or a Retail Entity and intended as payment on an Account, that may come into Bank’s possession from Cardholders and to credit said payment against the appropriate Cardholder’s Account.

		
	(b)
	See Schedule 4.11(b).  

		
	4.12
	Systems. 

See Schedule 4.12.      
		
	4.13
	Program Website.

		
	(a)
	Bank shall maintain one or more websites for Cardholders and potential Cardholders branded with the Company Licensed Marks (“Program Website”) in accordance with the Operating Procedures and shall be responsible for the security thereof.  The Program Website shall be accessible by means of links from such website pages of Company’s Retail Entities as Company shall determine from time to time and shall: § require authorization to access the secure portions of the website; and § contain or otherwise be associated with only such material and links as Company shall determine in its discretion, subject to Applicable Law.  Bank shall ensure that a link to the Program Privacy Policy Notice is posted on the Program Website.  The features and functionality of the Program Website shall be as set forth in the Operating Procedures.

		
	(b)
	Bank represents and warrants that, to integrate and maintain the Web Application, to ensure access to the Bank’s designated website, and to reduce technical errors, Bank will use commercially reasonable efforts to ensure that Bank’s software providing the Web Application will function, and continue to function, in a sound technical manner.  Bank shall appropriately monitor the Web Application and the Program Website to ensure proper functioning.  In the event Bank changes or otherwise modifies the website address for the Program Website, Bank will provide at least thirty (30) days prior written notice and 

25

Company will either update or modify its website thereto, as directed by Bank, and shall be reimbursed for the cost thereof as a Program Expense.  In providing a link to the Web Application on one or more of the Retail Entities’ websites, if appropriate, the applicable Retail Entity shall make it clear and conspicuous that the Customer is leaving the Retail Entity’s website and is being directed to Bank’s website for the exclusive purpose of accessing Bank’s website.  Company agrees that, in connection with the Web Application, Company and its Retail Entities will use Bank’s name, or any logo, statements, or any other information that is related to Bank, only as directed by Bank, or as previously approved by Bank in writing.  Without limiting the generality of the scope of required approvals, but by way of example, Company shall seek Bank’s approval, not to be unreasonably withheld, not only with respect to content, but also with respect to any typestyle, color or abbreviations used in connection with the Web Application. 
		
	4.14
	Bank Reports and Notices. 

As long as this Agreement remains in effect, Bank shall deliver to Company the reports listed in the Operating Procedures, in addition to any other reports expressly required under this Agreement.  Additions to such reports or changes to the timing of the delivery of such reports shall be subject to Operating Committee approval.  Bank agrees to review reasonable requests from Company and provide ad hoc data support and analysis reasonably requested by Company as it relates to the Program. 
		
	4.15
	Sarbanes-Oxley Compliance. 

See Schedule 4.15.      
		
	4.16
	Sales Taxes and Related Record Retention.    

Company shall pay when due any sales taxes related to the sale of Goods and/or Services.  The procedures to address claims for tax refunds and credits related to charged off receivables are set forth as Schedule 4.16 of this Agreement.
		
	4.17
	Reciprocal Access and Audit Rights.  

 See Schedule 4.17.
		
	4.18
	Insider Fraud Prevention.   

		
	(a)
	Unless prohibited by Applicable Law, Company shall report to Bank any instances of known or suspected Insider Fraud, within three (3) Business Days after it has detected known Insider Fraud or substantiated suspected Insider Fraud.  Company shall provide all assistance reasonably requested by Bank for its review of any actual or potential Insider Fraud activity, and make available to Bank such data, records, systems, processes, and other information, including employment records to the extent permitted by Applicable Law, as Bank believes in good faith to be necessary or relevant to Bank’s investigation of the incident and to permit Bank to submit suspicious activity reports pursuant to Bank’s regulatory obligations.

		
	(b)
	In the event a Bank investigation confirms Insider Fraud, unless prohibited by Applicable Law, Bank shall notify Company of the nature of the Insider Fraud, including the manner in which the Insider Fraud occurs, and take appropriate remedial measures as determined by Bank in its reasonable discretion. 

26

ARTICLE 5     
 
MARKETING OF THE PROGRAM
		
	5.1
	Company Responsibility to Market the Program.

		
	(a)
	Company shall be primarily responsible for marketing the Program and shall cause its Retail Entities to actively, prominently and frequently market the Program in Company Channels to promote its growth and viability.  Company shall make all marketing decisions in its discretion, including the design of the Program, product and any Value Proposition features, card and collateral design, addition of marketing channels and other details of the Program, subject to Bank’s rights set forth in Section 3.6 and Section 4.5. 

		
	(b)
	Company’s Program Marketing obligations shall include the following for each of Company’s Retail Entity brands:

		
	(i)
	Subject to Section 3.6 and Section 4.5, Company shall from time to time solicit Qualified Customers to participate in the Program;

		
	(ii)
	Establish an annual plan to invest the Fixed Marketing Fund (as defined in Schedule 8.1) in credit marketing related activities that are targeted to achieve a minimum retail margin and/or credit-income return on investment, such as those focused on Customer groups (e.g., new Customers, reactivated Customers);

		
	(iii)
	Integrate credit marketing with its core marketing communication strategy; and

		
	(iv)
	Establish an overall annual credit marketing plan which shall consider in good faith input from Bank.

		
	(c)
	See Schedule 5.1.

		
	(d)
	Bank shall use commercially reasonable efforts to systematically support such Value Proposition without charge to the Program if such support can be implemented on Bank’s then-existing systems.  The costs of System changes to support the Value Proposition shall be governed by Schedule 4.12.  Upon request by Company, and to the extent available, Bank shall provide Company with certain system functionality tied to the Accounts to support the Value Proposition, for matters such as recording the accumulation of loyalty points, tracking, lookup/reporting and redemption where a coupon is part of the Billing Statement.  Any out-of-pocket expenses incurred by Bank in connection with such activity shall be deemed Program Expenses.

		
	(e)
	Subject to Section 3.6, Company may, in its discretion, offer other ancillary benefits or incentives to Cardholders or Customers from time to time.

		
	5.2
	Bank’s Responsibility to Market the Program. 

		
	(a)
	Bank shall, in accordance with the terms of this Agreement, promote the Program, and use commercially reasonable efforts to improve Program performance, and the use of Credit Cards to purchase Goods and/or Services, in all cases in compliance with Applicable Law and Bank’s or its Affiliate’s agreements with third parties.  In connection with such efforts, as reasonably requested by Company, Bank shall § conduct marketing research and other 

27

related marketing efforts on behalf of Company based upon the customer databases and customer database analysis tools maintained by or on behalf of Bank and its Affiliates and Subcontractors, including aggregate transaction and experience data across Bank’s credit card portfolios (with any third party costs funded by the Fixed Marketing Fund (as defined in Section 1.e. of Schedule 8.1)); § make suggestions regarding available systems technology to improve effectiveness of the Value Proposition and enhance sales, provided that any additional costs associated with implementing any changes to systems technology shall be Program Expenses; and § provide results of Bank’s modeling and market research, in each case to the extent permitted by Applicable Law and contractual obligations of Bank and its Affiliates; provided, however, that notwithstanding the foregoing, under no circumstances shall Bank be required to provide any proprietary information or scoring models of any kind. 
		
	(b)
	At Company’s option, Bank shall work with Company’s Retail Entities, in good faith, to identify marketing opportunities within Bank’s franchise to promote the Goods and/or Services of the applicable Retail Entities, and offer joint marketing opportunities with Bank’s other non-competing products and services.  The Parties shall execute any such marketing campaigns upon terms and conditions mutually agreed upon by the Parties.

		
	5.3
	Communications with Cardholders.

		
	(a)
	Bank Communication.  Bank may communicate with Cardholders, through statement inserts, statement messages or otherwise, including, to the extent reasonably available, the use of bangtails, as reasonably necessary to service the Accounts or as required by Applicable Law.  Notwithstanding anything to the contrary in this Section 5.3, any such communication by Bank that is required by Applicable Law shall take precedence over any or all communications provided by Company.

		
	(b)
	Company Inserts.  Subject to Applicable Law, Section 5.3(a) and Bank’s system specifications, Company shall have the exclusive right to communicate with Cardholders through use of inserts, fillers and other means made available by Bank (collectively, “Inserts”), including Inserts selectively targeted for particular classes of Cardholders, in any and all Billing Statements (including print and electronic Billing Statements).  Notwithstanding the foregoing, any Insert required by Applicable Law shall take precedence over any Company Inserts and shall be the responsibility of Bank.  Company shall be responsible for the content and “look and feel” of, and the cost of preparing and printing any Inserts, excluding Inserts required by Applicable Law, and the increased cost of postage caused by such Insert shall be treated as a Program Expense. 

		
	(c)
	Billing Statement Messages.  Subject to Applicable Law, Section 5.3(a) and Bank’s systems specifications, Company shall have the exclusive right to use Billing Statement messages and Billing Statement envelope messages in each Billing Cycle to communicate with Cardholders.  Notwithstanding the foregoing, the following messages shall take precedence over any Company messages: § any message required by Applicable Law, and § collection and/or customer service messages.  Company shall be responsible for preparing the content of all Billing Statement messages, excluding those set forth in clauses (i) and (ii) which shall be Bank’s responsibility.

		
	(d)
	Other Communications.  Subject to Applicable Law including Cardholder opt-out rights, Section 5.3(a) and Bank’s systems specifications, Company shall have the exclusive right 

28

to communicate with Cardholders through direct mail (including through catalogs, invitations, newsletters, and postcards), e-mail, telephone messaging, text messaging, and any other communication channel that Company deems appropriate.  Company may communicate with Cardholders through these channels about any aspect of the Program, including any Value Proposition, and any other subject matter, in Company’s discretion, subject to Applicable Law.  
		
	(e)
	Substance of Communications.  Subject to Applicable Law, Company may use the methods of Cardholder communication described in this Section 5.3 to promote the Program, Goods and/or Services, and any other products or services in Company’s discretion.  

		
	(f)
	Bank Review.  For the avoidance of doubt, all Company communications pursuant to this Section 5.3 related to the Program shall be deemed Program Materials and subject to Bank review as set forth in Section 4.5(a).  Company communications to its customer base which may include Cardholders (i.e. not just specifically targeted to Cardholders) that do not mention the Credit Cards or the Program shall not be Program Materials and shall not be subject to Bank review.

		
	5.4
	Protection Programs and Enhancement Products.  

See Schedule 5.4.      
ARTICLE 6     
 
CARDHOLDER AND CUSTOMER INFORMATION
		
	6.1
	Customer Information.

See Schedule 6.1.      
		
	6.2
	Cardholder Data.

See Schedule 6.2.      
		
	6.3
	Customer Data.

See Schedule 6.3.      
		
	6.4
	Data Security.

See Schedule 6.4.      
ARTICLE 7     
 
MERCHANT SERVICES
		
	7.1
	Honoring Credit Cards. 

		
	(a)
	Company agrees that Company’s Retail Entities will honor any Credit Card and/or Account properly issued and authorized by Bank under the Program at the Company Channels to which Credit Cards and/or Accounts relate inside the United States and, at Company’s option, in Canada in accordance with Schedule 2.4. 

29

		
	(b)
	The Parties shall support Cross-Shopping to the extent provided in the Operating Procedures and supported by Bank’s systems.  Bank represents that its systems can accept Cross-Shopping Transactions to the extent that the relevant Company Channel is able to transmit such Transactions to Bank in the same format as Transactions that are not Cross-Shopping Transactions.

		
	7.2
	Transmittal and Authorization of Charge Transaction Data.

		
	(a)
	The Retail Entities shall electronically transmit all Charge Transaction Data to Bank in accordance with the Operating Procedures. 

		
	(b)
	Bank shall authorize or decline Transactions on a real time basis, including Transactions involving split-tender (i.e., a portion of the total transaction amount is billed to a Credit Card and the remainder is paid through one or more other forms of payment). 

		
	7.3
	Settlement Procedures.

Bank will settle Transactions charged to Private Label Accounts as set forth in the Operating Procedures, without discount. 
		
	7.4
	Returns of Goods and/or Services.

If a Cardholder purchases Goods and/or Services on an Account and a Retail Entity processes a return of such Goods and/or Services in accordance with the return policy of such Retail Entity or makes another adjustment such as a price reduction, the relevant Retail Entity shall provide a credit to such Cardholder’s Account.  The relevant Retail Entity will transmit the relevant information in the Charge Transaction Data for inclusion in the daily settlement process. 
ARTICLE 8     
 
PROGRAM ECONOMICS
		
	8.1
	Monthly Statement of Bank.

		
	(a)
	See Schedule 8.1. 

		
	(b)
	Bank may include in the monthly statement any other amounts owed between the Parties as explicitly provided for herein or as otherwise agreed by the Parties in writing with line item specificity, which amounts may be netted.

		
	8.2
	Compensation.

See Schedule 8.2.      
ARTICLE 9     
 
LICENSING OF TRADEMARKS; INTELLECTUAL PROPERTY
		
	9.1
	The Company Licensed Marks.

		
	(a)
	Grant of License to Use the Company Licensed Marks.  Company and its Affiliates hereby grant to Bank a non-exclusive, royalty-free, non-transferable, non-sublicensable (except 

30

as specified in this Section 9.1) right and license to use the Company Licensed Marks in the United States solely in connection with the creation, establishment, marketing and administration of, and the provision of services related to, the Program, all pursuant to, and in accordance with, this Agreement and any applicable Trademark Style Guide. Those services shall include the issuance and reissuance of Credit Cards, the provision of Billing Statements and other correspondence relating to Accounts, the extension of credit to Cardholders, and the advertisement or promotion of the Program.  All use of the Company Licensed Marks shall be approved by Company.  The license hereby granted is solely for the use of Bank and may be used as necessary to permit the exercise by Bank of any of its rights under this Agreement to delegate obligations to Affiliate(s) and/or Subcontractors.  Bank may sublicense the use of Company Licensed Marks to any Affiliate or Subcontractor performing the following Bank obligations under this Agreement solely as necessary to perform such obligations:   production of plastics, statements and other Cardholder correspondence and collections; provided that such Affiliate or Subcontractor agrees to comply with all of the standards specified herein and the limitations on the use of the Company Licensed Marks contained in this Section.  Except for the rights granted to Bank in the preceding sentence, the license granted hereby may not be sublicensed without the prior written approval of Company.
		
	(b)
	New Marks.  If Company or its Affiliates adopt a trademark, trade name, service mark logo or other proprietary mark which is used by Company or its Affiliates in connection with the Program but which is not listed on Schedule C (a “New Mark”), Company, upon written notice to Bank, may add such New Mark to Schedule C.  If Bank requests that Company add a New Mark to Schedule C and license its use hereunder, Company may do so in its sole discretion, and any New Mark requested by Bank and agreed by Company shall be added to Schedule C by amendment of this Agreement. 

		
	(c)
	Termination of License.  The license granted in this Section with respect to any Company Licensed Mark shall terminate six (6) months after the later of § the Portfolio Purchase Date related to such Company Licensed Mark or § termination of this Agreement with respect to the relevant Portfolio.  Upon such termination of this license, as provided in this Section 9.1(c), all rights of Bank to use the Company Licensed Mark(s) shall terminate, the goodwill connected therewith shall remain the property of Company and its Affiliates, and Bank shall: (A) discontinue immediately all use of the Company Licensed Mark(s), or any of them, and any colorable imitation thereof; and (B) delete the Company Licensed Mark(s) from or, at Bank’s option, destroy all unused Credit Cards, Account Documentation, periodic statements, materials, displays, advertising and sales literature and any other items bearing any of the Company Licensed Mark(s). During the six (6) month period referenced above, Bank may use the Company Licensed Mark(s) in accordance with this Agreement only as necessary to effect the relevant transition associated with clause (i) or (ii).  Notwithstanding the foregoing, Bank shall be expressly permitted to continue to use Company Licensed Marks after termination of the aforementioned license provided such use constitutes nominative fair use under the Lanham Act (15 U.S.C. §1501 et seq.) or common law.

		
	(d)
	Ownership of the Company Licensed Marks.  Bank acknowledges that § the Company Licensed Marks, all rights therein, and the goodwill associated therewith, are, and shall remain, the exclusive property of Company and its Affiliates, § it shall take no action which will adversely affect Company and its Affiliates’ exclusive ownership of the Company 

31

Licensed Marks, or the goodwill associated with the Company Licensed Marks (it being understood that the collection of Accounts, adverse action letters, and changes in terms of Accounts as required by Applicable Law do not adversely affect goodwill, if done in accordance with the terms of this Agreement), and § any and all goodwill arising from use of the Company Licensed Marks by Bank shall inure to the benefit of Company and its Affiliates. Nothing herein shall give Bank any proprietary interest in or to the Company Licensed Marks, except the right to use the Company Licensed Marks in accordance with this Agreement, and Bank shall not contest Company’s or its Affiliates’ title in and to the Company Licensed Marks.
		
	(e)
	Infringement by Third Parties.  Bank shall notify Company, in writing, in the event that it has Knowledge of any infringing use of any of the Company Licensed Marks by any third party.  If any of the Company Licensed Marks is infringed, Company alone has the right, in its sole discretion, to take whatever action it deems necessary to prevent such infringing use; provided, however, that if Company fails to take reasonable steps to prevent infringement of the Company Licensed Marks and such infringement has or is reasonably expected to have an adverse effect upon the Program or the rights of Bank hereunder, Bank may request that Company take action necessary to alleviate such adverse impact.  Consideration of the Bank’s request is at the Company’s sole discretion.  Bank shall reasonably cooperate with and assist Company, at Company expense, in the prosecution of those actions that Company determines, in its sole discretion, are necessary or desirable to prevent the infringing use of any of the Company Licensed Marks.

		
	9.2
	The Bank Licensed Marks.

		
	(a)
	Grant of License to Use the Bank Licensed Marks.  Bank hereby grants to each Retail Entity that signs an Accession Agreement a non-exclusive, royalty-free, non-transferable, non-sublicensable (except as specified in this Section 9.2) right and license to use the Bank Licensed Marks in the United States solely in connection with the creation, establishment, marketing and administration of, and the provision of services related to, the Program, all pursuant to, and in accordance with, this Agreement and any applicable Trademark Style Guide. Those services shall include the solicitation of Cardholders and the advertisement or promotion of the Program.  All use of the Bank Licensed Marks shall be approved by Bank.  The license hereby granted is solely for the use of such Retail Entity and may be used as necessary to permit the exercise by Company of any of its rights under this Agreement to delegate obligations to Affiliate(s) and/or Subcontractors.  Such Retail Entity may sublicense the use of Bank Licensed Marks to any Affiliate or Subcontractor performing Company’s obligations under this Agreement; provided that such Affiliate or Subcontractor agrees to comply with all of the standards specified herein and the limitations on the use of the Bank Licensed Marks contained in this Section.  Except for the rights granted to each Retail Entity in the preceding sentence, the license granted hereby may not be sublicensed without the prior written approval of Bank.

		
	(b)
	New Marks.  If Bank adopts a trademark, trade name, service mark logo or other proprietary mark which is used by Bank in connection with its extension of bank card credit to customers but which is not listed on Schedule A hereto (a “New Mark”), Company may request that Bank add such New Mark to Schedule A hereto and license its use hereunder. Bank may do so in its sole discretion, and such New Mark shall be added to Schedule A by amendment of this Agreement.  The foregoing notwithstanding, it is understood and agreed that Bank 

32

shall not be required to add a New Mark to Schedule A if such New Mark was developed by Bank primarily for another charge, credit or debit program.
		
	(c)
	Termination of License.  The license granted in this Section shall terminate six (6) months after the later of § the final Portfolio Purchase Date or § termination of this Agreement.  Upon such termination of this license, as provided in this Section 9.2(c), all rights of the relevant Retail Entity to use the Bank Licensed Marks shall terminate, the goodwill connected therewith shall remain the property of Bank, and the relevant Retail Entity shall: (A) discontinue immediately all use of the Bank Licensed Marks, or any of them, and any colorable imitation thereof; and (B) at Company option, delete the Bank Licensed Marks from or destroy all unused Credit Card Applications, Account Documentation, periodic statements, materials, displays, advertising and sales literature and any other items bearing any of the Bank Licensed Marks. During the six (6) month period referenced above, the relevant Retail Entity may use the Bank Licensed Marks in accordance with this Agreement only as necessary to effect the relevant transition associated with clause (i) or (ii).  Notwithstanding the foregoing, Company shall be expressly permitted to continue to use Bank Licensed Marks after termination of the aforementioned license provided such use constitutes nominative fair use under the Lanham Act (15 U.S.C. §1501 et seq.) or common law.

		
	(d)
	Ownership of the Bank Licensed Marks.  Company acknowledges that § the Bank Licensed Marks, all rights therein, and the goodwill associated therewith, are, and shall remain, the exclusive property of Bank, § it shall take no action which will adversely affect Bank’s exclusive ownership of the Bank Licensed Marks or the goodwill associated with the Bank Licensed Marks, and § any and all goodwill arising from use of the Bank Licensed Marks by the Retail Entities shall inure to the benefit of Bank.  Nothing herein shall give Company any proprietary interest in or to the Bank Licensed Marks, except the right to use the Bank Licensed Marks in accordance with this Agreement, and Company shall not contest Bank’s title in and to the Bank Licensed Marks.

		
	(e)
	Infringement by Third Parties.  Company shall notify Bank, in writing, in the event that it has Knowledge of any infringing use of any of the Bank Licensed Marks by any third party.  If any of the Bank Licensed Marks is infringed, Bank alone has the right, in its sole discretion, to take whatever action it deems necessary to prevent such infringing use; provided, however, that if Bank fails to take reasonable steps to prevent infringement of the Bank Licensed Marks and such infringement has or is reasonably expected to have an adverse effect upon the Program or the rights of Company hereunder, Company may request that Bank take action necessary to alleviate such adverse impact.  Consideration of the Company’s request is at the Bank’s sole discretion.  Company shall reasonably cooperate with and assist Bank, at Bank’s expense, in the prosecution of those actions that Bank determines, in its sole discretion, are necessary or desirable to prevent the infringing use of any of the Bank Licensed Marks.

		
	9.3
	Ownership of Intellectual Property.

		
	(a)
	Ownership of Intellectual Property.  Each Party shall continue to own all of its Intellectual Property that existed as of the Original Effective Date.  Each Party shall own all right, title and interest in the Intellectual Property that it develops independently of the other party during the Term.

33

		
	(b)
	 See Schedule 9.3.

ARTICLE 10     
 
REPRESENTATIONS, WARRANTIES AND COVENANTS
		
	10.1
	General Representations and Warranties of Company.  

To induce Bank to establish and administer the Program, Company on behalf of itself and each Retail Entity to the extent specified below hereby makes the following representations and warranties to Bank as of the Original Effective Date, and each and all of which (except with respect to the representations and warranties in Section 10.1(c)(v), which are made solely as of the Original Effective Date and the Justice Closing Date, if the Justice Closing Date is the first Closing Date, and Section 10.1(g) (No Litigation), which is made solely as of the Original Effective Date, the Justice Conversion Date, and each Closing Date), shall be deemed to be restated and remade on each day during the Term.  
		
	(a)
	Corporate Existence.  Company and each Retail Entity § is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation; § is duly licensed or qualified to do business as a corporation and is in good standing as a foreign corporation in all jurisdictions in which the nature of the activities conducted or proposed to be conducted by it or the character of the assets owned or leased by it makes such licensing or qualification necessary to perform its obligations required hereunder except to the extent that its non-compliance would not have a material and adverse effect on Company’s ability to perform its obligations hereunder; and § has all necessary licenses, permits, consents or approvals from or by, and has made all necessary notices to, all Governmental Authorities having jurisdiction, to the extent required for Company’s or a Retail Entity’s current ownership, lease or conduct and operation and to perform its obligations under this Agreement, except to the extent that the failure to obtain such licenses, permits, consents or approvals or to provide such notices would not have a material and adverse effect on Company’s or a Retail Entity’s ability to perform its obligations required hereunder.

		
	(b)
	Capacity; Authorization; Validity.  Company has all necessary corporate power and authority to § execute and enter into this Agreement, and § perform, or cause to be performed, the obligations required of Company and each Retail Entity under this Agreement and the other documents, instruments and agreements executed by Company or a Retail Entity pursuant hereto.  The execution and delivery by Company of this Agreement and all documents, instruments and agreements executed and delivered by Company or a Retail Entity pursuant hereto, and the consummation by Company of the transactions specified herein have been duly and validly authorized and approved by all necessary corporate action of Company.  This Agreement (A) has been duly executed and delivered by Company, (B) constitutes the valid and legally binding obligation of Company, and (C) is enforceable in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, receivership or other laws affecting the rights of creditors generally and by general equity principles including those respecting the availability of specific performance).

		
	(c)
	Conflicts; Defaults; Etc.  The execution, delivery and performance of this Agreement by Company and the Accession Agreement by each Retail Entity, its compliance with the terms hereof and thereof, and its consummation of the transactions specified herein and 

34

therein with respect to each Conversion Date as applicable, and the closing of each Purchase Agreement will not § conflict with, violate, result in the breach of, constitute an event which would, or with the lapse of time or action by a third party or both would, result in a default under, or accelerate the performance required by, the terms of any material contract, instrument or agreement, including the Existing Issuer Agreements, to which Company or the Retail Entity, as applicable, is a party or by which it is bound except for conflicts, breaches and defaults which would not have a material and adverse effect upon Company’s or the Retail Entity’s, as applicable, ability to perform its obligations under this Agreement; § conflict with or violate the articles of incorporation or by-laws, or any other equivalent organizational document(s), of Company or the Retail Entity, as applicable; § violate any Applicable Law, or conflict with or require any consent or approval under any judgment, order, writ, decree, permit or license, to which Company or the Retail Entity, as applicable, is a party or by which it is bound or affected, except to the extent that such violation or the failure to obtain such consent or approval would not have a material and adverse effect upon Company’s or the Retail Entity’s, as applicable, ability to perform its obligations under this Agreement or the Accession Agreement; § require the consent or approval of any other party to any contract, instrument or commitment to which Company or the Retail Entity, as applicable, is a party or by which it is bound, except to the extent that the failure to obtain such consent or approval would not have a material and adverse effect upon Company’s or the Retail Entity’s, as applicable, ability to perform its obligations under this Agreement or the Accession Agreement; or § to the Knowledge of Company after consultation with counsel, require any filing with, notice to, consent or approval of, or any other action to be taken with respect to, any regulatory authority by Company, except to the extent that the failure to obtain such consent or approval would not have a material and adverse effect upon Company or the Retail Entity, as applicable, the Program, the Accounts, the Cardholder Indebtedness or Company’s or the Retail Entity’s, as applicable, ability to perform its obligations under this Agreement. 
		
	(d)
	Solvency.  Company and each Retail Entity is Solvent.

		
	(e)
	No Default.  Neither Company nor, to the best of its Knowledge, any of its Affiliates is in default with respect to any contract, agreement, lease, or other instrument to which it is a party or by which it is bound, except for defaults which would not have a material and adverse effect upon Company’s ability to perform its obligations under this Agreement, nor has Company received any notice of default under any such contract, agreement, lease or other instrument which default or notice of default would materially and adversely affect the performance by Company of its obligations under this Agreement.

		
	(f)
	Books and Records.  All of Company’s and, to the best of its Knowledge, its Affiliates’ records, files and books of account relating to the Program are in all material respects complete and correct and are maintained in accordance with Applicable Law.

		
	(g)
	No Litigation.  No action, claim or any litigation, proceeding, arbitration, investigation or controversy is pending or, to the best of Company’s Knowledge, threatened against Company or its Affiliates, at law, in equity or otherwise, before any court, board, commission, agency or instrumentality of any federal, state, or local government, or of any agency or subdivision thereof, or before any arbitrator or panel of arbitrators which, if adversely determined, could have a material and adverse effect on Company’s ability to perform its obligations under this Agreement.

35

		
	(h)
	Company Licensed Marks.  Company or an Affiliate of Company is the owner of the Company Licensed Marks and Company has the right, power and authority to license to Bank and authorized designees the use of the Company Licensed Marks in connection with the Program, and the use of the Company Licensed Marks by said licensees in a manner approved (or deemed approved) by Company shall not § violate any Applicable Law or § infringe upon the right(s) of any third party.

		
	(i)
	Portfolio Purchase.  Company has the full right and authority, subject to the terms of the respective Existing Issuer Agreements, to permit Bank to purchase each Existing Issuer Portfolio as contemplated pursuant to the terms of this Agreement.  Nothing in any Existing Issuer Agreement provides the Existing Issuer the right to refuse to consummate the sale to Bank of the respective Existing Issuer Portfolio following the expiration or termination of such Existing Issuer Agreement, provided that Company and Bank each has performed its respective obligations under this Agreement with respect to the purchase by Bank of each Existing Issuer Portfolio. 

		
	(j)
	ABL Agreement.  Company has obtained all necessary consents or approvals required under the ABL Agreement to enter into this Agreement.  

		
	10.2
	General Representations and Warranties of Bank.

To induce Company to enter into this Agreement and participate in the Program, Bank hereby makes the following representations and warranties to Company as of the Original Effective Date, and each and all of which (except with respect to the representations and warranties in Section 10.2(g) (No Litigation), which are made solely as of the Original Effective Date, the Justice Conversion Date, and each Closing Date and except with respect to the representations and warranties in Section 10.2(c)(v), which are made solely as of the Original Effective Date and the Justice Closing Date, if the Justice Closing Date is the first Closing Date), shall be deemed to be restated and remade on each day during the Term. 
		
	(a)
	Corporate Existence.  Bank § is a national banking association duly organized, validly existing, and in good standing under the laws of the United States with its home office as indicated in the first paragraph of this Agreement; § is duly licensed or qualified to do business as a banking corporation and is in good standing as a foreign corporation in all jurisdictions in which the nature of the activities conducted or proposed to be conducted by it or the character of the assets owned or leased by it makes such licensing or qualification necessary to perform its obligations hereunder except to the extent that its non-compliance would not have a material and adverse effect on Bank’s ability to perform its obligations hereunder; and § has all necessary licenses, permits, consents, or approvals from or by, and has made all necessary notices to, all Governmental Authorities having jurisdiction, to the extent required for Bank’s current ownership, lease or conduct and operation and to perform its obligations under this Agreement, except to the extent that the failure to obtain such licenses, permits, consents, or approvals or to provide such notices would not have a material and adverse effect on Bank’s ability to perform its obligations under this Agreement.

		
	(b)
	Capacity; Authorization; Validity.  Bank has all necessary power and authority to § execute and enter into this Agreement, and § perform all of the obligations required of Bank under this Agreement and the other documents, instruments and agreements executed by Bank pursuant hereto.  The execution and delivery by Bank of this Agreement and all documents, instruments and agreements executed and delivered by Bank pursuant hereto, and the 

36

consummation by Bank of the transactions specified herein, have been duly and validly authorized and approved by all necessary corporate action of Bank.  This Agreement (A) has been duly executed and delivered by Bank, (B) constitutes the valid and legally binding obligation of Bank, and (C) is enforceable in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, receivership or other laws affecting the rights of creditors generally and financial institutions in particular and by general equity principles including those respecting the availability of specific performance).  
		
	(c)
	Conflicts; Defaults; Etc.  The execution, delivery and performance of this Agreement and the Accession Agreement for each Retail Entity by Bank, its compliance with the terms hereof and thereof, and the consummation of the transactions specified herein and therein with respect to each Conversion Date, and the closing of each Purchase Agreement will not § conflict with, violate, result in the breach of, constitute an event which would, or with the lapse of time or action by a third party or both would, result in a default under, or accelerate the performance required by, the terms of any material contract, instrument or agreement to which Bank is a party or by which it is bound, except for conflicts, breaches and defaults which would not have a material and adverse effect upon Bank’s ability to perform its obligations under this Agreement; § conflict with or violate the articles of incorporation or by-laws, or any other equivalent organizational document(s) of Bank; § violate any Applicable Law, or conflict with or require any consent or approval under any judgment, order, writ, decree, permit or license, to which Bank is a party or by which it is bound or affected, except to the extent that such violation or the failure to obtain such consent or approval would not have a material and adverse effect upon Bank’s ability to perform its obligations under this Agreement or the Accession Agreement; § require the consent or approval of any other party to any contract, instrument or commitment to which Bank is a party or by which it is bound, except to the extent that the failure to obtain such consent or approval would not have a material and adverse effect upon Bank’s ability to perform its obligations under this Agreement or the Accession Agreement; or § to the Knowledge of Bank after consultation with counsel require any filing with, notice to, consent or approval of, or any other action to be taken with respect to, any regulatory authority by Bank, except to the extent that the failure to obtain such consent or approval would not have a material and adverse effect upon the Program, the Accounts, the Cardholder Indebtedness or Bank’s ability to perform its obligations under this Agreement.    

		
	(d)
	Solvency.  Bank is Solvent.

		
	(e)
	No Default.  Neither Bank nor, to the best of its Knowledge, any of its Affiliates is in default with respect to any contract, agreement, lease, or other instrument to which it is a party or by which it is bound, except for defaults which would not have a material and adverse effect upon Bank, the Program, Accounts, Cardholder Indebtedness or Bank’s ability to perform its obligations under this Agreement, nor has Bank received any notice of default under any such contract, agreement, lease or other instrument which default or notice of default would materially and adversely affect the performance by Bank of its obligations under this Agreement. 

		
	(f)
	Books and Records.  All of Bank’s and, to the best of its Knowledge, its Affiliates’ records, files and books of account relating to the Program are in all material respects complete and correct and are maintained in accordance with Applicable Law.

37

		
	(g)
	No Litigation.  No action, claim, or any litigation, proceeding, arbitration, investigation or controversy is pending or, to the best of Bank’s Knowledge, threatened against Bank or its Affiliates, at law, in equity or otherwise, before any court, board, commission, agency or instrumentality of any federal, state, or local government or of any agency or subdivision thereof or before any arbitrator or panel of arbitrators which, if adversely determined, could have a material and adverse effect on Bank’s ability to perform its obligations under this Agreement.  Bank, further, is not the subject of any action by a regulatory authority; and is not subject to any agreement, orders or directives with any regulatory authority with respect to its operations affecting Accounts, Cardholder Indebtedness and the Program, any other aspect of Bank’s business that relates to the Program or the ability of Bank to consummate the transactions specified herein or perform its obligations hereunder.

		
	(h)
	FDIC Insurance.  Bank is FDIC-insured, and to the best of Bank’s Knowledge, no proceeding is contemplated to revoke such insurance.

		
	(i)
	Bank Licensed Marks.  Bank or an Affiliate of Bank is the owner of the Bank Licensed Marks and Bank has the right, power and authority to license to Company and authorized designees the use of the Bank Licensed Marks in connection with the Program, and the use of the Bank Licensed Marks by said licensees in a manner approved (or deemed approved) by Bank shall not § violate any Applicable Law or § infringe upon the right(s) of any third party.

		
	10.3
	General Covenants of Company.

Company makes the following covenants to Bank, each and all of which shall survive the execution and delivery of this Agreement:
		
	(a)
	Maintenance of Existence and Conduct of Business.  Company shall preserve and keep in full force and effect its corporate existence other than in the event of a Change in Control or merger or consolidation in which Company is not the surviving entity.

		
	(b)
	Litigation.  Company promptly shall notify Bank in writing if it receives written notice of any litigation that, if adversely determined, would have a material and adverse effect on the Program, the Accounts in the aggregate or Company’s ability to perform its obligations hereunder.

		
	(c)
	Enforcement of Rights.  Except as otherwise specified herein, Company shall use commercially reasonable efforts to enforce its rights against third parties to the extent that a failure to enforce such rights could reasonably be expected to materially and adversely affect the Program, the Accounts in the aggregate or Company’s ability to perform its obligations hereunder. 

		
	(d)
	Compliance.  Subject to Section 4.3(q), Company and each Retail Entity shall at all times during the Term comply in all material respects with Applicable Law affecting obligations under this Agreement. 

		
	(e)
	Books and Records.  Company and each Retail Entity shall keep adequate records and books of account with respect to all Transactions and the Value Proposition, in each case in which proper entries are made in accordance with GAAP, which books and records shall be complete and accurate in all material respects. 

38

		
	(f)
	Affiliate/Subcontractor Compliance.  Company shall, to the extent necessary, cause its Affiliates and Subcontractors to comply with the terms of this Agreement. 

		
	(g)
	Insurance.  See Schedule 10.3(g).          

		
	(h)
	The carrying by Company of the insurance required herein shall in no way be interpreted as relieving Company of any other obligations it may have under this Agreement.  Company shall, at all times during the Term, provide a certificate of insurance at all times naming Bank as additional insured or loss payee, except with respect to Company’s cyber-insurance policy.  The limits in this Agreement shall be those stipulated or those carried by Company.

		
	(i)
	Rebranding.  See Schedule 10.3(i).      

		
	(j)
	Future Representations Approvals.  See Schedule 10.3(j). 

		
	10.4
	General Covenants of Bank.

Bank makes the following covenants to Company, each and all of which shall survive the execution and delivery of this Agreement:
		
	(a)
	Maintenance of Existence and Conduct of Business.  Bank shall preserve and keep in full force and effect its corporate existence other than in the event of a Change in Control or merger or consolidation in which Bank is not the surviving entity.

		
	(b)
	Litigation.  Bank promptly shall notify Company in writing if it receives written notice of any litigation that, if adversely determined, would have a material and adverse effect on the Program, the Accounts in the aggregate or Bank’s ability to perform its obligations hereunder.

		
	(c)
	Enforcement of Rights.  Except as otherwise specified herein, Bank shall use commercially reasonable efforts to enforce its rights against third parties to the extent that a failure to enforce such rights could reasonably be expected to materially and adversely affect the Program, the Accounts in the aggregate or Bank’s ability to perform its obligations hereunder.

		
	(d)
	Compliance.  Bank shall at all times during the Term comply in all material respects with Applicable Law, the Risk Management Policies and the Collections Policies.  Bank shall at all times during the Term maintain its national bank charter and FDIC insurance.

		
	(e)
	Books and Records.  Bank shall keep adequate records and books of account in with respect to the Program, in which proper entries are made in accordance with GAAP, which records and books of account shall be complete and accurate all material respects.

		
	(f)
	Affiliate/Subcontractor Compliance.  Bank shall, to the extent necessary, cause its Affiliates and Subcontractors to comply with the terms of this Agreement. 

		
	(g)
	Future Representations Approvals.  See Schedule 10.4(g).

39

ARTICLE 11     
 
CONFIDENTIALITY
		
	11.1
	General Confidentiality.

		
	(a)
	For purposes of this Agreement, “Confidential Information” means all of the following: § information that is provided by or on behalf of either Company or Bank to the other Party or its Subcontractors in connection with the Program; or § information about Company or Bank or their Affiliates, or their respective businesses or employees, that is otherwise obtained by the other party in connection with the Program, in each case including: (A) information concerning marketing plans, objectives and financial results; (B) information regarding business systems, methods, processes, financing data, programs and products; (C) information unrelated to the Program obtained by Company or Bank in connection with this Agreement, including by accessing or being present at the business location of the other party; (D) proprietary technical information, including source code; and (E) information about Credit Card usage and Program performance that does not contain Personally Identifiable Information of Cardholders, which shall solely be the Confidential Information of Company. Confidential Information shall include Cardholder Data and Customer Data, but the use, disclosure and return/destruction of such information shall be governed by ARTICLE 6. 

		
	(b)
	The restrictions on disclosure of Confidential Information under this ARTICLE 11 shall not apply to, with respect to Company or Bank, information that: § is already rightfully known to such Party at the time it obtains Confidential Information from the other Party; § is or becomes generally available to the public other than as a result of disclosure in breach of this Agreement or any other confidentiality obligations; § is lawfully received on a non-confidential basis from a third party authorized to disclose such information without restriction and without breach of this Agreement; § is contained in, or is capable of being discovered through examination of publicly available records or products; § is required to be disclosed by Applicable Law (provided that, except for any disclosure required by the SEC or pursuant to applicable stock exchange rules or regulations, the Party subject to such Applicable Law shall notify the other Party of any such use or requirement prior to disclosure of any Confidential Information obtained from the other Party in order to afford such other Party an opportunity to seek a protective order to prevent or limit disclosure of the Confidential Information to third parties and shall disclose Confidential Information of the other party only to the extent required by such Applicable Law; and provided, further, that if a Party intends to file this Agreement or any other documents related to the Program as an exhibit to any report or other filing with the SEC, such Party shall file with an application requesting confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934); or § is developed by Company or Bank without the use of any proprietary, non-public information provided by the other Party under this Agreement. Nothing herein shall be construed to permit the Receiving Party (as defined below) to disclose to any third party any Confidential Information that the Receiving Party is required to keep confidential under Applicable Law.

		
	(c)
	The terms and conditions of this Agreement shall be the Confidential Information of both Company and Bank. Company may, with the prior written consent of Bank (such consent not to be unreasonably withheld) only disclose as required under the ABL Agreement a redacted copy of the Agreement with JPMorgan Chase Bank, N.A. (and Bank acknowledges 

40

that JPMorgan Chase Bank, N.A. or Company may share such redacted copy with other parties as provided under the ABL Agreement) if such Agreement is redacted in a manner substantially similar to (and in any event, no more than) the redactions reflected in the Private Label Credit Card Program Agreement publicly released by Kohl’s Department Stores, Inc. as Exhibit 10.1 of the Form 10-Q filing with the Securities and Exchange Commission for the quarter ended July 31, 2010, provided that no element of the process hereunder for settling transactions for the purchases of goods or services or receipt of payments (or returns/credits/exchanges for payments) in stores is redacted. 
		
	(d)
	If Company or Bank receive Confidential Information of the other Party (“Receiving Party”), the Receiving Party shall do the following with respect to the Confidential information of the other Party (“Disclosing Party”): § keep the Confidential Information of the Disclosing Party secure and confidential; § treat all Confidential Information of the Disclosing Party with the same degree of care as it accords its own Confidential Information, but in no event less than a reasonable degree of care; and § implement and maintain commercially reasonable physical, electronic, administrative and procedural security measures, including commercially reasonable authentication, access controls, virus protection and intrusion detection practices and procedures.

		
	11.2
	Use and Disclosure of Confidential Information.

		
	(a)
	Each Receiving Party shall use and disclose the Confidential Information of the Disclosing Party only for the purpose of performing its obligations or enforcing its rights with respect to the Program and this Agreement or as otherwise expressly permitted by this Agreement, and shall not accumulate in any way or make use of such Confidential Information for any other purpose.

		
	(b)
	Each Receiving Party shall: § limit access to the Disclosing Party’s Confidential Information to those employees and Subcontractors who have a reasonable need to access such Confidential Information in connection with the Program; and § ensure that any Person with access to the Disclosing Party’s Confidential Information agrees to be bound by contractual commitments of confidentiality or professional obligations at least as protective of Confidential Information as the provisions of this ARTICLE 11 and maintains the existence of this Agreement and the nature of their obligations hereunder strictly confidential.

		
	(c)
	Bank shall use all Confidential Information of Company, including Company marketing plans, marketing campaign results, and reports, solely for the benefit of the Program and Company. 

		
	(d)
	Information about Program strategy (including marketing strategy, acquisition strategy and use of technology or systems) shall not be shared with Bank employees who manage or have the ability to influence decisions or develop strategies for the Bank credit card portfolios of Designated Retailers. 

		
	11.3
	Unauthorized Use or Disclosure of Confidential Information.

Each Receiving Party agrees that any unauthorized use or disclosure of Confidential Information of the Disclosing Party might cause immediate and irreparable harm to the Disclosing Party for which money damages might not constitute an adequate remedy.  In that event, the Receiving Party agrees that injunctive 

41

relief may be warranted in addition to any other remedies the Disclosing Party may have.  In addition, the Receiving Party agrees promptly to advise the Disclosing Party by telephone and in writing pursuant to Section 17.12, each pursuant to the principles outlined in Section (b) of Schedule 6.4, of any security breach that may have compromised any Confidential Information, or any unauthorized misappropriation, disclosure or use by any Person of the Confidential Information of the Disclosing Party which may come to its attention, and to take all steps at its own expense reasonably requested by the Disclosing Party to limit, stop or otherwise remedy such misappropriation, disclosure or use.
		
	11.4
	Return or Destruction of Confidential Information.

Upon the termination or expiration of this Agreement, the Receiving Party shall comply with the Disclosing Party’s reasonable instructions regarding the disposition of the Disclosing Party’s Confidential Information, which may include the return or destruction of any and all the Disclosing Party’s Confidential Information (including any electronic or paper copies, reproductions, extracts or summaries thereof); provided, however, the Receiving Party in possession of tangible property containing the Disclosing Party’s Confidential Information may retain, subject to the terms of this Agreement, § such Confidential Information as may be present in backup systems from which it cannot reasonably be deleted, and § one archived copy of such Confidential Information which may be used solely for regulatory purposes and may not be used for any other purpose. Such compliance shall be certified in writing, including a statement that no copies of Confidential Information have been kept, except as provided herein.

ARTICLE 12    
See Schedules 12.1 – 12.4.

ARTICLE 13     
 
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
See Schedules 13.1 – 13.4.

ARTICLE 14     
 
TERM/TERMINATION
See Schedules 14.1 – 14.5.

ARTICLE 15     
 
EFFECTS OF TERMINATION
See Schedule 15.1 – 15.3.

42

ARTICLE 16     
 
INDEMNIFICATION
		
	16.1
	Company Indemnification of Bank.

From and after the Original Effective Date, Company shall indemnify and hold harmless Bank, its Affiliates, their respective officers, directors, employees, agents, Subcontractors and representatives and any Person claiming by or through any of them (collectively, the “Bank Indemnified Parties”) from and against and in respect of any and all losses, liabilities, damages, costs and expenses of whatever nature, including reasonable attorneys’ fees and expenses (collectively, “Losses”) relating to third-party claims, which are caused or incurred by, result from, arise out of or relate to:
		
	(a)
	Company’s or any of its Affiliates’ or Subcontractors’ gross negligence, recklessness or willful misconduct (including acts and omissions) relating to the Program;

		
	(b)
	any breach by Company or any of its Affiliates or Subcontractors, or their respective officers, directors, employees or agents of any of the terms, conditions, covenants, representations, or warranties contained in this Agreement;

		
	(c)
	Company’s failure to satisfy any of its obligations or liabilities to third parties, including Customers and any Existing Issuer;

		
	(d)
	any actions or omissions by Bank or any of its Affiliates or Subcontractors taken or not taken at Company’s written request or direction pursuant to this Agreement except where Bank or any of its Affiliates or Subcontractors would have been otherwise required to take such action (or refrain from acting) absent the request or direction of Company;

		
	(e)
	fraudulent acts by Company, its Affiliates and Subcontractors, or their respective officers, directors employees or agents;

		
	(f)
	Company’s or any of its Affiliates’ or Subcontractors’ failure to comply with Applicable Law unless such failure was the result of (i) any action taken or not taken by Company or any of its Affiliates or Subcontractors at the written request or direction of Bank or (ii) Bank’s breach of its obligations under Section 4.3(q);

		
	(g)
	Company Inserts or Billing Statement messages;

		
	(h)
	allegations by a third party that the use of the Company Licensed Marks or any materials or documents provided by Company (other than any Account Documentation provided by Company after Bank’s legal review and approval, unless such allegations are as a result of subsequent modification to such Account Documentation by Company) constitutes: § libel, slander, and/or defamation; § infringement of intellectual property, including trademark infringement or dilution, or copyright infringement; § unfair competition or misappropriation of another’s ideas or trade secret; § invasion of rights of privacy or rights of publicity; or § breach of contract or tortious interference;

		
	(i)
	allegations by a third party that the use of the Company systems or anything provided by Company under this Agreement constitutes infringement, misappropriation or violation of the Intellectual Property of such third party, unless such allegations arise out of a 

43

modification or combination thereof by Bank that is not reasonably contemplated by the Parties;
		
	(j)
	Company’s offering or sales of Goods and/or Services; or

		
	(k)
	the operation of a Second Look Program by a Person other than Bank.

		
	16.2
	Bank’s Indemnification of Company.

From and after the Original Effective Date, Bank shall indemnify and hold harmless Company, its Affiliates, their respective officers, directors, employees, agent, Subcontractors and representatives and any Person claiming by or through any of them (collectively, the “Company Indemnified Parties”) from and against and in respect of any and all Losses relating to third-party claims, which are caused or incurred by, result from, arise out of or relate to:
		
	(a)
	Bank’s or any of its Affiliates’ or Subcontractors’ gross negligence, recklessness or willful misconduct (including acts and omissions) relating to the Program;

		
	(b)
	any breach by Bank or any of its Affiliates or Subcontractors, or their respective officers, directors, employees or agents of any of the terms, conditions, covenants, representations, or warranties contained in this Agreement, or any Credit Card Agreement;

		
	(c)
	Bank’s failure to satisfy any of its obligations or liabilities to third parties, including Cardholders and any Existing Issuer;

		
	(d)
	any actions or omissions by Company or any of its Affiliates or Subcontractors taken or not taken at Bank’s written request or direction pursuant to this Agreement, except where Company or any of its Affiliates or Subcontractors would have been otherwise required to take such action (or refrain from acting) absent the request or direction of Bank;

		
	(e)
	fraudulent acts by Bank, its Affiliates, or Subcontractors or their respective officers, directors employees or agents;

		
	(f)
	any Account Documentation used by Company after Bank’s legal review and approval that fails to comply with Applicable Law unless such failure to comply is as a result of subsequent modification to such Account Documentation by Company;

		
	(g)
	Bank’s or any of its Affiliates’ or Subcontractors’ failure to comply with Applicable Law, the Risk Management Policies, or the Collections Policies unless such failure was the result of any action taken or not taken by Bank or any of its Affiliates or Subcontractors at the specific written request or direction of Company;

		
	(h)
	Bank’s Inserts or Billing Statement messages; 

		
	(i)
	allegations by a third party that the use of the Bank Licensed Marks or any materials or documents provided by Bank constitutes: § libel, slander, and/or defamation; § infringement of intellectual property, including trademark infringement or dilution, or copyright infringement, § unfair competition or misappropriation of another’s ideas or trade secret; § invasion of rights of privacy or rights of publicity; or § breach of contract or tortious interference; or

44

		
	(j)
	allegations by a third party that the use of the Bank systems or anything provided by Bank under this Agreement constitutes infringement, misappropriation or violation of the Intellectual Property of such third party, unless such allegations arise out of a modification or combination thereof by Company that is not reasonably contemplated by the Parties.

		
	16.3
	Procedures.

		
	(a)
	In case any claim is made, or any suit or action is commenced, against a Bank Indemnified Party or Company Indemnified Party, the Party in respect of which indemnification may be sought under this ARTICLE 16 (including for the benefit of its officers, directors, employees, agents or representatives or any Person claiming by or through any of them) (the “Indemnified Party”) shall promptly give the other party (the “Indemnifying Party”) notice thereof and the Indemnifying Party shall be entitled to participate in the defense thereof and, with prior written notice to the Indemnified Party given not later than twenty (20) days after the delivery of the applicable notice, to assume, at the Indemnifying Party’s expense, the defense thereof, with counsel reasonably satisfactory to such Indemnified Party. After notice from the Indemnifying Party to such Indemnified Party of its election so to assume the defense thereof, the Indemnifying Party will not be liable to such Indemnified Party under this Section for any attorneys’ fees or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than reasonable costs of investigation.

		
	(b)
	The Indemnified Party shall have the right to employ its own counsel if the Indemnifying Party elects to assume such defense, but the fees and expenses of such counsel shall be at the Indemnified Party’s expense, unless § the employment of such counsel has been authorized in writing by the Indemnifying Party, § the Indemnifying Party has not employed counsel to take charge of the defense within twenty (20) days after delivery of the applicable notice or, having elected to assume such defense, thereafter ceases its defense of such action, or § the Indemnified Party has reasonably concluded that there may be defenses available to it which are different from or additional to those available to the Indemnifying Party (in which case the Indemnifying Party shall not have the right to direct the defense of such action on behalf of the Indemnified Party), in any of which event attorneys’ fees and expenses shall be borne by the Indemnifying Party.

		
	(c)
	The Indemnifying Party shall promptly notify the Indemnified Party if the Indemnifying Party desires not to assume, or participate in the defense of, any such claim, suit or action.

		
	(d)
	The Indemnified Party or Indemnifying Party may at any time notify the other of its intention to settle or compromise any claim, suit or action against the Indemnified Party in respect of which payments may be sought by the Indemnified Party hereunder, and § the Indemnifying Party may settle or compromise any such claim, suit or action solely for the payment of money damages, but shall not agree to any other settlement or compromise without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld, and § the Indemnified Party may settle or compromise any such claim, suit or action solely for an amount not exceeding one thousand dollars ($1,000), but shall not settle or compromise any other matter without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld.

		
	(e)
	Notwithstanding any provision contained in this Section 16.3 to the contrary, the Indemnifying Party shall not knowingly take any position or action in any pending litigation 

45

that would be reasonably likely to be adverse to the Indemnified Party without the Indemnified Party’s express prior written consent.
		
	16.4
	Notice and Additional Rights and Limitations.

		
	(a)
	If an Indemnified Party fails to give prompt notice of any claim being made or any suit or action being commenced in respect of which indemnification under this ARTICLE 16 may be sought, such failure shall not limit the liability of the Indemnifying Party; provided, however, that this provision shall not be deemed to limit the Indemnifying Party’s rights to recover for any loss, cost or expense which it can establish resulted from such failure to give prompt notice.

		
	(b)
	This ARTICLE 16 shall govern the obligations of the Parties with respect to the subject matter hereof but shall not be deemed to limit the rights which any party might otherwise have at law or in equity.

ARTICLE 17     
 
MISCELLANEOUS
		
	17.1
	Precautionary Security Interest.  

Company and Bank agree that this Agreement contemplates the extension of credit by Bank to Cardholders.  However, as a precaution in the event that any Person asserts that Article 9 of the Uniform Commercial Code applies or may apply to the transactions contemplated hereby, and to secure Company’s payment of and performance of all obligations of Company to Bank, Company hereby grants to Bank a first priority present and continuing security interest in and to the following, whether now existing or hereafter created or acquired, together with the proceeds thereof: all Accounts, all Cardholder Indebtedness, and all Charge Transaction Data. In addition, Company agrees to take any reasonable action requested by Bank, at Bank’s expense, to establish the first lien and perfected status of such security interest, and appoints Bank as Company’s attorney-in-fact to take any such action on Company behalf; provided that Bank shall be responsible for preparing any such documentation.
		
	17.2
	Securitization; Participation.  

Bank shall not sell, securitize, pledge or participate the Cardholder Indebtedness unless such sale, exchange, securitization, pledge or participation does not affect Company’s rights or Bank’s ability to satisfy its obligations hereunder, including by requiring consent or approval of any third party for Bank to reacquire all right, title and interest in and to such Cardholder Indebtedness and release any lien thereon, or otherwise encumber or impair in any way any of Company’s rights hereunder to purchase the Program Assets.  
		
	17.3
	No Consequential Damages.  

EXCEPT FOR DAMAGES ARISING OR RESULTING FROM WILLFUL MISCONDUCT, FRAUD OR GROSS NEGLIGENCE, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER LEGAL OR EQUITABLE PRINCIPLES, OR FOR ANY LOSS OF PROFITS OR REVENUE, REGARDLESS OF WHETHER SUCH PARTY KNEW OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING LIMITATIONS SHALL 

46

NOT APPLY TO CLAIMS FOR BREACH OF THE OBLIGATIONS OF CONFIDENTIALITY (WHICH INCLUDES MISUSE OF CUSTOMER DATA AND CARDHOLDER DATA), INDEMNIFICATION OR INFRINGEMENT OF THE BANK LICENSED MARKS OR COMPANY LICENSED MARKS.
		
	17.4
	Assignment.  

Except as provided in this ARTICLE 17, neither Party shall assign this Agreement or any of its rights hereunder without the prior written consent of the other Party; provided, however, that either Party may, without the consent of the other Party, assign this Agreement in whole or in part to an Affiliate in the United States of such Party.  The assigning Party shall provide the other Party with at least sixty (60) days prior written notice of the proposed assignment and if requested by the non-assigning Party, provide an appropriate guarantee covering all of the obligations of the assigning Party under this Agreement. 
		
	17.5
	Sale or Transfer of Accounts.  

Except as provided in Schedule 12.3 and ARTICLE 17, Bank shall not sell or transfer the Accounts in whole or in part.  Bank will not transfer the Accounts or the Cardholder Indebtedness to an entity that is treated as a “variable interest entity” within the meaning of FASB Codification ASC 810 – Consolidation.
		
	17.6
	Subcontracting.  

See Schedule 17.6.
		
	17.7
	Amendment. 

Except as provided herein, this Agreement may not be amended except by a written instrument signed by Bank and Company.
		
	17.8
	Non-Waiver.  

No waiver of the provisions hereto shall be effective unless in writing and signed by the Party to be charged with such waiver.  No waiver shall be deemed to be a continuing waiver in respect of any subsequent breach or default either of similar or different nature unless expressly so stated in writing.  No failure or delay on the part of either Party in exercising any power or right under this Agreement shall be deemed to be a waiver, nor does any single or partial exercise of any power or right preclude any other or further exercise, or the exercise of any other power or right.
		
	17.9
	Severability.  

If any of the provisions or parts of the Agreement are determined to be illegal, invalid or unenforceable in any respect under any applicable statute or rule of law, such provisions or parts shall be deemed omitted without affecting any other provisions or parts of the Agreement which shall remain in full force and effect, unless the declaration of the illegality, invalidity or unenforceability of such provision or provisions substantially frustrates the continued performance by, or entitlement to benefits of, either Party, in which case this Agreement may be terminated by the affected Party, without penalty.  
		
	17.10
	Governing Law.  

This Agreement and all rights and obligations hereunder, including matters of construction, validity and performance, shall be governed by and construed in accordance with the laws of the State of New York, without regard to internal principles of conflict of laws, and applicable federal law. 

47

		
	17.11
	Captions.  

The table of contents and various captions of the articles and sections of this Agreement are for convenient reference only and are not intended as a summary of such articles or sections and do not affect, limit, modify or construe the contents thereof.
		
	17.12
	Notices.  

Any notice, approval, acceptance or consent required or permitted under this Agreement shall be in writing to the other Party and shall be deemed to have been duly given when delivered in person or, if sent by United States registered or certified mail, with postage prepaid, or by a nationally recognized overnight delivery service, when received, addressed as follows:
If to Company:         Ascena Retail Group, Inc.
933 MacArthur Blvd.
Mahwah, N.J. 07430
Attn: President

With copies to:         Ascena Retail Group, Inc.
(which copies shall not constitute notice)    933 MacArthur Blvd.
Mahwah, N.J. 07430
Attn: General Counsel

If to Bank:         Capital One Services, LLC
77 W. Wacker Drive
Chicago, IL 60601
Attn: Vice President Client Development

With copies to:        Capital One
(which copies shall not constitute notice)    8000 Towers Crescent Drive
Vienna, VA 22182
Attn: Chief Counsel, Transactions

Morrison & Foerster LLP
2000 Pennsylvania Avenue, NW
Suite 6000
Washington, DC 20006
Attn: Panagiotis Bayz

		
	17.13
	Further Assurances.  

Company and Bank agree to produce or execute such other documents or agreements as may be reasonably necessary or desirable for the execution and implementation of this Agreement and the consummation of the transactions specified herein and to take all such further action as the other Party may reasonably request in order to give evidence to the consummation of the transactions specified herein.
		
	17.14
	No Joint Venture.  

Nothing contained in this Agreement shall be deemed or construed by the Parties or any third party to create a partnership, joint venture or of any association between Company and Bank, and no act of either Party 

48

shall be deemed to create any such relationship.  Company and Bank each agree to such further actions as the other Party may request to evidence and affirm the non-existence of any such relationship.
		
	17.15
	Press Releases.  

Except for any notice which is required by Applicable Law or stock exchange rules (which shall be subject to Section 11.1(b)), neither Party may issue any press releases, announcements, or similar materials of a public or promotional nature regarding the subject matter of this Agreement without first obtaining the other Party’s written permission, which may be withheld in such Party’s sole discretion. 
		
	17.16
	No Set-Off.  

Company and Bank agree that each Party has waived any right to set-off, combine, consolidate or otherwise appropriate and apply § any assets of the other Party held by the Party or § any indebtedness or other liabilities at any time owing by the Party to the other Party, as the case may be, against or on account of any obligations owed by the other Party under this Agreement, except as expressly set forth herein.
		
	17.17
	Third Parties.  

There are no third-party beneficiaries to this Agreement except that the Bank Indemnified Parties and Company Indemnified Parties are intended third party beneficiaries of ARTICLE 16.  Except as provided in the preceding sentence, the Parties do not intend § the benefits of this Agreement to inure to any third party; or § any rights, claims or causes of action against a Party to be created in favor of any Person other than the other Party. 
		
	17.18
	Force Majeure.  

If performance of any service or obligation under this Agreement is prevented, restricted, delayed or interfered with by reason of labor disputes, strikes, acts of God, floods, lightning, severe weather, shortages of materials, rationing, utility or communication failures, earthquakes, war, revolution, civil commotion, acts of public enemies, blockade, embargo or any law, order, proclamation, regulation, ordinance, demand or requirement having legal effect of any government or any judicial authority or representative of any such government, or any other act whatsoever, whether similar or dissimilar to those referred to in this clause, which are beyond the reasonable control of a Party and could not have been prevented by reasonable precautions (each, a “Force Majeure Event”), then such Party shall be excused from such performance to the extent of and during the period of such Force Majeure Event. A Party excused from performance pursuant to this Section shall exercise all reasonable efforts to continue to perform its obligations hereunder, including by implementing its disaster recovery and business continuity plan as provided in Schedule 4.8, and shall thereafter continue with reasonable due diligence and good faith to remedy its inability to so perform except that nothing herein shall obligate either Party to settle a strike or other labor dispute when it does not wish to do so.
		
	17.19
	Entire Agreement.  

This Agreement, together with the First Accession Agreement, the Second Accession Agreement and the Schedules and exhibits hereto which are expressly incorporated herein by reference, supersedes any other agreement, whether written or oral, that may have been made or entered into by Company and Bank (or by any officer or employee of either of such Parties) relating to the matters specified herein, and constitutes the entire agreement by the Parties related to the matters specified herein or therein.  
		
	17.20
	Binding Effect; Effectiveness.  

49

This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted assigns.  This Agreement is the product of negotiation by the Parties having the assistance of counsel and other advisers.  It is the intention of the Parties that this Agreement not be construed more strictly with regard to one Party than with regard to the other Party.
		
	17.21
	Counterparts/Facsimiles/PDF E-Mails.  

This Agreement may be executed in any number of counterparts, all of which together shall constitute one and the same instrument, but in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart.  Any facsimile or PDF e-mailed version of an executed counterpart shall be deemed an original. 
		
	17.22
	Arbitration.

		
	(a)
	Scope of Arbitration.  Except as provided in Section 3.6(e), any dispute, controversy or claim of any and every kind or type, whether based on contract, tort, statute, regulations or otherwise, arising out of, in connection with or relating in any way to this Agreement, the relationship of the Parties, the obligations of the Parties or the operations carried out under this Agreement, including any dispute as to the existence, validity, construction, interpretation, negotiation, performance, non-performance, breach, termination or enforceability of this Agreement, that cannot be resolved through the dispute resolution procedures set forth in Section 3.6 may, by mutual agreement of the Parties, be resolved through final and binding arbitration.

		
	(b)
	Arbitration Notice.  If a dispute has not been resolved following the completion of the dispute resolution procedures set forth in Section 3.6, then either Party may, with the consent of the other Party, initiate arbitration proceedings in accordance with this Section 17.22. 

		
	(c)
	Administration of Arbitration.  The arbitration is to be administered by the American Arbitration Association (the “AAA”) and is to be conducted in accordance with the Commercial Arbitration Rules of the AAA.  Such arbitration shall be conducted in New York, New York.  

		
	(d)
	Arbitration Expenses.  Each Party shall pay for one-half of the arbitration expenses, including arbitrator fees and expenses, except that the Party initiating a claim for arbitration shall be responsible for paying the filing fees associated with initiating such claim.  Each Party shall be responsible for paying its own attorney and expert fees and costs; provided, however, that if the arbitrators determine that one Party is the prevailing Party in such arbitration, the arbitrators may, as a part of its award, require the non-prevailing Party to pay the costs and fees (including, the arbitration filing fees and reasonable attorney’s fees and expert fees) incurred by the prevailing Party.

		
	(e)
	Appointment of Arbitrators.  The arbitration is to be held before a panel of three (3) arbitrators, and the Parties will use commercially reasonable efforts to ensure that each of the arbitrators have at least ten (10) years of experience in the credit card industry (if such dispute relates to the credit card aspects of this Agreement) or in the applicable industry if the dispute is not specific to the credit card industry.  No later than fifteen (15) Business Days after the notice of arbitration is received, each Party shall select an arbitrator and request the two selected arbitrators to select a third neutral arbitrator within five (5) Business Days, who shall serve as the presiding arbitrator.  Unless otherwise agreed to by the Parties, 

50

the two arbitrators selected by the Parties must have no direct or indirect financial interest in the dispute or any direct or indirect financial interest in or dependence upon either of the Parties (other than his or her fees and expenses for serving on the panel), and the third, presiding arbitrator selected by the two Party-selected arbitrators must qualify as a neutral arbitrator as defined in the Commercial Arbitration Rules and/or Code of Ethics of the AAA.  Before beginning the hearings, the three arbitrators must each take an oath of impartiality.  Any arbitration proceedings shall be concluded within ninety (90) days of the appointment of the arbitrators.
		
	(f)
	Enforcement; Authority of Arbitrators.  Judgment on any award rendered by the arbitrators may be entered in any court of competent jurisdiction, however, the arbitrators have no authority to award punitive damages unless otherwise allowable pursuant to this Agreement or any other damages not measured by the prevailing Party’s actual damages (unless liquidated damages are specified in this Agreement), and may not, in any event, make any ruling, finding or award that does not conform to the provisions of this Agreement.

		
	17.23
	Survival.  

Upon the termination of this Agreement, the Parties shall have the rights and remedies described herein.  Upon such termination, all obligations of the Parties under this Agreement shall cease, except that the obligations of the Parties pursuant to ARTICLE 1 (Definitions), Schedule 4.17 (Reciprocal Access Rights) (for one (1) year following expiration or termination of this Agreement for financial accounting and reconciliation and for three (3) years following expiration or termination of this Agreement for audit rights of a Governmental Authority), ARTICLE 6 (Cardholder and Customer Information), ARTICLE 9 (Licensing of Trademarks; Intellectual Property), ARTICLE 10 (Representations and Warranties), ARTICLE 11 (Confidentiality), ARTICLE 15 (Effects of Termination), ARTICLE 16 (Indemnification), ARTICLE 17 (Miscellaneous), including references to survival of specific obligations therein, and any other provision hereof that by its terms applies following the expiration or termination hereof, including any payment obligation which arises prior to expiration or termination hereof, shall survive the expiration or termination of this Agreement. 

[SIGNATURE PAGE FOLLOWS]

51

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly executed as of the date first above written.
ASCENA RETAIL GROUP, INC.

By:  /s/ David Jaffe                
Name:  David Jaffe
Title:  President and Chief Executive Officer

CAPITAL ONE, NATIONAL ASSOCIATION

By:  /s/ Jennifer A. Glaspie
Name: Jennifer A. Glaspie

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}]]