Document:

exv4w7

Exhibit 4.7

 

 

DOLAN MEDIA COMPANY

TO

 

as Trustee

INDENTURE

Dated as of                                          , 20                     

 

 

 

 

CROSS REFERENCE SHEET *

     Provisions of Trust Indenture Act of 1939, as amended, and Indenture to be dated as of
                                        , 20                     by and between Dolan Media Company and               
                          , as Trustee:

	 	 	 
	Section of the Act	 	Section of Indenture
	310(a)(1) and (2)
	 	6.09
	310(a)(3) and (4)
	 	Inapplicable
	310(b)
	 	6.08 and 6.10(a), (b) and (d)
	310(c)
	 	Inapplicable
	311(a)
	 	6.13
	311(b)
	 	6.13
	311(c)
	 	Inapplicable
	312(a)
	 	4.01 and 4.02(a)
	312(b)
	 	4.02(a) and (b)
	312(c)
	 	4.02(c)
	313(a)
	 	4.04(a)
	313(b)(1)
	 	Inapplicable
	313(b)(2)
	 	4.04(a)
	313(c)
	 	4.04(a)
	313(d)
	 	4.04(b)
	314(a)
	 	4.03
	314(b)
	 	Inapplicable
	314(c)(1) and (2)
	 	14.05
	314(c)(3)
	 	Inapplicable
	314(d)
	 	Inapplicable
	314(e)
	 	14.05
	314(f)
	 	Inapplicable
	315(a), (c) and (d)
	 	6.01
	315(b)
	 	5.11
	315(e)
	 	5.12
	316(a)(1)
	 	5.09 and 5.10
	316(a)(2)
	 	Not required
	316(a) (last sentence)
	 	7.04
	316(b)
	 	5.07
	316(c)
	 	7.06
	317(a)
	 	5.02
	317(b)
	 	3.04(a) and (b)
	318(a)
	 	14.07

 

			
	* 	 	This Cross Reference Sheet is not part of the Indenture.

 

 

TABLE OF CONTENTS

	 	 	 
	ARTICLE 1 DEFINITIONS
	 	1
	 
	 	 
	ARTICLE 2 SECURITIES
	 	7
	 
	 	 
	Section 2.01 Forms Generally
	 	7
	Section 2.02 Form of Trustee’s Certificate of Authentication
	 	7
	Section 2.03 Amount Unlimited; Issuable in Series
	 	8
	Section 2.04 Authentication and Delivery of Securities
	 	11
	Section 2.05 Execution of Securities
	 	12
	Section 2.06 Certificate of Authentication
	 	12
	Section 2.07 Denomination and Date of Securities; Payments of Interest
	 	13
	Section 2.08 Registration, Transfer and Exchange
	 	15
	Section 2.09 Mutilated, Defaced, Destroyed, Lost and Stolen Securities
	 	16
	Section 2.10 Cancellation of Securities
	 	17
	Section 2.11 Temporary Securities
	 	17
	Section 2.12 Currency and Manner of Payments in Respect of Securities
	 	18
	Section 2.13 Compliance with Certain Laws and Regulations
	 	21
	Section 2.14 CUSIP Numbers
	 	21
	Section 2.15 Securities in Global Form
	 	21
	Section 2.16 Form of Conversion Notice
	 	22
	 
	 	 
	ARTICLE 3 COVENANTS OF THE ISSUER
	 	22
	 
	 	 
	Section 3.01 Payment of Principal and Interest
	 	22
	Section 3.02 Offices for Payment, etc
	 	22
	Section 3.03 Appointment to Fill a Vacancy in Office of Trustee
	 	23
	Section 3.04 Paying Agents
	 	23
	Section 3.05 Additional Amounts
	 	24
	Section 3.06 Calculation of Original Issue Discount
	 	25
	 
	 	 
	ARTICLE 4 SECURITYHOLDERS’ LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
	 	25
	 
	 	 
	Section 4.01 Company to Furnish Trustee Information as to Names and
Addresses of Securityholders
	 	25
	Section 4.02 Preservation and Disclosure of Securityholders’ Lists
	 	26
	Section 4.03 Reports by the Company
	 	27
	Section 4.04 Reports by the Trustee
	 	28
	 
	 	 
	ARTICLE 5 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
	 	28
	 
	 	 
	Section 5.01 Event of Default Defined; Acceleration of Maturity; Waiver of Default
	 	28
	Section 5.02 Collection of Indebtedness by Trustee; Trustee May Prove Debt
	 	30
	Section 5.03 Application of Proceeds
	 	32
	Section 5.04 Suits for Enforcement
	 	33

i

 

	 	 	 
	Section 5.05 Restoration of Rights on Abandonment of Proceedings
	 	33
	Section 5.06 Limitations on Suits by Securityholders
	 	33
	Section 5.07 Unconditional Right of Securityholders to Institute Certain Suits
	 	34
	Section 5.08 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default
	 	34
	Section 5.09 Control by Securityholders
	 	35
	Section 5.10 Waiver of Past Defaults
	 	35
	Section 5.11 Trustee to Give Notice of Default, But May Withhold in Certain Circumstances
	 	35
	 
	 	 
	ARTICLE 6 CONCERNING THE TRUSTEE
	 	36
	 
	 	 
	Section 6.01 Duties and Responsibilities of the Trustee; During Default; Prior to Default
	 	36
	Section 6.02 Certain Rights of the Trustee
	 	37
	Section 6.03 Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof 
	 	38
	Section 6.04 Trustee and Agents May Hold Securities; Collections, etc
	 	39
	Section 6.05 Moneys Held by Trustee
	 	39
	Section 6.06 Compensation and Indemnification of Trustee and Its Prior Claim
	 	39
	Section 6.07 Right of Trustee to Rely on Officers’ Certificate, etc
	 	40
	Section 6.08 Disqualification of Trustee; Conflicting Interests
	 	40
	Section 6.09 Persons Eligible for Appointment as Trustee
	 	40
	Section 6.10 Resignation and Removal; Appointment of Successor Trustee
	 	41
	Section 6.11 Acceptance of Appointment by Successor Trustee
	 	42
	Section 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee
	 	43
	Section 6.13 Preferential Collection of Claims Against the Company
	 	43
	 
	 	 
	ARTICLE 7 CONCERNING THE SECURITYHOLDERS
	 	44
	 
	 	 
	Section 7.01 Evidence of Action Taken by Securityholders
	 	44
	Section 7.02 Proof of Execution of Instruments
	 	44
	Section 7.03 Holders to Be Treated as Owners
	 	44
	Section 7.04 Securities Owned by Company Deemed Not Outstanding
	 	45
	Section 7.05 Right of Revocation of Action Taken
	 	45
	Section 7.06 Record Date for Determination of Holders Entitled to Vote
	 	45
	 
	 	 
	ARTICLE 8 SUPPLEMENTAL INDENTURES
	 	46
	 
	 	 
	Section 8.01 Supplemental Indentures Without Consent of Securityholders
	 	46
	Section 8.02 Supplemental Indentures With Consent of Securityholders
	 	47
	Section 8.03 Effect of Supplemental Indenture
	 	48
	Section 8.04 Documents to Be Given to Trustee
	 	49
	Section 8.05 Notation on Securities in Respect of Supplemental Indentures
	 	49
	 
	 	 
	ARTICLE 9 CONSOLIDATION, MERGER, SALE OR CONVEYANCE
	 	49
	 
	 	 
	Section 9.01 Company May Consolidate, etc., on Certain Terms
	 	49
	Section 9.02 Successor Corporation Substituted
	 	50
	Section 9.03 Opinion of Counsel to Trustee
	 	50

ii

 

	 	 	 
	ARTICLE 10 SATISFACTION AND DISCHARGE; DEFEASANCE
	 	50
	 
	 	 
	Section 10.01 Satisfaction and Discharge of Indenture
	 	50
	Section 10.02 Defeasance and Covenant Defeasance
	 	51
	Section 10.03 Application by Trustee of Funds Deposited for Payment of Securities
	 	53
	Section 10.04 Repayment of Moneys Held by Paying Agent
	 	53
	Section 10.05 Return of Unclaimed Moneys Held by Trustee and Paying Agent
	 	54
	Section 10.06 Reinstatement of Obligations
	 	54
	 
	 	 
	ARTICLE 11 REDEMPTION OF SECURITIES
	 	54
	 
	 	 
	Section 11.01 Notice of Redemption; Partial Redemptions
	 	54
	Section 11.02 Payment of Securities Called for Redemption
	 	56
	Section 11.03 Exclusion of Certain Securities from Eligibility for Selection for Redemption
	 	57
	Section 11.04 Repayment at the Option of the Holders
	 	57
	 
	 	 
	ARTICLE 12 HOLDERS’ MEETINGS
	 	57
	 
	 	 
	Section 12.01 Purposes of Meetings
	 	57
	Section 12.02 Call of Meetings by Trustee
	 	58
	Section 12.03 Call of Meetings by Company or Holders
	 	58
	Section 12.04 Qualifications for Voting
	 	58
	Section 12.05 Regulations
	 	58
	Section 12.06 Voting
	 	59
	Section 12.07 No Delay of Rights by Meeting
	 	59
	 
	 	 
	ARTICLE 13 SECURITY
	 	60
	 
	 	 
	ARTICLE 14 MISCELLANEOUS PROVISIONS
	 	60
	 
	 	 
	Section 14.01 Incorporators, Stockholders, Officers and Directors of Company Exempt from Individual Liability
	 	60
	Section 14.02 Provisions of Indenture for the Sole Benefit of Parties and Securityholders
	 	61
	Section 14.03 Successors and Assigns of Company Bound by Indenture
	 	61
	Section 14.04 Notices and Demands on Company, Trustee and Securityholders
	 	61
	Section 14.05 Officers’ Certificates and Opinions of Counsel; Statements to Be Contained Therein
	 	62
	Section 14.06 Payments Due on Saturdays, Sundays and Holidays
	 	63
	Section 14.07 Conflict of Any Provision of Indenture with Trust Indenture Act
	 	63
	Section 14.08 New York Law to Govern
	 	63
	Section 14.09 Counterparts
	 	63
	Section 14.10 Effect of Headings
	 	63
	Section 14.11 Determination of Principal Amount
	 	63
	Section 14.12 Waiver
	 	63
	Section 14.13 Force Majeure
	 	63
	Section 14.14 Waiver of Jury Trial
	 	64

iii

 

     THIS INDENTURE, dated as of                     , 20                   (this “Indenture”), is by and between
Dolan Media Company, a Delaware corporation (the “Company”), and                             , as Trustee
(the “Trustee”),

RECITALS

     A. The Company has duly authorized the execution and delivery of this Indenture in order to
issue from time to time its debentures, notes or other evidences of indebtedness in one or more
Series (as defined herein) in accordance with the terms of this Indenture.

     B. All things necessary to make this Indenture a valid agreement of the Company according to
its terms have been done.

AGREEMENT

     In consideration of the recitals and the purchases of the Securities by the Holders (as
defined herein) thereof, the Company and the Trustee mutually covenant and agree for the equal and
proportionate benefit of the respective Holders from time to time of the Securities as follows:

ARTICLE 1

DEFINITIONS

     The following terms (except as herein otherwise expressly provided or unless the context
otherwise clearly requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.1. Certain terms used
principally in certain Articles or Sections hereof are defined in those Articles or Sections, as
the case may be. All terms used but not defined in this Indenture that are defined in the Trust
Indenture Act (as defined herein) or the definitions of which in the Securities Act (as defined
herein) are referred to in the Trust Indenture Act, including terms defined therein by reference to
the Securities Act (except as herein otherwise expressly provided or unless the context otherwise
clearly requires), shall have the meanings assigned to such terms in the Trust Indenture Act and in
the Securities Act. Unless the context otherwise clearly requires: (a) all accounting terms used
herein and not expressly defined shall have the meanings assigned to such terms in accordance with
generally accepted accounting principles, and the term” generally accepted accounting principles”
means such accounting principles as are generally accepted in the United States of America (as
defined herein) at the time of any computation; (b) the words” “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Indenture as a whole, as supplemented and amended
from time to time, and not to any particular Article, Section or other subdivision; (c) all
references to Articles, Sections or other subdivisions are to Articles, Sections or other
subdivisions of this Indenture; (d) words in the singular include the plural and vice versa; (e)
the pronoun “his” refers to the masculine, feminine and neuter; (f) the word “including” or any
variation thereof shall be deemed to be followed by “but not limited to” and (g) the word
“principal,” whenever used with reference to the Securities or any Security or any portion thereof,
shall be deemed to be followed by “and premium, if any.”

     “Additional Amounts” has the meaning specified in Section 3.05.

 

 

     “Business Day” means any calendar day that is not a Saturday, Sunday or legal holiday in New
York, New York, and on which the Trustee and commercial banks are open for business in New York,
New York.

     “Capital Stock” means any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including each class of Common
Stock and Preferred Stock, and all options, warrants or other rights to purchase or acquire any of
the foregoing.

     “Commission” means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act or if at any time after the execution and delivery of this Indenture
such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.

     “Common Stock” includes any stock of any class of the Company that has no preference in
respect of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which is not subject to redemption by the
Company.

     “Company” means Dolan Media Company, a Delaware corporation, until a successor Person shall
have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company”
will mean such successor Person.

     “Company Board of Directors” means either the Board of Directors of the Company or any
committee of such Board of Directors duly authorized to act hereunder, as the case may be.

     “Company Board Resolution” means a copy of one or more resolutions certified by the secretary
or any assistant secretary of the Company to have been duly adopted by the Company Board of
Directors and to be in full force and effect on the date of such certification, and delivered to
the Trustee. Where any provision of this Indenture refers to action to be taken pursuant to a
Company Board Resolution (including the establishment of any Series of the Securities and the forms
and terms thereof), such action may be taken by any officer of the Company authorized to take such
action by the Company Board of Directors as evidenced by a Company Board Resolution.

     “Company Officers’ Certificate” means a certificate signed by both (i) the chief executive
officer, the president or any vice president of the Company and (ii) the treasurer or any assistant
treasurer or the secretary or any assistant secretary of the Company, and delivered to the Trustee.
Each such certificate shall include the statements provided for in Section 14.05 to the extent
applicable.

     “Company Order” means a written order, direction, instruction or request of the Company signed
by both (i) the chief executive officer, the president or any vice president of the Company and
(ii) the treasurer or any assistant treasurer or the secretary or any assistant secretary of the
Company.

     “Conversion Date” has the meaning specified in Section 2.12(e).

2

 

     “Conversion Event” means the cessation of use of a Foreign Currency both by the government of
the country or countries, or the confederation or association of governments, that issued such
Currency and for the settlement of transactions by a central bank or other public institutions of
or within the international banking community.

     “Corporate Trust Office” means the office of the Trustee at which the corporate trust business
of the Trustee shall, at any particular time, be principally administered, which office is, at the
date as of which this Indenture is dated, located at
         
          
                     .

     “Coupon” means any interest coupon appertaining to any Security.

     “Coupon Security” means any Security authenticated and delivered with one or more Coupons
appertaining thereto.

     “Currency” means any currency or currencies issued by the government of one or more countries
or by any confederation or association of such governments, including Dollars, euros and pounds
sterling.

     “Currency Determination Agent” means the New York clearing house bank, if any, from time to
time selected by the Company for purposes of Section 2.12.

     “Dollar” means the coin or currency of the United States of America which as of the time of
payment is legal tender for the payment of public and private debts.

     “Event of Default” means any event or condition specified as such in Section 5.01.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Foreign Currency” means any Currency issued by the government of one or more countries other
than the United States of America or by any confederation or association of such governments,
including euros and pounds sterling.

     “Government Obligations” means securities which are (i) direct obligations of the United
States of America or the government which issued the Currency in which the Securities of a
particular Series are denominated or (ii) obligations of a Person controlled or supervised by, or
acting as an agency or instrumentality of, the United States of America or the government which
issued the Currency in which the Securities of such Series are denominated, the full and timely
payment of which obligations is unconditionally guaranteed by such government, and which, in either
case, are full faith and credit obligations of such government, are denominated in the Currency in
which the Securities of such Series are denominated and which are not callable or redeemable at the
option of the issuer thereof and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a specific payment of
interest on principal of any such Government Obligation held by such custodian for the account of
the holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.

3

 

     “Holder,” “Holder of Securities,” “Securityholder” or other similar terms mean the bearer of
an Unregistered Security or a Registered Holder of a Registered Security and, when used with
respect to any Coupon, means the bearer thereof.

     “Indenture” means this instrument as originally executed and delivered or, if amended or
supplemented as herein provided, as so amended or supplemented or both, and shall include the forms
and terms of particular Series of Securities established as contemplated hereunder.

     “interest,” when used with respect to non-interest bearing Securities, means interest payable
at maturity and, when used with respect to a Security which provides for the payment of Additional
Amounts pursuant to Section 3.5 or otherwise, includes such Additional Amounts.

     “Market Exchange Rate” has the meaning specified in Section 2.12(d).

     “Opinion of Counsel” means an opinion in writing signed by legal counsel who may be an
employee of or counsel to the Company, and who shall be reasonably satisfactory to the Trustee.
Each such opinion shall include the statements provided for in Section 14.05 to the extent
applicable.

     “Original Issue Discount” with respect to any Security, including an Original Issue Discount
Security, has the same meaning set forth in Section 1273 of the Internal Revenue Code of 1986 as in
effect on the date hereof, or any successor provision, and the applicable Treasury Regulations
thereunder.

     “Original Issue Discount Security” means any Security which provides for an amount less than
the stated principal amount thereof to be due and payable upon declaration of acceleration of the
maturity thereof pursuant to Section 5.01.

     “Outstanding,” when used with reference to Securities, shall, subject to the provisions of
Section 7.04, mean, as of any particular time, all Securities authenticated and delivered by the
Trustee under this Indenture, except:

               (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;

               (ii) Securities, or portions thereof, as to which moneys in the amount and Currency
required for the repayment or redemption thereof shall have been deposited in trust with the
Trustee or with any Paying Agent (other than the Company) or shall have been set aside,
segregated and held in trust by the Company for the holders of such Securities (if the
Company shall act as its own Paying Agent), provided that, if such Securities, or
portions thereof, are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as herein provided, or provision satisfactory to the
Trustee shall have been made for giving such notice;

               (iii) Securities for which other Securities shall have been authenticated and delivered
in substitution, or which shall have been paid, pursuant to the terms of Section 2.09
(except with respect to any such Security as to which proof satisfactory to

4

 

the Trustee and the Company is presented that such Security is held by a Person in whose hands such Security
is a legal, valid and binding obligation of the Company); and

               (iv) Securities discharged pursuant to Section 10.01 or with respect to which the
Company has effected defeasance and/or covenant defeasance as provided in Section 10.02, to
the extent such Securities are not reinstated pursuant to Section 10.06.

     “Paying Agent” means any Person (which may include the Company) authorized by the Company to
pay the principal of or interest, if any, on any Security on behalf of the Company.

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

     “Place of Payment,” when used with respect to the Securities of any Series, means the place or
places where the principal of and interest, if any, on the Securities of that Series are payable as
specified pursuant to Section 3.02, and initially shall mean the designated office of the Trustee
at which the corporate trust paying agent office of the Trustee shall, at any particular time, be
administered, which office is, at the date of this Indenture, located
at                   
               .

     “Preferred Stock” includes any stock of any class of the Company that has a preference over
Common Stock in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company.

     “Registered Holder,” when used with respect to a Registered Security, means the Person in
whose name such Security is registered in the Security register.

     “Registered Security” means any Security registered in the Security register.

     “Responsible Officer,” when used with respect to the Trustee, means any officer within the
corporate trust department (or any successor group) of the Trustee including any vice president,
assistant vice president, assistant secretary, or any other officer or assistant officer of the
Trustee customarily performing 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 at the
Corporate Trust Office because of such Person’s knowledge of and familiarity with the particular
subject.

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

     “Securities” means debentures, notes or other evidences of indebtedness that have been
authenticated and delivered under this Indenture.

     “Series” or “Series of Securities” means a series of Securities and, except in Sections 2.03
and 7.04 and Articles One (“Outstanding”), Five and Six, a Tranche in the event that the applicable
Series may be issued in separate Tranches.

5

 

     “Subsidiary” means any Person which is consolidated in the Company’s accounts and any Person
of which at least a majority of the outstanding stock having by the terms thereof ordinary voting
power to elect a majority of the directors (or Persons performing similar functions) of such Person
(irrespective of whether or not at the time stock of any other class or classes of such Person
shall have or might have voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by the Company, or by one or more Subsidiaries, or by
the Company and one or more Subsidiaries.

     “Tranche” means all Securities of the same Series which have the same issue date, maturity
date, interest rate or method of determining interest, and, in the case of Original Issue Discount
Securities, which have the same issue price.

     “Trustee”
means the Person identified as “Trustee” in the first paragraph hereof and, subject
to the provisions of Article 6, any successor trustee, and if at any time there is more than one
such Person, “Trustee” as used with respect to the Securities of any Series shall mean the Trustee
with respect to Securities of that Series.

     “Trust Indenture Act of 1939” or” Trust Indenture Act,” except as otherwise provided in
Sections 8.01 and 8.02, means the Trust Indenture Act of 1939, as amended.

     “United States” means the United States of America (together with the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction.

     “United States of America” means the fifty states constituting the United States of America as
of the date hereof.

     “United States Person” means, unless otherwise specified with respect to any Securities
pursuant to Section 2.03, an individual who is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the laws of the United
States or an estate or trust the income of which is subject to United States federal income
taxation regardless of its source.

     “Unregistered Security” means any Security not registered in the Security register.

     “Valuation Date” has the meaning specified in Section 2.12(d).

     “vice president,” when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the title
of” vice president.”

     “Wholly Owned Subsidiary” means any Subsidiary in which the Company and/or its other wholly
owned Subsidiaries own all of the outstanding capital stock (other than directors’ qualifying
shares).

6

 

ARTICLE 2

SECURITIES

     Section 2.01 Forms Generally. The Securities of each Series and the Coupons, if any,
shall be substantially in such form (not inconsistent with this Indenture) as shall be established
by or pursuant to a Company Board Resolution and set forth in a Company Officers’ Certificate
and/or in one or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or permitted by this
Indenture or any indenture supplemental hereto (the provisions of which shall be appropriate to
reflect the terms of each Series of Securities, including the currency or denomination, which may
be Dollars or any Foreign Currency) and may have imprinted or otherwise reproduced thereon such
legend or legends, not inconsistent with the provisions of this Indenture or any indenture
supplemental hereto, as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or market or to conform to general
usage, all as may be determined by the officers executing such Securities and Coupons, if any, as
evidenced by their execution of the Securities and Coupons, if any.

     The definitive Securities and Coupons, if any, shall be printed, or may be produced in any
other manner, all as determined by the officers of the Company executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons, if any.

     Section 2.02 Form of Trustee’s Certificate of Authentication. The Trustee’s
certificate of authentication on all Securities shall be in substantially the following form:

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

     This is one of the Securities of the Series designated herein and referred to in the
within-mentioned Indenture.

	 	 	 	 	 
	 	as Trustee	 
	 
	 	By

	 
	 	Authorized Signatory	 
	 
	 	OR	 
	 
	 	 
as Authentication Agent	 
	 
	 	By 
	 
	 	Authorized Office	 
	 	 	 

7

 

	 	 	 	 	 

     Section 2.03 Amount Unlimited; Issuable in Series. The aggregate principal amount of
Securities which 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 one or more Company Board Resolutions and set forth in a Company Officers’ Certificate and/or
established in one or more indentures supplemental hereto, prior to the issuance of Securities of
any Series:

          (a) the title of the Securities of the Series (which title shall distinguish the Securities of
the Series from all other Securities issued by the Company), including, as applicable, whether the
Securities of the Series shall be issued as senior Securities, senior subordinated Securities or subordinated
Securities; any subordination provisions particular to the Securities of the Series; and whether
the Securities of the Series are convertible or exchangeable for other securities;

          (b) any 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 Sections 2.08, 2.09, 2.11 or 11.02);

          (c) if other than 100% of its aggregate principal amount, the percentage of the aggregate
principal amount at which the Securities of the Series will be offered;

          (d) the date or dates (whether fixed or extendable) on which the principal of the Securities
of the Series is payable;

          (e) the rate or rates, which may be fixed or variable, at which the Securities of the Series
shall bear interest, if any, the date or dates from which such interest shall accrue, the interest
payment dates on which such interest shall be payable, the basis upon which interest shall be
calculated if other than that of a 360-day year consisting of twelve 30-day months and, in the case
of Registered Securities, the record dates for the determination of Holders to whom interest is
payable;

          (f) any provisions relating to the issuance of the Securities of the Series at an Original
Issue Discount;

          (g) the place or places where the principal of and interest on Securities of the Series shall
be payable and where Securities of the Series may be surrendered for conversion or exchange (if
other than as provided in Section 3.02);

          (h) whether any of such Securities of the Series are to be redeemable at the option of the
Company, and if so, the price or prices at which, the period or periods within which and the terms
and conditions upon which Securities of the Series may be so redeemed, in whole or in part, at the
option of the Company, pursuant to any sinking fund or otherwise;

          (i) if other than 100% of the aggregate principal amount thereof, the portion of the principal
amount of the Securities of the Series which shall be payable upon declaration of

8

 

acceleration of the maturity date thereof pursuant to Section 5.01 or provable in bankruptcy pursuant to Section
5.02, or, if applicable, which is convertible or exchangeable;

          (j) 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 price or prices at which, the Currency in which and the period or periods within 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 (including the terms or method of payment
thereof if other than cash), and any provision for the remarketing of the Securities;

          (k) the issuance of Securities of the Series as Registered Securities or Unregistered
Securities or both, and the rights of the Holders to exchange Unregistered Securities of the Series
for Registered Securities of the Series or to exchange Registered Securities of the Series for
Unregistered Securities of the Series and the circumstances under which any such exchanges, if
permitted, may be made;

          (l) if other than denominations of $1,000 and any integral multiple thereof, the
denominations, which may be in Dollars or any Foreign Currency, in which Securities of the Series
shall be issuable;

          (m) whether the Securities of the Series will be certificated and, if so, the form of the
Securities (or forms thereof if both Unregistered Securities and Registered Securities shall be
issuable in such Series), including such legends as required by law or as the Company deems
necessary or appropriate, the form of any Coupons or temporary global security which may be issued
and the forms of any other certificates which may be required hereunder or which the Company may
require in connection with the offering, sale, delivery or exchange of the Securities;

          (n) if other than Dollars, the Currency or Currencies in which payments of interest, principal
and other amounts payable with respect to the Securities of the Series are to be denominated,
payable, redeemable or repurchasable, as the case may be;

          (o) whether Securities of the Series are issuable in Tranches;

          (p) the obligations, if any, of the Company to permit the conversion or exchange of the
Securities of such Series into Common Stock, Preferred Stock or other Capital Stock or property
(including securities), or a combination thereof, and the terms and conditions upon which such
conversion shall be effected (including the initial conversion or exchange price or rate, the
conversion or exchange period, the provisions for conversion or exchange price or rate adjustments
and any other provisions relative to such obligation) and any limitations on the ownership or
transferability of the securities or property into which the Securities may be converted or
exchanged;

          (q) if other than the Trustee, any trustees, authenticating or paying agents, transfer agents
or registrars or any other agents with respect to the Securities of such Series;

9

 

          (r) if the Securities of the Series do not bear interest, the applicable dates for purposes of
Section 4.01;

          (s) any deletions from, modifications of or additions to (a) the Events of Default with
respect to Securities of the Series or (b) the right of the Trustee or the Holders of such
Securities pursuant to Section 5.01;

          (t) any deletions from, modifications of or additions to the covenants set forth in Article 3
with respect to Securities of the Series;

          (u) if the amount of payments of principal of, and make-whole amount, if any, and interest on,
the Securities of the Series may be determined with reference to an index, the manner in which such
amount shall be determined;

          (v) whether the Securities of the Series shall be issued in whole or in part in the global
form of one or more Securities and in such case, (a) the depositary for such Securities, which
depositary must be a clearing agency registered under the Exchange Act, (b) the circumstances under
which any such Securities may be exchanged for Securities registered in the name of, and under
which any transfer of such Securities may be registered in the name of, any Person other than such
depositary or its nominee, if other than as set forth in Section 2.15, and (c) any other provisions
regarding such Securities which provisions may be in addition to or in lieu of, in whole or in
part, the provisions of Section 2.15;

          (w) whether, under what circumstances and the Currency in which, the Company will pay
Additional Amounts as contemplated by Section 3.05 on the Securities of the Series to any Holder
who is not a United States Person (including any modification to the definition of such term) in
respect of any tax, assessment or governmental charge and, if so, whether the Company will have the
option to redeem such Securities rather than pay such Additional Amounts (and the terms of any such
option);

          (x) whether the Securities of the Series, in whole or in specified part, will not be
defeasible pursuant to Section 10.02(b) or Section 10.02(c), or both such Sections, and, if the
Securities may be defeased, in whole or in specified part, pursuant to either or both such Sections, any provisions to permit
a pledge of obligations other than Government Obligations (or the establishment of other
arrangements) to satisfy the requirements of Section 10.02(d)(i) for defeasance of the Securities
and, if other than by a Company Board Resolution, the manner in which any election by the Company
to defease the Securities will be evidenced;

          (y) whether the Securities of such Series are to be secured by any property, assets or other
collateral and, if so, the applicable collateral, any deletions from, modifications of or additions
to the provisions of Article 13;

          (z) the Person to whom any interest on the Securities of such Series will be payable, if other
than the Securityholder thereof, on the regular record date therefor;

          (aa) the dates on which interest, if any, will be payable and the regular record dates for
interest payment dates;

10

 

          (bb) any restrictions, conditions or requirements for transfer of the Securities of such
Series; and

          (cc) any other terms or conditions upon which the Securities of the Series are to be issued
(which terms shall not be inconsistent with the provisions of this Indenture).

     All Securities of any one Series shall be substantially identical except as to denomination,
except as contemplated by the immediately succeeding paragraph, and except as may otherwise be
provided in or pursuant to such Company Board Resolution or in any such indenture supplemental
hereto. All Securities of any one Series need not be issued at the same time, and unless otherwise
provided, a Series may be reopened, without the consent of the Holders, for issuances of additional
Securities of such Series or to establish additional terms of such Series of Securities (which
additional terms shall only be applicable to unissued or additional Securities of such Series).

     Each Series may be issued in one or more Tranches. All Securities of a Tranche shall have the
same issue date, maturity date, interest rate or method of determining interest, and, in the case
of Original Issue Discount Securities, the same issue price.

     Section 2.04 Authentication and Delivery of Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver Securities of any
Series having attached thereto appropriate Coupons, if any, executed by the Company to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver such Securities to or
upon a Company Order without any further action by the Company. In authenticating such Securities
and accepting the additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive and (subject to Section 6.01) shall be fully protected in
relying upon:

          (a) a Company Board Resolution relating to such Series;

          (b) an executed supplemental indenture, if any;

          (c) a Company Officers’ Certificate setting forth the form and terms of the Securities of such
Series as required pursuant to Sections 2.01 and 2.03, respectively, and prepared in accordance
with Section 14.05;

          (d) at the option of the Company, either an Opinion of Counsel, prepared in accordance with
Section 14.05, or a letter addressed to the Trustee allowing the Trustee to rely on an Opinion of
Counsel, substantially to the effect that:

          (i) the form or forms and terms of such Securities and Coupons, if any, have been
established in or pursuant to a Company Board Resolution or in a supplemental indenture as
permitted by Sections 2.01 and 2.03, respectively, in conformity with the provisions of this
Indenture; and

          (ii) such Securities and Coupons, if any, have been duly authorized, and, 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, will

11

 

constitute valid and
binding obligations of the Company enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors’ rights and by general equitable principles, regardless of whether
such enforceability is considered in a proceeding in equity or at law;

     provided, however, that in the case of any Series issuable in Tranches, if the
Trustee has previously received the applicable documents referred to in clause (a) through (d)
above with respect to such Series, the Trustee shall authenticate and deliver Securities of such
Tranches executed by the Company for original issuance upon receipt by the Trustee of a notice,
executed by an officer of the Company transmitted electronically by facsimile or otherwise and
confirmed in writing to the Trustee, of the terms of the issuance of such Securities.

     The Trustee shall have the right to decline to authenticate and deliver any Securities under
this Section 2.04 if the Trustee, being advised by counsel, determines that such Securities may not
lawfully be issued by the Company.

     Notwithstanding the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall deliver such Security to
the Trustee for cancellation as provided in Section 2.10, together with a written statement (which
need not comply with Section 14.05 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.

     Section 2.05 Execution of Securities. The Securities shall be signed on behalf of the
Company by both (a) its chief executive officer, president or any vice president and (b) its
treasurer, any assistant treasurer, its secretary or any assistant secretary, which may, but need
not, be attested. Such signatures may be the manual or facsimile signatures of the present or any
future such officers. Typographical and other minor errors or defects in any such reproduction of
any such signature shall not affect the validity or enforceability of any Security that has been
duly authenticated and delivered by the Trustee. Any Coupons attached to any Unregistered Security
shall be executed on behalf of the Company by the manual or facsimile signature of any such officer
of the Company.

     Securities and Coupons, if any, bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall, to the fullest extent permitted by law,
bind the Company, notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not hold such offices at
the date of such Securities or Coupons, if any.

     Section 2.06 Certificate of Authentication. Only such Securities as shall bear
thereon a certificate of authentication substantially in the form hereinbefore recited, executed by
the Trustee by the manual signature of one of its authorized signatories, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Security executed by the Company shall be conclusive evidence that the

12

 

Security so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled
to the benefits of this Indenture.

     The Trustee shall not authenticate or deliver any Unregistered Security until matured Coupons
appertaining thereto have been detached and canceled, except as otherwise provided or permitted by
this Indenture.

     Section 2.07 Denomination and Date of Securities; Payments of Interest. The
Securities shall be issuable in denominations as shall be specified as contemplated by Section
2.03. In the absence of any such specification with respect to the Securities of any Series, the
Securities of such Series shall be issuable in denominations of $1,000 and any multiple thereof,
which may be in Dollars or any Foreign Currency, and interest shall be computed on the basis of a
360-day year of twelve 30-day months. The Securities shall be numbered, lettered, or otherwise
distinguished in such manner or in accordance with such plan as the officers of the Company
executing the same may determine with the approval of the Trustee as evidenced by the
execution and authentication thereof.

     Each Security shall be dated the date of its authentication, shall bear interest from the date
and shall be payable on the dates, in each case, which shall be specified as contemplated by
Section 2.03.

     Interest on any Security which is payable, and is punctually paid or duly provided for, on any
interest payment date shall be paid, in the case of Registered Securities, to the Person in whose
name that Security (or one or more predecessor Securities) is registered at the close of business
on the regular record date for the payment of such interest and, in the case of Unregistered
Securities, upon surrender of the Coupon appertaining thereto in respect of the interest due on
such interest payment date.

     The term “record date,” as used with respect to any interest payment date (except for a date
for payment of defaulted interest), means the date specified as such in the terms of the Securities
of any particular Series, or, if no such date is so specified, if such interest payment date is the
first day of a calendar month, the close of business on the fifteenth day of the next preceding
calendar month or, if such interest payment date is the fifteenth day of a calendar month, the
close of business on the first day of such calendar month, whether or not such record date is a
Business Day.

     Any interest on any Security of any Series which is payable, but is not punctually paid or
duly provided for, on any interest payment date (called “defaulted interest” for the purpose of
this Section 2.07) shall forthwith cease to be payable to the Registered Holder on the relevant
record date by virtue of his having been such Holder; and such defaulted interest may be paid by
the Company, at its election in each case, as provided in clause (a) or (b) below:

          (a) The Company may elect to make payment of any defaulted interest to the Persons in whose
names any such Registered Securities (or their respective predecessor Securities) are registered at
the close of business on a special record date for the payment of such defaulted interest, which
shall be fixed in the following manner. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Security of

13

 

such Series and the date of
the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the
proposed payment; such money, when so deposited, will be held in trust for the benefit of the
Persons entitled to such defaulted interest. Thereupon the Trustee shall fix a special record date
for the payment of such defaulted interest in respect of Registered Securities of such Series which
shall be not more than 15 nor less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such defaulted interest and
the special record date thereof to be mailed, first class postage prepaid, to each Registered
Holder at his address as it appears in the Security register, not less than 10 days prior to such
special record date. Notice of the proposed payment of such defaulted interest and the special
record date therefor having been mailed as aforesaid, such defaulted interest in respect of
Registered Securities of such Series shall be paid to the Person in whose names such Securities (or
their respective predecessor Securities) are registered on such special record date and such
defaulted interest shall no longer be payable pursuant to the following clause (b).

          (b) The Company may make payment of any defaulted interest on the Registered Securities of any
Series in any other lawful manner not inconsistent with the requirements of any securities exchange
or market on which the Securities of that Series may be listed, and upon such notice as may be
required by such exchange or market, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such payment shall be deemed practicable by the Trustee.

     Any defaulted interest payable in respect of any Security of any Series which is not a
Registered Security shall be payable pursuant to such procedures as may be satisfactory to the
Trustee in such manner that there is no discrimination as between the Holders of Registered
Securities and other Securities of the same Series, and notice of the payment date therefor shall
be given by the Trustee, in the name and at the expense of the Company, by publication at least once
in a newspaper of general circulation in New York, New York.

     Subject to the foregoing provisions of this Section 2.07, each Security delivered under this
Indenture upon transfer of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

     In the case of any Security which is converted into Common Stock or Preferred Stock after any
regular record date and on or prior to the next succeeding interest payment date (other than any
Security whose maturity is prior to such interest payment date), interest whose stated maturity is
on such interest payment date shall be payable on such interest payment date notwithstanding such
conversion, and such interest (whether or not punctually paid or duly provided for) shall be paid
to the Person in whose name that Security (or one or more predecessor Securities) is registered at
the close of business on such regular record date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security which is converted, interest whose
stated maturity is after the date of conversion of such Security shall not be payable.

14

 

     Section 2.08 Registration, Transfer and Exchange. The Company will keep or will cause
to be kept at the office or agency of the Trustee to be maintained for the purpose as provided in
Section 3.02 a register or registers in which, subject to such reasonable regulations as it may
prescribe, the Company will provide for the registration and transfer of Registered Securities as
is provided in this Article 2. Such register shall be in written form in the English language or
in any other form capable of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for inspection by the Trustee.

     Upon due presentation for registration of transfer of any Registered Security of any Series at
any such office or agency to be maintained for the purpose as provided in Section 3.2, the Company
shall execute and the Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Registered Security or Registered Securities of the same Series in authorized
denominations for a like aggregate principal amount.

     At the option of the Holder thereof, Unregistered Securities of a Series, which by their terms
are registerable as to principal and interest, may, to the extent and under the circumstances
specified pursuant to Section 2.03, be exchanged for Registered Securities of such Series, as may
be issued by the terms thereof. At the option of the Holder thereof, Registered Securities of a
Series which by their terms provide for the issuance of Unregistered Securities, may, to the extent
and under the circumstances specified pursuant to Section 2.3, be exchanged for Unregistered
Securities of such Series. Securities so issued in exchange for other Securities shall be of any
authorized denomination and of like principal amount and maturity date, interest rate or method of
determining interest, and shall be issued upon surrender of the Securities for which they are to be
exchanged and, in the case of Coupon Securities, together with all unmatured Coupons and matured
Coupons in default appertaining thereto, at the office of the Company provided for in Section 3.02
and upon payment, if the Company shall require, of charges provided therein. Unregistered
Securities of any Series issued in exchange for Registered Securities of such Series between the
regular record date for such Registered Security and the next interest payment date will be issued
without the Coupon relating to such interest payment date, and Unregistered Securities surrendered
in exchange for Registered Securities between such dates shall be surrendered without the Coupon
relating to such interest payment date. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the
Holder making the exchange is entitled to receive. Notwithstanding the foregoing, an Unregistered
Security will not be delivered in exchange for a Registered Security or Securities unless the
Trustee receives a certificate signed by the Person entitled to delivery of such Security or other
items or documents fulfilling such conditions as shall be required by regulations of the United
States Department of the Treasury, or shall be notified by the Company that such a certificate
shall not be required by such regulations; provided, however, that no such
Unregistered Security shall be delivered by the Trustee if the Trustee or such agent shall have, or
shall have been notified in writing by the Company that the Company has, actual knowledge that such
certificate is false.

     Upon presentation for registration of any Unregistered Securities of any Series which by its
terms is registerable as to principal, at the office or agency of the Company to be maintained as
provided in Section 3.02, such Security shall be registered as to principal in the name of the
Holder thereof and such registration shall be noted on such Security. Any Security so registered

15

 

shall be transferable on the registry books of the Company upon presentation of such Security
at such office or agency for similar notation thereon, but such Security may be discharged from
registration by being in a like manner transferred to bearer, whereupon transferability by delivery
shall be restored. Except as otherwise provided pursuant to Section 2.3, Unregistered Securities
shall continue to be subject to successive registrations and discharges from registration at the
option of the Holders thereof.

     Unregistered Securities shall be transferable by delivery, except while registered as to
principal. Registration of any Coupon Security shall not affect the transferability by delivery of
the Coupons appertaining thereto which shall continue to be payable to bearer and transferable by
delivery.

     All Securities and Coupons, if any, issued upon any transfer or exchange of Securities shall
be the valid obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Securities and Coupons surrendered upon such transfer or
exchange.

     Every Security presented or surrendered for registration of transfer or exchange shall (if so
required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed, by the Holder
thereof or his attorney duly authorized in writing.

     No service charge shall be made for any registration of transfer or exchange of Securities,
but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Securities, other than
exchanges pursuant to Sections 2.11, 8.05 or 11.02 not involving any transfer.

     The Company shall not be required (i) to issue, register the transfer of or exchange any
Security during a period beginning at the opening of business 15 days before the day of mailing of
a notice of redemption of Securities for redemption under Article 11 or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in part, except, in the
case of any Security to be redeemed in part, the portion thereof not redeemed.

     Section 2.09 Mutilated, Defaced, Destroyed, Lost and Stolen Securities. In case any
temporary or definitive Security or Coupon shall become mutilated or defaced or be destroyed, lost
or stolen, the Company at its own discretion may execute, and upon receipt of a Company Order, the
Trustee shall authenticate and deliver, a new Security of the same Series or Coupon, bearing a
number not contemporaneously outstanding, in exchange and substitution for the mutilated or defaced
Security or Coupon, or in lieu of and substitution for the Security or Coupon so destroyed, lost or
stolen. In every case, the applicant for a substitute Security or Coupon shall furnish to the
Company, to the Trustee and to any agent of the Company or the Trustee such security or indemnity
as may be required by them to indemnify and defend and to save each of them harmless and, in every
case of destruction, loss or theft, evidence to their satisfaction of the destruction, loss or
theft of such Security or Coupon and of the ownership thereof.

16

 

     Upon the issuance of any substitute Security or Coupon, the Company may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith.

     In case any Security or Coupon which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or stolen, the Company
may, instead of issuing a substitute Security or Coupon, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated or defaced Security or Coupon);
provided, however, that any such payments in respect of Unregistered Securities or
Coupons shall be subject to the provisions of Section 2.12(c).

     Every substitute Security of any Series or Coupon issued pursuant to the provisions of this
Section 2.09 by virtue of the fact that any such Security or Coupon is destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security or Coupon shall be at any time enforceable by anyone and shall be entitled
to all the benefits of (but shall be subject to all the limitations of rights set forth in) this
Indenture equally and proportionately with any and all other Securities of such Series or Coupons
duly authenticated and delivered hereunder. All Securities or Coupons shall be held and owned upon
the express condition that, to the extent permitted by the law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced, destroyed, lost or
stolen Securities or Coupons and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to
the replacement or payment of negotiable instruments or other securities without their surrender.

     Section 2.10 Cancellation of Securities. All Securities surrendered for payment,
redemption, registration of transfer, conversion or exchange, or for credit against any payment in
respect of a sinking or analogous fund and all Coupons surrendered for payment or exchange, shall,
if surrendered to the Company or any agent of the Company or the Trustee, be delivered to the
Trustee for cancellation or, if surrendered to the Trustee, shall be cancelled promptly by it; and
no Securities or Coupons shall be issued in lieu thereof, except as expressly permitted by any of
the provisions of this Indenture. The Trustee shall dispose of cancelled Securities in accordance
with its customary procedures. If the Company shall acquire any of the Securities and Coupons,
such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented
by such Securities and Coupons unless and until the same are delivered to the Trustee for
cancellation.

     Section 2.11 Temporary Securities. Pending the preparation of definitive Securities
for any Series, the Company may execute and the Trustee shall authenticate and deliver temporary
Securities for such Series (printed, lithographed, typewritten or otherwise reproduced, in each
case in form satisfactory to the Trustee). Temporary Securities of any Series may be issued as
Registered Securities or Unregistered Securities with or without Coupons attached thereto, of any
authorized denomination, and substantially in the form of the definitive Securities of such Series
but with such omissions, insertions and variations as may be appropriate for temporary Securities,
all as may be determined by the Company with the concurrence of the Trustee. Temporary Securities
may contain such reference to any provisions of this Indenture as may be

17

 

appropriate. Every temporary Security shall be executed by the Company and be authenticated
by the Trustee upon the same conditions and in substantially the same manner, and with like effect,
as the definitive Securities. Without unreasonable delay the Company shall execute and shall
furnish definitive Securities of such Series and thereupon temporary Securities of such Series may
be surrendered in exchange therefor without charge at each office or agency to be maintained by the
Company for that purpose pursuant to Section 3.02, and the Trustee shall authenticate and deliver
in exchange for such temporary Securities of such Series a like aggregate principal amount of
definitive Securities of the same Series of authorized denominations and, in the case of
Unregistered Securities, having attached thereto any appropriate Coupons. Until so exchanged, the
temporary Securities of any Series shall be entitled to the same benefits under this Indenture as
definitive Securities of such Series.

     Section 2.12 Currency and Manner of Payments in Respect of Securities.

          (a) With respect to Registered Securities of any Series with respect to which the Holders of
such Securities have not made the election provided for in subsection (b) of this Section 2.12, the
following payment provisions shall apply:

          (i) Except as provided in subsection (a)(ii) or subsection (e) of this Section 2.12,
payment of the principal of any Registered Security will be made at the Place of Payment by
delivery of a check in the Currency in which the Security is denominated on the payment date
against surrender of such Registered Security, or, if the Securities are global securities,
in accordance with the procedures of the applicable clearing agency pursuant to Section
2.15, and any interest on any Registered Security will be paid at the Place of Payment by
mailing a check in the Currency in which the Securities were issued to the Person entitled
thereto at the address of such Person appearing on the Security register.

          (ii) Payment of the principal of and interest on such Security may also, subject to
applicable laws and regulations, be made at such other place or places as may be designated
by the Company by any appropriate method.

          (b) With respect to Registered Securities of any Series, the following payment provisions
shall apply, except as otherwise provided in subsections (e) and (f) of this Section 2.12 :

          (i) The Company Board of Directors may provide with respect to any Series of such
Securities that Holders shall have the option to receive payments of principal of and
interest on such Security in any of the Currencies which may be designated for such election
in such Security (or, if no such Currencies are designated, in the Currency in which the
Securities of such Series are denominated) by delivering to the Trustee a written election,
to be in substantially the form included with the applicable form of Securities as shall be
established pursuant to Section 2.01, not later than the close of business on the record
date immediately preceding the applicable payment date. Such election will remain in effect
for such Holder until changed by the Holder by written notice to the Trustee (but any such
change must be made not later than the close of business on the record date immediately
preceding the next payment date to be effective

18

 

for the payment to be made on such payment date and no such change may be made with
respect to payments to be made on any Security with respect to which notice of redemption
has been given by the Company pursuant to Article 11) . Any Holder of any such Security who
shall not have delivered any such election to the Trustee by the close of business on the
applicable record date will be paid the amount due on the applicable payment date in the
relevant Currency as provided in subsection (a) of this Section 2.12. Payment of principal
shall be made on the payment date against surrender of such Securities. Payment of
principal and interest shall be made at the Place of Payment by mailing a check in the
applicable Currency to the Person entitled thereto at the address of such Person appearing
on the Security register.

          (ii) Payment of the principal of and interest on such Security may also, subject to
applicable laws and regulations, be made at such other place or places as may be designated
by the Company by any appropriate method.

          (c) Payment of the principal of any Unregistered Security and of interest on any Coupon
Security will be made at such place or places outside the United States of America as may be
designated by the Company by any appropriate method only in the Currency in which the Security is
payable (except as provided in subsection (e) of this Section 2.12) on the payment date against
surrender of the Unregistered Security, in the case of payment of principal, or the relevant
Coupon, in the case of payment of interest. Except as provided in subsection (e) of this Section
2.12, payment with respect to Unregistered Securities and Coupons will be made by check, subject to
any limitations on the methods of effecting such payment as shall be specified in the terms of the
Security established as provided in Section 2.3 and as shall be required under applicable laws and
regulations. Payment of the principal of and interest on Unregistered Securities may also, subject
to applicable laws and regulations, be made at such other place or places as may be designated by
the Company by any appropriate method.

          (d) Not later than the fourth Business Day after the record date for each payment date, the
Trustee will deliver to the Company a written notice specifying, in the Currency in which each
Series of Securities are denominated, the respective aggregate amounts of principal of and interest
on the Securities to be made on such payment date, specifying the amounts so payable in respect of
the Registered and the Unregistered Securities and in respect of the Registered Securities as to
which the Holders shall have elected to be paid in another Currency as provided in subsection (b)
of this Section 2.12. If the Company Board of Directors has provided for the election referred to
in subsection (b) of this Section 2.12 with respect to Registered Securities and if at least one
Holder of such Registered Securities has made such election, then not later than the second
Business Day preceding the applicable payment date the Company will deliver to the Trustee an
Exchange Rate Officer’s Certificate in respect of such payment date. The Dollar or Foreign
Currency amount receivable by Holders of Registered Securities who have elected payment in another
Currency as provided in subsection (b) of this Section 2.12 shall be determined by the Company on
the basis of the applicable Market Exchange Rate in effect on the second Business Day (the
“Valuation Date”) prior to such payment date and set forth in the applicable Exchange Rate
Officer’s Certificate. For purposes of this Section 2.12 and Section 6.02(a), “Exchange Rate
Officer’s Certificate” means, with respect to any payment date in respect of Registered Securities
as to which the Company Board of Directors has provided for the election referred to in subsection
(b) of this Section 2.12 and at

19

 

least one Holder of such Registered Securities has made such election, a certificate setting
forth (i) the applicable Market Exchange Rate to Holders of such Registered Securities who had
elected payment in a Currency other than the Currency in which such Registered Securities are
denominated as determined by the Company and (ii) the Dollar or Foreign Currency amounts payable
for the Valuation Date with respect to such payment date on the basis of such Market Exchange Rate
or quotation in respect of the principal of and interest on the applicable Series of Registered
Securities, signed by the treasurer or any assistant treasurer of the Company, and delivered to the
Trustee. For purposes of this Section 2.12 and Section 14.11, “Market Exchange Rate” means for any
Currency as of a particular date, the noon Dollar buying rate for such Currency for cable transfers
quoted in New York City on such date as certified for customs purposes by the Federal Reserve Bank
of New York; provided, however, that if such rate is not available for any reason
on such date, the Currency Determination Agent shall determine the Market Exchange Rate for the
particular date, in its sole discretion and without liability on its part, based on such quotation
of the Federal Reserve Bank of New York as of the most recent available date, or quotations from
one or more major banks in New York City or in the country of issue of the currency in question, or
such other quotations as the Currency Determination Agent shall deem appropriate. Unless otherwise
specified by the Currency Determination Agent, if there is more than one market for dealing in any
Currency by reason of foreign exchange regulations or otherwise, the market to be used in respect
of such Currency shall be that upon which a nonresident issuer of securities designated in such
Currency would purchase such Currency in order to make payments in respect of such securities.

          (e) If a Conversion Event occurs with respect to a Foreign Currency in which any of the
Securities are denominated or payable, then with respect to each date for the payment of principal
of and interest on such Securities occurring after the last date on which the Foreign Currency was
so used (the “Conversion Date”), the Dollar shall be the Currency of payment for use on each such
payment date. The Dollar amount to be paid by the Company to the Trustee and by the Trustee or any
Paying Agent to the Holders of such Securities with respect to such payment date shall be the
Dollar Equivalent of the Foreign Currency as determined by the Currency Determination Agent in the
manner provided in subsection (g) of this Section 2.12.

          (f) If the Holder of a Registered Security elects payment in a specified Currency as provided
for by subsection (b) of this Section 2.12 and a Conversion Event occurs with respect to such
elected Currency, such Holder shall receive payment in the Currency in which payment would have
been made in the absence of such election; and if a Conversion Event occurs with respect to the
Currency in which payment would have been made in the absence of such election, such Holder shall
receive payment in Dollars in the Dollar Equivalent of the Foreign Currency as determined by the
Currency Determination Agent in the manner provided in subsection (g) of this Section 2.12.

          (g) The “Dollar Equivalent of the Foreign Currency” shall be determined by the Currency
Determination Agent as of each Valuation Date and shall be obtained by converting the applicable
Foreign Currency into Dollars at the Market Exchange Rate on the Conversion Date.

          (h) All decisions and determinations of the Currency Determination Agent regarding the Dollar
Equivalent of the Foreign Currency and the Market Exchange Rate as

20

 

specified above shall be in its sole discretion and shall, in the absence of manifest error,
be conclusive for all purposes and irrevocably binding upon the Company, the Trustee and all
Holders of the applicable Securities.

          (i) In the event that a Conversion Event has occurred with respect to a Foreign Currency, the
Company, after learning thereof, will immediately give notice thereof to the Trustee (and the
Trustee will promptly thereafter give notice on behalf of the Company in the manner provided in
Section 14.04 to the affected Holders) specifying the Conversion Date.

          (j) The Trustee shall be fully justified and protected in relying on and acting upon the
information so received by it from the Company and the Currency Determination Agent and shall not
otherwise have any duty or obligation to determine such information independently.

     Section 2.13 Compliance with Certain Laws and Regulations. If any Unregistered
Securities or Coupon Securities are to be issued in any Series of Securities, the Company will use
reasonable efforts to provide for arrangements and procedures designed pursuant to then applicable
laws and regulations, if any, to ensure that Unregistered Securities or Coupon Securities are sold
or resold, exchanged, transferred and paid only in compliance with such laws and regulations and
without adverse consequences to the Company.

     Section 2.14 CUSIP Numbers. The Company in issuing the Securities may use “CUSIP” or
“ISIN” numbers (if then generally in use), and, if so, the Trustee shall indicate the “CUSIP” or
“ISIN” numbers of the Securities in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained in any notice of
redemption and that reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or omission of such
numbers. The Company shall promptly notify the Trustee of any change in the “CUSIP” or “ISIN”
numbers.

     Section 2.15 Securities in Global Form. Unless otherwise provided in or pursuant to
this Indenture or any Securities, the Securities shall be issuable in temporary or permanent global
form. If Securities of or within a Series are issuable in whole or in part in global form, any
such Security may provide that it shall represent the aggregate amount of Outstanding Securities of
such Series (or such lesser amount as is permitted by the terms thereof) from time to time endorsed
thereon and may also provide that the aggregate amount of Outstanding Securities represented
thereby may from time to time be reduced or increased to reflect exchanges. Any endorsement of a
Security in global form to reflect the amount, or any increase or decrease in the amount, or
changes in the rights of Holders, of Outstanding Securities represented thereby, shall be made in
such manner and by such Person or Persons as shall be specified therein or in the Company Order to
be delivered to the Trustee pursuant to Section 2.04. Subject to the provisions of Section 2.04
and, if applicable, Section 2.11, 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 therein or
in the applicable Company Order, if any. 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 14.05 and need not be accompanied by an Opinion of Counsel.

21

 

     The provisions of the last paragraph of Section 2.04 shall apply to any Security in global
form if such Security was never issued and sold by the Company and the Company delivers to the
Trustee the Security in global form together with written instructions (which need not comply with
Section 14.5 and need not be accompanied by an Opinion of Counsel) with regard to the reduction in
the principal amount of Securities represented thereby, together with the written statement
contemplated by the last paragraph of Section 2.04.

     Notwithstanding the provisions of Section 3.01, unless otherwise specified as contemplated by
Section 2.04, payment of principal of and interest on any Security in permanent global form shall
be made to the Person or Persons specified in such Security.

     Neither the Company nor the Trustee shall have any responsibility or obligation to any Person
claiming a beneficial ownership interest in the Securities under or through any clearing agency or
any other Person which is not shown on the Security register as being a Registered Holder with
respect to either the Securities, the accuracy of any records maintained by any such clearing
agency, the payment by any such clearing agency or its participants of any amount in respect of the
principal of or interest on the Securities, any notice which is permitted or required to be given
under the Indenture, any consent given or other action taken by such clearing agency as Registered
Holder, or any selection by such clearing agency of any Person to receive payment of principal,
interest or other amounts payable on the Securities.

     Section 2.16 Form of Conversion Notice. The form of any conversion notice for the
conversion of Securities into shares of Common Stock, Preferred Stock or other securities of the
Company shall be in substantially the form included with the applicable form of Securities as shall
be established pursuant to Section 2.01.

ARTICLE 3

COVENANTS OF THE ISSUER

     Section 3.01 Payment of Principal and Interest. The Company covenants and agrees for
the benefit of each Series of Securities that it will duly and punctually pay or cause to be paid
(in the currency in which the Securities of such Series and Coupons, if any, are payable, except as
otherwise provided pursuant to Section 2.03 for the Securities of such Series and except as
provided in Section 2.12(b), (e) and (f)) the principal of, and interest on, each of the
Securities of such Series in accordance with the terms of the Securities of such Series, any
Coupons appertaining thereto and this Indenture.

     The interest on Unregistered Securities shall be payable only upon presentation and surrender
of the several Coupons for such interest installments as are evidenced thereby as they severally
mature at the office of a Paying Agent outside the United States of America. The interest on any
temporary Unregistered Security shall be paid, as to any installment of interest evidenced by a
Coupon attached thereto, if any, only upon presentation and surrender of such Coupon, and, as to
the other installments of interest, if any, only upon presentation of such Securities for notation
thereon of the payment of such interest.

     Section 3.02 Offices for Payment, etc. So long as any of the Securities remain
Outstanding, the Company will maintain the following for each Series: an office or agency

22

 

(a) where the Securities may be presented for payment, (b) where the Securities may be presented
for registration of transfer and for exchange as in this Indenture provided, and (c) where notices
and demands to or upon the Company in respect of the Securities or of this Indenture may be served.
The Company will give to the Trustee written notice of the location of any such office or agency
and of any change of location thereof. In case the Company shall fail to so designate or maintain
any such office or agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made at the Place of Payment and notices may be
served at the Corporate Trust Office. Unless otherwise specified pursuant to Section 2.03, the
Trustee is appointed Paying Agent and Registrar.

     So long as any Coupon Securities or Unregistered Securities of any Series remain Outstanding,
the Company will (except as specified pursuant to Section 2.03) maintain one or more offices or
agencies outside the United States of America in such city or cities as may be specified elsewhere
in this Indenture or as contemplated by Section 2.03, and shall maintain such office or offices for
a period of two years (or any period thereafter for which it is necessary in order to conform to
United States tax laws or regulations) after the principal on such Coupon Securities or
Unregistered Securities has become due and payable, with respect to such Series where Coupons
appertaining to Securities of such Series or Unregistered Securities of such Series may be
surrendered or presented for payment, or surrendered for exchange pursuant to Section 2.08 and
where notices and demands to or upon the Company in respect of Coupons appertaining to Securities
of such Series or the Unregistered Securities of such Series or of this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and any change in the
location, of any such office or agency. If at any time the Company shall fail to maintain such
required office or agency or shall fail to furnish the Trustee with the address thereof,
presentations, surrenders and demands in respect of Unregistered Securities may be made or served
at the Place of Payment and notice may be served at the Corporate Trust Office and the corporate
trust office of any authenticating agent appointed, and presentations, surrenders, notices and
demands in respect of Coupons appertaining to Securities of any Series and Unregistered Securities
may be made or served at the corporate trust office of the Trustee in the other city or cities
referred to above; and the Company hereby appoints the Trustee and any authenticating agent
appointed hereunder as its agents to receive all such presentations, surrenders, notices and
demands.

     Section 3.03 Appointment to Fill a Vacancy in Office of Trustee. The Company,
whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner
provided in Section 6.10, a Trustee, so that there shall at all times be a Trustee with respect to
each Series of Securities hereunder.

     Section 3.04 Paying Agents. Whenever the Company shall appoint a Paying Agent other
than the Trustee with respect to the Securities of any Series, it will cause such Paying Agent to
execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section 3.04:

          (a) that it will hold all sums received by it as such Paying Agent for the payment of the
principal of or interest on the Securities of such Series or Coupons (whether such sums have been
paid to it by the Company or other obligor on the Securities of such Series or Coupons) in trust
for the benefit of the Holders of the Securities of such Series or Coupons or of

23

 

the Trustee, and upon the occurrence of an Event of Default and upon the written request of
the Trustee, pay over all such sums received by it to the Trustee;

          (b) that it will give the Trustee notice of any failure by the Company (or by any other
obligor on the Securities of such Series) to make any payment of the principal of or interest on
the Securities of such Series or Coupons when the same shall be due and payable; and

          (c) that it will give the Trustee notice of any change of address of any Holder of which it is
aware.

     The Company will, on or prior to each due date of the principal of or interest on the
Securities of such Series or Coupons, deposit with the Paying Agent a sum sufficient to pay such
principal or interest so becoming due, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of any failure to take such action.

     If the Company shall act as its own Paying Agent with respect to the Securities of any Series
or Coupons, it will, on or before each due date of the principal of or interest on the Securities
of such Series or Coupons, set aside, segregate and hold in trust for the benefit of the Holders of
the Securities of such Series or Holders of such Coupons a sum sufficient to pay such principal or
interest so becoming due. The Company will promptly notify the Trustee of any failure to take such
action.

     Anything in this Section 3.04 to the contrary notwithstanding, the Company may at any time,
for the purpose of obtaining a satisfaction and discharge with respect to one or more or all Series
of Securities or Coupons hereunder, or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust for any such Series by the Company or any Paying Agent hereunder, as
required by this Section 3.04, such sums to be held by the Trustee upon the trusts herein
contained.

     Anything in this Section 3.04 to the contrary notwithstanding, the agreement to hold sums in
trust as provided in this Section 3.04 is subject to the provisions of Sections 10.04 and 10.05.

     Section 3.05 Additional Amounts. If Securities of a Series provide for the payment of
additional amounts to any Holder who is not a United States Person in respect of any tax,
assessment or governmental charge (“Additional Amounts”), the Company will pay to the Holder of any
Security of such Series or any Coupon appertaining thereto such Additional Amounts as may be so
provided by Section 2.03. Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of or interest on, or in respect of, any Security of a Series or payment
of any related Coupon or the net proceeds received on the sale or exchange of a Security of a
Series, such mention shall be deemed to include mention of the payment of Additional Amounts
provided for by the terms of such Series established pursuant to Section 2.03 to the extent that,
in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to
such terms and express mention of the payment of Additional Amounts (if applicable) in any
provisions shall not be construed as excluding Additional Amounts in those provisions where such
express mention is not made.

24

 

     Except as otherwise specified pursuant to Section 2.03, if the Securities of a Series provide
for the payment of Additional Amounts, at least 10 days prior to each date of payment of principal
or interest on which any Additional Amount shall be payable, the Company will furnish the Trustee
and the Company’s principal Paying Agent or Paying Agents, if other than the Trustee, with a
Company Officers’ Certificate instructing the Trustee and such Paying Agent or Paying Agents
whether such payment of principal of or interest on the Securities of that Series shall be made to
Holders of Securities of that Series or any related Coupons who are not United States Persons
without withholding for or on account of any tax, assessment or other governmental charge described
in the Securities of that Series. If any such withholding shall be required, then such Company
Officers’ Certificate shall specify by country the amount, if any, required to be withheld on such
payments to such Holders of Securities of that Series or related Coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms of such
Securities. The Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred without negligence or bad
faith on their part arising out of or in connection with actions taken or omitted by any of them in
reliance on any Company Officers’ Certificate furnished pursuant to this Section 3.05 or in the
event the Trustee shall not withhold or deduct any sums as a result of not receiving a Company
Officers’ Certificate pursuant to this Section 3.05.

     Section 3.06 Calculation of Original Issue Discount. The Company shall promptly, at
the end of each calendar year, calculate the Original Issue Discount accrued on Outstanding
Securities as of the end of such year and shall determine whether the amount of Original Issue
Discount qualifies for the de minimis exception rule as set forth in Section 1273(a)(3) of the
Internal Revenue Code of 1986, as amended from time to time, and the Treasury Regulations
promulgated thereunder. If such calculated amount does not qualify for the de minimis exception
rule, then the Company shall subsequently file with the Trustee no later than January 15th of each
calendar year (a) a written notice specifying the amount of Original Issue Discount (including
daily rates and accrual periods) accrued on Outstanding Securities as of the end of such year and
(b) such other specific information relating to such Original Issue Discount as may then be
relevant under the Internal Revenue Code of 1986, as amended from time to time, and the Treasury
Regulations promulgated thereunder.

ARTICLE 4

SECURITYHOLDERS’ LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE

     Section 4.01 Company to Furnish Trustee Information as to Names and Addresses of
Securityholders. The Company covenants and agrees that it will furnish or cause to be furnished to
the Trustee for the Securities of each Series a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders of the Registered Securities of each Series:

          (a) semiannually and not more than 15 days after each record date for the payment of interest
on such Securities, as hereinabove specified, as of such record date, and on dates to be determined
pursuant to Section 2.03 for non-interest bearing securities in each year; and

25

 

          (b) at such other times as the Trustee may request in writing, within 30 days after receipt by
the Company of any such request, and such list shall be as of a date not more than 15 days prior to
the time such information is furnished;

     provided that, if and so long as the Trustee shall be the Security registrar for such
Series, such list shall not be required to be furnished but in any event the Company shall be
required to furnish such information concerning the Holders of Coupon Securities and Unregistered
Securities which is known to it; provided, further, that the Company shall have no
obligation to investigate any matter relating to any Holder of an Unregistered Security or any
Holder of a Coupon.

     Section 4.02 Preservation and Disclosure of Securityholders’ Lists.

          (a) The Trustee for the Securities of each Series shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the Holders of each Series
of Securities contained in the most recent list furnished to it as provided in Section 4.01 or
maintained by the Trustee in its capacity as Security registrar for such Series, if so acting. The
Trustee may destroy any list furnished to it as provided in Section 4.01 upon receipt of a new list
so furnished.

          (b) In case three or more Holders of Registered Securities of any Series (hereinafter referred
to as “applicants”) apply in writing to the Trustee and furnish to the Trustee reasonable proof
that each such applicant has owned a Security for a period of at least six months preceding the
date of such application, and such application states that the applicants desire to communicate
with other Holders of Securities of a particular Series (in which case the applicants must all hold
Securities of such Series) or with Holders of all Securities with respect to their rights under
this Indenture or under such Securities and such application is accompanied by a copy of the form
of proxy or other communication which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its election, either:

          (i) afford to such applicants access to the information preserved at the time by the
Trustee in accordance with the provisions of subsection (a) of this Section 4.02, or

          (ii) inform such applicants as to the approximate number of Holders of Securities of
such Series or all Securities, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee, in accordance with the provisions of
subsection (a) of this Section 4.2, and as to the approximate cost of mailing to such
Securityholders the form of proxy or other communication, if any, specified in such
application.

     If the Trustee shall elect not to afford to such applicants access to such information, the
Trustee shall, upon the written request of such applicants, mail to each Securityholder of such
Series or all Securities, as the case may be, whose name and address appear in the information
preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this
Section 4.02, a copy of the form of proxy or other communication which is specified in such

26

 

request, with reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender, the Trustee shall mail to such applicants and file with the Commission
together with a copy of the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of the Holders of
Securities of such Series or all Securities, as the case may be, or could be in violation of
applicable law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of
such order sustaining one or more of such objections, the Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained have been met, and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such Securityholders with
reasonable promptness after the entry of such order and the renewal of such tender; otherwise the
Trustee shall be relieved of any obligation or duty to such applicants respecting their
application.

          (c) Each and every Holder of Securities, by receiving and holding the same, agrees with the
Company and the Trustee that none of the Company, the Trustee or any agent of the Company or the
Trustee shall be held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Securities in accordance with the provisions of subsection
(b) of this Section 4.02, regardless of the source from which such information was derived, and
that the Trustee shall not be held accountable by reason of mailing any material pursuant to a
request made under such subsection (b).

     Section 4.03 Reports by the Company.

          (a) The Company covenants to:

          (i) file with the Trustee for the Securities of each Series, within 15 days after the
Company is required to file the same with the Commission (giving effect to any extensions
thereof), copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from time to time
by rules and regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act, or if the Company is
not required to file information, documents or reports pursuant to either of such Sections,
then to file with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and periodic
information, documents, and reports which may be required pursuant to Section 13 of the
Exchange Act, or in respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and regulations;

          (ii) file with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and regulations;

27

 

          (iii) transmit by mail to the Holders of Registered Securities in the manner and to the
extent required by Sections 4.04(a) and 14.04, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required to be filed
by the Company pursuant to subsections (a)(i) and (a)(ii) of this Section 4.03 as may be
required to be transmitted to such Holders by rules and regulations prescribed from time to
time by the Commission; provided that any such information, documents or reports
filed or furnished with the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval (or EDGAR) system shall be deemed to be filed with the Trustee and Holders as
of the time such information, documents or reports are filed or furnished by EDGAR; and

          (iv) furnish to the Trustee, not less often than annually on or before a date not more
than four months after the end of each of its fiscal years ending after the date hereof, a
brief certificate from the principal executive officer, principal financial officer or
principal accounting officer of the Company as to his or her knowledge of the Company’s
compliance with all conditions and covenants under this Indenture. For purposes of this
subsection (a)(iv), such compliance shall be determined without regard to any period of
grace or requirement of notice provided under this Indenture.

          (b) Delivery of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to
rely exclusively on Company Officers’ Certificates).

     Section 4.04 Reports by the Trustee.

          (a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within 60 days after each May 15 following the date of this Indenture deliver to
Holders a brief report, dated as of such May 15, which complies with the provisions of such Section
313(a).

          (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by
the Trustee with each stock exchange, if any, upon which the Securities are listed, with the
Commission and with the Company. The Company will promptly notify the Trustee when the Securities
are listed on any stock exchange or market and of any delisting thereof.

ARTICLE 5

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

ON EVENT OF DEFAULT

     Section 5.01 Event of Default Defined; Acceleration of Maturity; Waiver of Default.
In case one or more of the following Events of Default (unless it is either inapplicable to a
particular Series or it is specifically deleted from or modified in the indenture supplement, the

28

 

Company Board Resolution or other instrument establishing such Series and the form of Security
for such Series) shall have occurred and be continuing with respect to any Series of Securities,
that is to say:

          (a) default in the payment of any installment of interest upon any Security of such Series as
and when the same shall become due and payable, and continuance of such default for a period of 30
days; or

          (b) default in the payment of the principal of the Securities of such Series as and when the
same shall become due and payable either at maturity, upon redemption (for any sinking fund payment
or otherwise), by declaration or otherwise; or

          (c) failure on the part of the Company duly to observe or perform any other of the covenants
or agreements on the part of the Company in the Securities of such Series, or in this Indenture
contained and relating to such Series, for a period of 90 days after the date on which written
notice specifying such failure and requiring the Company to remedy the same and stating that such
notice is a “Notice of Default” hereunder shall have been given by registered or certified mail to
the Company by the Trustee for the Securities of such Series, or to the Company and the Trustee by
the Holders of not less than 25% in aggregate principal amount at maturity of the Securities of
such Series then Outstanding; or

          (d) the Company shall make an assignment for the benefit of creditors, or shall file a
petition in bankruptcy; or the Company shall be adjudicated insolvent or bankrupt, or shall
petition or shall apply to any court having jurisdiction in the premises for the appointment of a
receiver, trustee, liquidator or sequestrator of, or for, the Company or any substantial portion of
the property of the Company; or the Company shall commence any proceeding relating to the Company
or any substantial portion of the property of the Company under any insolvency, reorganization,
arrangement or readjustment of debt, dissolution, winding-up, adjustment, composition or
liquidation law or statute of any jurisdiction, whether now or hereafter in effect (hereinafter in
this clause (d) called “Proceeding”); or if there shall be commenced against the Company any
Proceeding and an order approving the petition shall be entered, or such Proceeding shall remain
undischarged or unstayed for a period of 90 days; or a receiver, trustee, liquidator or
sequestrator of, or for, the Company or any substantial portion of the property of the Company
shall be appointed and shall not be discharged or unstayed within a period of 90 days; or the
Company by any act shall indicate consent to or approval of or acquiescence in any Proceeding or
the appointment of a receiver, trustee, liquidator or sequestrator of, or for, the Company or any
substantial portion of the property of the Company; provided that a resolution or order for
winding-up the Company with a view to its consolidation, amalgamation or merger with another entity
or the transfer of its assets as a whole, or substantially as a whole, to such other entity as
provided in Section 9.01 shall not make the rights and remedies herein enforceable under this
clause (d) if such last-mentioned entity shall, as a part of such consolidation, amalgamation,
merger or transfer, and within 90 days from the passing of the resolution or the date of the order,
comply with the conditions to that end stated in Section 9.1; or

          (e) any other Event of Default provided in the supplemental indenture or Company Board
Resolution under which such Series of Securities is issued or in the form of Security for such
Series;

29

 

     then and in each and every such case (other than an Event of Default under clause (d) above),
so long as such Event of Default with respect to such Series shall not have been remedied or
waived, unless the principal of all Securities of such Series shall have already become due and
payable, either the Trustee for such Series or the Holders of not less than 25% in aggregate
principal amount at maturity of the Securities of such Series then Outstanding hereunder, by notice
in writing to the Company (and to the Trustee if given by such Holders), may declare the principal
(or, in the case of Original Issue Discount Securities, such principal amount as may be determined
in accordance with the terms thereof) of all the Securities of such Series to be due and payable
immediately, and upon any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Securities of such Series contained to the contrary
notwithstanding. With respect to an Event of Default described under clause (d) above, the
principal of all Securities of such Series shall become immediately due and payable without any
declaration or other act by the Trustee or the Holders. This provision, however, is subject to the
condition that if at any time after the principal of the Securities of such Series (or, in the case
of Original Issue Discount Securities, such principal amount as may be determined in accordance
with the terms thereof) shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay in the
Currency in which the Securities of such Series are payable (except as otherwise provided pursuant
to Section 2.03 for the Securities of such Series and except as provided in Section 2.12(b), (e)
and (f)) all matured installments of interest, if any, upon all the Securities of such Series and
the principal of any and all Securities of such Series which shall have become due otherwise than
by such acceleration (with interest upon such principal and, to the extent that payment of such
interest is enforceable under applicable law, upon overdue installments of interest, at the rate
borne by the Securities of such Series (or, in the case of Original Issue Discount Securities, at
the yield to maturity) to the date of such payment or deposit) and in Dollars such amount as shall
be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel
and all other expenses and liabilities incurred, and all advances made, by the Trustee, its agents,
attorneys and counsel and any and all defaults under this Indenture, other than the nonpayment of
the principal of Securities of such Series which shall have become due by such acceleration, shall
have been remedied then and in every such case the Holders of a majority in aggregate principal
amount at maturity of the Securities of such Series then Outstanding, by written notice to the
Company and to the Trustee for the Securities of such Series, may waive all defaults and rescind
and annul such declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right consequent
thereon.

     Section 5.02 Collection of Indebtedness by Trustee; Trustee May Prove Debt. The
Company covenants that (a) in case default shall be made in the payment of any installment of
interest on any of the Securities of any Series when such interest shall have become due and
payable, and such default shall have continued for a period of 30 days or (b) in case default shall
be made in the payment of all or any part of the principal of any of the Securities of any Series
when the same shall have become due and payable, whether upon maturity of the Securities of such
Series or upon any redemption or by declaration or otherwise, then upon demand of the Trustee for
the Securities of such Series, the Company will pay to the Trustee for the Securities of such
Series for the benefit of the Holders of the Securities of such Series and the Holders of any
Coupons appertaining thereto the whole amount that then shall have become due and

30

 

payable on all Securities of such Series or such Coupons for principal of or interest, as the
case may be (with interest to the date of such payment upon the overdue principal and, to the
extent that payment of such interest is enforceable under applicable law, on overdue installments
of interest at the same rate as the rate of interest specified in the Securities of such Series);
and in addition thereto, such further amount as shall be sufficient to cover the costs and expenses
of collection, including reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and any expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee.

     Until such demand is made by the Trustee, the Company may pay the principal of and interest on
the Securities of any Series to the Persons entitled thereto, whether or not the principal of and
interest on the Securities of such Series are overdue.

     In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee for
the Securities of such Series, in its own name and as trustee of an express trust, shall be
entitled and empowered to institute any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such action or proceedings to
judgment or final decree, and may enforce any such judgment or final decree against the Company or
other obligor upon such Securities and collect in the manner provided by law out of the property of
the Company or other obligor upon such Securities and Coupons, wherever situated, the moneys
adjudged or decreed to be payable.

     In case there shall be pending proceedings relative to the Company or other obligor upon such
Securities and Coupons, if any, under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have
been appointed for or taken possession of the Company or its property or other obligor, or in case
of any other comparable judicial proceedings relative to the Company or other obligor, or to the
creditors or property of the Company or other obligor, the Trustee, irrespective of whether the
principal of any Securities shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the
provisions of this Section 5.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise:

          (a) to file and prove a claim or claims for the whole amount of principal (or, if the
Securities of such Series are Original Issue Discount Securities, such portion of the principal
amount as may be due and payable with respect to the Securities of such Series pursuant to a
declaration in accordance with Section 5.01) and interest owing and unpaid in respect of the
Securities of such Series, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee) and of the Securityholders and the Holders of any
Coupons appertaining thereto allowed in any judicial proceedings relative to the Company or other
obligor upon all Securities of such Series, or to the creditors or property of the Company or other
obligor; and

31

 

          (b) to collect and receive any moneys or other property payable or deliverable on any such
claims, and to distribute all amounts received with respect to the claims of the Securityholders
and of the Trustee on their behalf; and any trustee, receiver or liquidator, custodian or other
similar official is hereby authorized by each of the Holders to make payments to the Trustee for
the Securities of such Series, and, in the event that such Trustee shall consent to the making of
payments directly to the Securityholders, to pay to such Trustee such amounts as shall be
sufficient to cover reasonable compensation to such Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by such Trustee and each predecessor Trustee and all other amounts due to such
Trustee or any predecessor Trustee pursuant to Section 6.06.

     Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities of any Series or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder
in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar Person.

     All rights of action and of asserting claims under this Indenture, or under any of the
Securities or any Coupon appertaining thereto, may be enforced by the Trustee for the Securities of
such Series without the possession of any of the Securities of such Series or any Coupon
appertaining thereto or the production thereof at any trial or other proceedings relative thereto,
and any such action or proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Trustee, each predecessor Trustee and their respective agents
and attorneys, shall be for the ratable benefit of the Holders of the Securities and Holders of any
Coupons in respect of which such action was taken.

     In any proceedings brought by the Trustee for the Securities of such Series (and also any
proceedings involving the interpretation of any provision of this Indenture to which the Trustee
shall be a party), the Trustee shall be held to represent all the Holders of the Securities and
Coupons appertaining thereto in respect to which such action was taken, and it shall not be
necessary to make any Holders of such Securities and Coupons appertaining thereto parties to any
such proceedings.

     Section 5.03 Application of Proceeds. Any moneys collected by the Trustee for the
Securities of such Series pursuant to this Article shall be applied in the following order at the
date or dates fixed by such Trustee and, in case of the distribution of such moneys on account of
principal or interest, upon presentation of the Securities and any Coupons appertaining thereto in
respect of which moneys have been collected and stamping (or otherwise noting) thereon the payment,
or issuing Securities of such Series in reduced principal amounts in exchange for the presented
Securities of like Series if only partially paid, or upon surrender thereof if fully paid:

     FIRST: To the payment of costs and expenses applicable to such Series in respect of which
moneys have been collected, including reasonable compensation to the Trustee and each predecessor
Trustee and their respective agents and attorneys and of all expenses and liabilities incurred,
including the costs and expenses of collection, and all advances made, by the Trustee

32

 

and each predecessor Trustee and all other amounts due to the Trustee or any predecessor
Trustee pursuant to Section 6.06;

     SECOND: In case the principal of the Securities of such Series in respect of which moneys have
been collected shall not have become and be then due and payable, to the payment of interest on the
Securities of such Series in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest is permissible by law and that such
interest has been collected by the Trustee) upon the overdue installments of interest at the same
rate as the rate of interest specified in such Securities, such payments to be made ratably to the
Persons entitled thereto, without discrimination or preference;

     THIRD: In case the principal of the Securities of such Series in respect of which moneys have
been collected shall have become and shall be then due and payable, to the payment of the whole
amount then owing and unpaid upon all the Securities of such Series for principal and interest,
with interest upon the overdue principal, and (to the extent that payment of such interest is
permissible by law and that such interest has been collected by the Trustee) upon overdue
installments of interest at the same rate as the rate of interest specified in the Securities of
such Series; and in case such moneys shall be insufficient to pay in full the whole amount so due
and unpaid upon the Securities of such Series, then to the payment of such principal and interest
without preference or priority of principal over interest or of interest over principal, or of any
installment of interest over any other installment of interest, or of any Security of such Series
over any other Security of such Series, ratably to the aggregate of such principal and accrued and
unpaid interest; and

     FOURTH: To the payment of the remainder, if any, to the Company or to such party as a court of
competent jurisdiction shall direct.

     The Trustee may fix a record date and payment date for any payment to Holders.

     Section 5.04 Suits for Enforcement. In case an Event of Default has occurred, has not
been waived and is continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement
contained in this Indenture or in aid of the exercise of any power granted in this Indenture or to
enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

     Section 5.05 Restoration of Rights on Abandonment of Proceedings. In case the Trustee
for the Securities of any Series shall have proceeded to enforce any right under this Indenture and
such proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, then and in every such case, the Company and the Trustee shall
be restored respectively to their former positions and rights hereunder, and all rights, remedies
and powers of the Company, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.

     Section 5.06 Limitations on Suits by Securityholders. No Holder of any Security of
any Series or Holder of any Coupon shall have any right by virtue or by availing of any provision
of

33

 

this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or
otherwise upon or under or with respect to this Indenture, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any other remedy hereunder, unless
(a) such Holder previously shall have given to the Trustee written notice of default and of the
continuance thereof, as provided in Section 5.01, (b) the Holders of not less than a majority in
aggregate principal amount of the Securities of such Series then Outstanding shall have made
written request upon the Trustee to institute such action or proceedings in its own name as trustee
hereunder, (c) such Holder or Holders shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred therein or thereby,
(d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall
have failed to institute any such action or proceeding, and (e) no direction inconsistent with such
written request shall have been given to the Trustee pursuant to Section 5.09; it being understood
and intended, and being expressly covenanted by the taker and Holder of every Security and by a
Holder of each Coupon appertaining thereto with every other taker and Holder of a Security or
Holder of any Coupon appertaining thereto and the Trustee, that no one or more Holders of
Securities of any Series or one or more Holders of any Coupons appertaining thereto shall have any
right in any manner whatever, by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other such Holder of Securities or any other Holders
of such Coupons, or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except in the manner herein provided and for
the equal, ratable and common benefit of all Holders of Securities of the applicable Series and all
the Holders of Coupons appertaining thereto. For the protection and enforcement of the provisions
of this Section 5.06, each and every Securityholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.

     Section 5.07 Unconditional Right of Securityholders to Institute Certain Suits.
Notwithstanding any provision in this Indenture and any provision of any Security or Coupon, the
right of any Holder of any Security and the right of any Holder of any Coupon appertaining thereto
to receive payment of the principal of and interest on such Security at the respective rates, in
the respective amount and in the Currency therein prescribed on or after the respective due dates
expressed in such Security, or to institute suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the consent of such Holder.

     Section 5.08 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default.
Except as provided in Section 5.06, no right or remedy herein conferred upon or reserved to the
Trustee or to the Securityholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or remedy.

     No delay or omission of the Trustee or of any Securityholder to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such
right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence
therein; and, subject to Section 5.06, every power and remedy given by this

34

 

Indenture or by law to the Trustee, to the Securityholders or to the Holder of any Coupon may
be exercised from time to time, and as often as shall be deemed expedient, by the Trustee, the
Securityholders or Holders of any Coupon.

     Section 5.09 Control by Securityholders. The Holders of a majority in aggregate
principal amount of the Securities of each Series affected (with each Series treated as a separate
class) at the time Outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to the Securities of such Series by this Indenture;
provided that such direction shall not be otherwise than in accordance with law and the
provisions of this Indenture and provided further that (subject to the provisions of Section 6.1)
the Trustee shall have the right to decline to follow any such direction if the Trustee, being
advised by counsel, shall determine that the actions or proceeding so directed may not lawfully be
taken or that the actions or proceedings so directed would involve the Trustee in personal
liability or if a trust committee of Responsible Officers in good faith shall determine that the
actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to
the interests of Holders of the Securities of all Series or of the Holders of any Coupons
appertaining thereto so affected not joining in the giving of said direction, it being understood
that (subject to Section 6.01) the Trustee shall have no duty to ascertain whether or not such
actions or forbearances are unduly prejudicial to such Holders.

     Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any
action deemed proper by the Trustee and which is not inconsistent with such direction or directions
by Securityholders.

     Section 5.10 Waiver of Past Defaults. Prior to the declaration of the acceleration of
the maturity of the Securities of any Series as provided in Section 5.01, the Holders of a majority
in aggregate principal amount of the Securities of such Series at the time Outstanding may on
behalf of the Holders of all the Securities of such Series and Holders of all Coupons, if any,
appertaining thereto waive any past default hereunder or its consequences, except a default in the
payment of principal or interest on any of the Securities of such Series. In the case of any such
waiver, the Company, the Trustee, the Holders of the Securities of such Series and the Holder of
any Coupon appertaining thereto shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.

     Upon any such waiver, such default shall cease to exist and be deemed to have been cured and
not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured
and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right consequent thereon.

     Section 5.11 Trustee to Give Notice of Default, But May Withhold in Certain
Circumstances. The Trustee shall transmit to the Securityholders of any Series notice, in the
manner and to the extent provided in Section 14.04, of all defaults which have occurred with
respect to such Series, such notice to be transmitted within 90 days after the occurrence thereof,
unless such defaults shall have been cured before the giving of such notice (the term “default” or

35

 

“defaults” for the purposes of this Section 5.11 and Section 6.02(h) being hereby defined to
mean any event or condition which is, or with notice or lapse of time or both would become, an
Event of Default); provided that, except in the case of default in the payment of the
principal of or interest on any of the Securities of such Series or any default in the payment of
any sinking fund installment or analogous obligation in respect of any of the Securities of such
Series, the Trustee shall be protected in withholding such notice if and so long as a trust
committee of Responsible Officers of the Trustee in good faith determines that the withholding of
such notice is in the interests of the Securityholders of such Series. In the case of any default
of the character specified in Section 5.01(c) with respect to Securities of such Series, no such
notice to Holders shall be given until at least 30 days after the occurrence thereof.

     5.12 Right of Court to Require Filing of Undertaking to Pay Costs. All parties to this
Indenture agree, and each Holder of any Security and each Holder of any Coupon, by his acceptance
thereof, shall be deemed to have agreed, that any court may in its discretion require, 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, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any
party litigant in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 5.12 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Securityholder or group of
Securityholders of any Series holding in the aggregate more than 10% in aggregate principal amount
of the Securities of such Series, or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of or interest on any Security on or after the due date
expressed in such Security.

ARTICLE 6

CONCERNING THE TRUSTEE

     Section 6.01 Duties and Responsibilities of the Trustee; During Default; Prior to
Default. With respect to the Holders of any Series of Securities issued hereunder, the Trustee,
prior to the occurrence of an Event of Default with respect to the Securities of a particular
Series and after the curing or waiving of all Events of Default which may have occurred with
respect to such Series, undertakes to perform such duties and only such duties as are specifically
set forth in this Indenture. In case an Event of Default with respect to the Securities of a
Series has occurred (which has not been cured or waived) of which a Responsible Officer has actual
knowledge, 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 their exercise, as a prudent individual would exercise
or use under the circumstances in the conduct of such Person’s own affairs.

     No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act or its own willful misconduct, except
that:

          (a) prior to the occurrence of an Event of Default with respect to the Securities of any
Series and after the curing or waiving of all such Events of Default with respect to such Series
which may have occurred:

36

 

          (i) the duties and obligations of the Trustee with respect to the Securities of any
Series shall be determined solely by the express provisions of this Indenture, and the
Trustee need only perform such duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this Indenture against
the Trustee; and

          (ii) in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any statements, certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture; but in the case of any such
statements, certificates or opinions which by any provision are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture;

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

          (c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the Holders pursuant to Section 5.09 relating
to the time, method and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this Indenture.

     None of the provisions contained in this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.

     Whether or not therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the Trustee shall be subject
to the conditions of this Section 6.01.

     Section 6.02 Certain Rights of the Trustee. Subject to Section 6.01 :

          (a) The Trustee may conclusively rely and shall be protected in acting or refraining from
acting upon any Company Board Resolution, Company Officers’ Certificate, Exchange Rate Officers’
Certificate, Company Order, certificate pursuant to Section 4.03(a)(iv) or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note,
coupon, security or other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.

          (b) Any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by a Company Officers’ Certificate (unless other evidence in respect thereof
be herein specifically prescribed).

37

 

          (c) The Trustee may consult with counsel of its selection and any 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 to be taken by it hereunder in good faith and in accordance with
such advice or Opinion of Counsel.

          (d) The Trustee shall be under no obligation to exercise any of the trusts or powers vested in
it by this Indenture at the request, order or direction of any of the Securityholders pursuant to
the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee
security or indemnity satisfactory to it against the costs, expenses and liabilities which might be
incurred therein or thereby.

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

          (f) Prior to the occurrence of any Event of Default hereunder and after the curing or waiving
of all Events of Default, the Trustee shall not be bound to make any investigation into the facts
or matters stated in any Company Board Resolution, Company Officers’ Certificate, Exchange Rate
Officers’ Certificate, certificate pursuant to Section 4.03(a)(iv), Company Order or any other
certificate, statement, instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document unless requested in
writing to do so by the Holders of not less than a majority in aggregate principal amount of the
Securities of all Series affected then Outstanding.

          (g) 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 not regularly in its employ and the
Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder.

          (h) The Trustee shall not be deemed to have notice of any default or Event of Default (other
than any Event of Default under Section 5.01(a) or 5.01(b)) unless a Responsible Officer has
actual knowledge thereof or unless written notice of such default or Event of Default is received
by the Trustee at the Corporate Trust Office of the Trustee.

          (i) The rights, privileges, protections, immunities and benefits given to the Trustee,
including 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.

          (j) The Trustee may request that the Company deliver a Company Officers’ Certificate setting
forth the names of individuals and/or titles of officers authorized at such time to take specified
actions pursuant to this Indenture.

     Section 6.03 Trustee Not Responsible for Recitals, Disposition of Securities or
Application of Proceeds Thereof. The recitals contained herein and in the Securities, except the
Trustee’s certificate of authentication, shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for the correctness of the same. The Trustee makes no

38

 

representation as to the validity or sufficiency of this Indenture or of any Securities or Coupons.
The Trustee represents that it is duly authorized to execute and deliver this Indenture and
perform its obligations hereunder. The Trustee shall not be accountable for the use or application
by the Company of any of the Securities or of the proceeds thereof.

     Section 6.04 Trustee and Agents May Hold Securities; Collections, etc. The Trustee,
any Paying Agent, any Security registrar or any agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities or Coupons with the
same rights it would have if it were not serving in such capacity and, subject to Sections 6.08 and
6.13, if operative, may otherwise deal with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not serving in such
capacity.

     Section 6.05 Moneys Held by Trustee. Subject to the provisions of Section 10.04, all
moneys received by the Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated from other funds except
to the extent required by mandatory provisions of law. Neither the Trustee nor any agent of the
Company or the Trustee shall be under any liability for interest on any moneys received by it
hereunder.

     Section 6.06 Compensation and Indemnification of Trustee and Its Prior Claim. The
Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as shall be agreed in writing between the Company and the Trustee in
Dollars (which shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Company covenants and agrees to pay or reimburse the Trustee
and each predecessor Trustee upon its request in Dollars for all reasonable expenses, disbursements
and advances actually incurred or made by or on behalf of it in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its fraud, negligence or bad
faith. The Company also covenants to indemnify the Trustee and each predecessor Trustee for, and
to hold it harmless against, any and all loss, liability, damage, claim or expense, including taxes
(other than taxes based on the income of the Trustee), actually incurred without fraud, negligence
or bad faith on its part, arising out of or in connection with the acceptance or administration of
this Indenture or the trusts hereunder and its duties hereunder, including the reasonable costs and
expenses of defending itself against or investigating any claim (whether asserted by the Company, a
Holder or any other Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligations of the Company under this Section 6.06 to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for reasonable expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of
this Indenture and the resignation or removal of the Trustee. Such additional indebtedness shall
be a senior claim to that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities
or the Holders of particular Coupons, and the Securities are hereby subordinated to such senior
claim.

39

 

     When the Trustee incurs expenses or renders services in connection with an Event of Default
specified in clause (d) of Section 5.01, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for the services are intended to constitute expenses
of administration under any applicable federal or state bankruptcy, insolvency or other similar
law.

     Section 6.07 Right of Trustee to Rely on Officers’ Certificate, etc. Subject to
Sections 6.01 and 6.02, whenever in the administration of the trusts of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may, in the absence of fraud, negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by a Company Officers’
Certificate delivered to the Trustee, and such Company Officers’ Certificate in the absence of
fraud, negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for
any action taken, suffered or omitted by it or under the provisions of this Indenture upon the
faith thereof.

     Section 6.08 Disqualification of Trustee; Conflicting Interests. If the Trustee for
the Securities of any Series has or shall acquire any conflicting interest, as defined in the Trust
Indenture Act, it shall, within 90 days after ascertaining that it has such conflicting interest,
and if the default (as defined in the Trust Indenture Act) to which such conflicting interest
relates has not been cured or waived or otherwise eliminated before the end of such 90-day period,
the Trustee shall, either eliminate such conflicting interest or resign in the manner and with the
effect specified in the Trust Indenture Act and this Indenture. If the Trustee does not so resign,
each holder of the Securities for any Series for which such Trustee acts as trustee shall have the
rights provided under, and subject to the limitations set forth in, Section 310(b)(iii) of the
Trust Indenture Act. To the extent permitted by the Trust Indenture Act, the Trustee shall not be
deemed to have a conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one Series.

     Section 6.09 Persons Eligible for Appointment as Trustee. The Trustee for each Series
of Securities hereunder shall at all times be a corporation organized and doing business under the
laws of the United States of America or of any State or the District of Columbia having a combined
capital and surplus of at least $100,000,000, and which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by federal, state or District
of Columbia authority and which has a Corporate Trust Office in any State of the United States of
America. If such corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then for the purposes of
this Section 6.09, the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the provisions of this
Section 6.09, the Trustee shall resign immediately in the manner and with the effect specified in
Section 6.10.

40

 

     Section 6.10 Resignation and Removal; Appointment of Successor Trustee.

          (a) No resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until acceptance of such appointment by the
successor Trustee in accordance with Section 6.11.

          (b) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign with
respect to one or more or all Series of Securities by giving written notice of resignation to the
Company and by mailing notice thereof to the Holders in the manner and to the extent provided in
Section 14.04. Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees with respect to the applicable Series by written instrument in
duplicate, authorized by a Company Board Resolution and executed by the Company, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or
trustees. If no successor trustee shall have been so appointed with respect to any Series and have
accepted appointment within 60 days after the mailing of such notice of resignation, the resigning
Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the
appointment of a successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable Series for at least six months may, subject to the
provisions of Section 5.12, on behalf of himself and all others similarly situated, petition any
such court for the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

          (c) In case at any time any of the following shall occur:

          (i) the Trustee shall fail to comply with the provisions of Section 6.08 with respect
to any Series of Securities after written request therefor by the Company pursuant to a
Company Order or by any Securityholder who has been a bona fide Holder of a Security or
Securities of such Series for at least six months unless the Trustee’s duty to resign is
stayed in accordance with the provisions of Section 310(b) of the Trust Indenture Act; or

          (ii) the Trustee shall cease to be eligible in accordance with the provisions of
Section 6.09 and shall fail to resign upon written request by the Company pursuant to a
Company Order or by any Securityholder; or

          (iii) the Trustee shall become incapable of acting with respect to any Series of the
Securities, or shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;

     then, in any such case, the Company may remove the Trustee with respect to the applicable
Series of Securities and appoint a successor trustee for such Series by written instrument, in
duplicate, authorized by a Company Board Resolution and executed by the Company, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 5.12, any Securityholder

41

 

who has been a bona fide Holder of a Security or Securities of such Series for at least six
months may on behalf of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor trustee with respect
to such Series. Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.

          (d) The Holders of a majority in aggregate principal amount of the Securities of each Series
at the time Outstanding may at any time remove the Trustee with respect to Securities of such
Series and appoint a successor trustee with respect to the Securities of such Series by delivering
to the Trustee so removed, to the successor trustee so appointed and to the Company the evidence
provided for in Section 7.01 of the action in that regard taken by the Securityholders.

     If no successor trustee shall have been appointed with respect to such Series within 30 days
after the mailing of such notice of removal, the Trustee being removed may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a successor trustee with
respect to the Securities of such Series.

          (e) Any resignation or removal of the Trustee with respect to any Series and any appointment
of a successor trustee with respect to such Series pursuant to any of the provisions of this
Section 6.10 shall become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.11.

     Section 6.11 Acceptance of Appointment by Successor Trustee. Any successor trustee
appointed as provided in Section 6.10 shall execute and deliver to the Company and to its
predecessor Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee with respect to all or any applicable Series
shall become effective and such successor trustee, without any further act, deed or conveyance,
shall become vested with all rights, powers, duties and obligations with respect to such Series of
its predecessor hereunder, with like effect as if originally named as trustee for such Series
hereunder; but, nevertheless, on the written request of the Company pursuant to a Company Order or
of the successor Trustee, upon payment of its charges then unpaid, the trustee ceasing to act shall
pay over to the successor trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a prior
claim upon all property or funds held or collected by such trustee to secure any amounts then due
it pursuant to the provisions of Section 6.06.

     If a successor trustee is appointed with respect to the Securities of one or more (but not
all) Series, the Company, the predecessor Trustee and each successor trustee with respect to the
Securities of any applicable Series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the predecessor Trustee with respect to the Securities of
any Series as to which the predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this Indenture as shall be

42

 

necessary to provide for or facilitate the administration of the trusts hereunder by more than
one trustee, it being understood that nothing herein or in such supplemental indenture shall
constitute such trustees co-trustees of the same trust and that each such trustee shall be trustee
of a trust or trusts under separate indentures.

     No successor trustee with respect to any Series of Securities shall accept appointment as
provided in this Section 6.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 6.8 and eligible under the provisions of Section 6.9.

     Upon acceptance of appointment by any successor trustee as provided in this Section 6.11, the
Company shall give notice in the manner and to the extent provided in Section 14.04 to the Holders
of Securities of any Series for which such successor trustee is acting as trustee at their last
addresses as they shall appear in the Security register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for by the preceding
sentence may be combined with any notice called for by Section 6.10. If the Company fails to mail
such notice within ten days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Company.

     Section 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee.
Any entity into which the Trustee may be merged or converted or with which it may be consolidated,
or any entity resulting from any merger, conversion or consolidation to which the Trustee shall be
a party, or any entity succeeding to all or substantially all the corporate trust business of the
Trustee, shall become the successor of the Trustee hereunder, provided that such entity
shall be qualified under the provisions of Section 6.08 and eligible under the provisions of
Section 6.09, without the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.

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

     Section 6.13 Preferential Collection of Claims Against the Company. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities),
the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Company (or any such other obligor).

43

 

ARTICLE 7

CONCERNING THE SECURITYHOLDERS

     Section 7.01 Evidence of Action Taken by Securityholders.

          (a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in principal amount of
the Securityholders of any or all Series may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such specified percentage of Securityholders
in person or by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments are delivered to
the Trustee. Proof of execution of any instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Sections 6.01 and 6.2) conclusive
in favor of the Trustee and the Company, if made in the manner provided in this Article.

          (b) The ownership of Registered Securities shall be proved by the Security register.

          (c) The amount of Unregistered Securities held by any Person executing any instrument or
writing as a Securityholder, the numbers of such Unregistered Securities, and the date of his
holding the same may be proved by the production of such Securities or by a certificate executed by
any trust company, bank, broker or member of a national securities exchange (wherever situated), as
depositary, if such certificate is in form satisfactory to the Trustee, showing that at the date
therein mentioned such Person had on deposit with such depositary, or exhibited to it, the
Unregistered Securities therein described; or such facts may be proved by the certificate or
affidavit of the Person executing such instrument or writing as a Securityholder, if such
certificate or affidavit is in form satisfactory to the Trustee. The Trustee and the Company may
assume that such ownership of any Unregistered Security continues until (i) another certificate or
affidavit bearing a later date issued in respect of the same Unregistered Security is produced, or
(ii) such Unregistered Security is produced by some other Person, or (iii) such Unregistered
Security is surrendered in exchange for a Registered Security, or (iv) such Unregistered Security
has been cancelled in accordance with Section 2.10.

     Section 7.02 Proof of Execution of Instruments. Subject to Sections 6.01 and 6.02,
the execution of any instrument by a Securityholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee.

     Section 7.03 Holders to Be Treated as Owners. The Company, the Trustee and any agent
of the Company or the Trustee may deem and treat the Person in whose name any Security shall be
registered upon the Security register for such Series as the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on account of the principal of
and interest on such Security and for all other purposes; and none of the Company, the Trustee or
any agent of the Company or the Trustee shall be affected by any notice to the contrary. All such
payments so made to any such Person, or upon his order, shall be valid, and,

44

 

to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any
such Security.

     Section 7.04 Securities Owned by Company Deemed Not Outstanding. In determining
whether the Holders of the requisite aggregate principal amount of Outstanding Securities of any or
all Series have concurred in any direction, consent or waiver under this Indenture or whether a
quorum is present at a meeting of Holders of Securities, Securities which are owned by the Company
or any other obligor on the Securities with respect to which such determination is being made or by
any Person directly or indirectly controlling or controlled by or under direct or indirect common
control with the Company or any other obligor on the Securities with respect to which such
determination is being made shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination, except that for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver, and for purposes of determining the
presence of a quorum, only Securities which a Responsible Officer actually knows are so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to
act with respect to such Securities and that the pledgee is not the Company or other obligor on
such Securities or any Person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Company or any other obligor on such Securities. In case of a
dispute as to such right, the advice of counsel shall be full protection in respect of any decision
made by the Trustee in accordance with such advice. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly a Company Officers’ Certificate listing and identifying all
Securities, if any, known by the Company to be owned or held by or for the account of any of the
above-described Persons; and, subject to Sections 6.1 and 6.2, the Trustee shall be entitled to
accept such Company Officers’ Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Securities not listed therein are Outstanding for the purpose of any such
determination.

     Section 7.05 Right of Revocation of Action Taken. At any time prior to (but not
after) the evidencing to the Trustee, as provided in Section 7.1, of the taking of any action by
the Holders of the percentage in aggregate principal amount of the Securities of any or all Series,
as the case may be, specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action may, by filing written
notice at the Corporate Trust Office and upon proof of holding as provided in this Article, revoke
such action so far as it concerns such Security. Except as aforesaid, any such action taken by the
Holder of any Security shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Security and of any Securities issued in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon any such Security. Any
action taken by the Holders of the percentage in aggregate principal amount of the Securities of
any or all Series, as the case may be, specified in this Indenture in connection with such action
shall be conclusively binding upon the Company, the Trustee and the Holders of all the Securities
affected by such action.

     Section 7.06 Record Date for Determination of Holders Entitled to Vote. The Company
may, in the circumstances permitted by the Trust Indenture Act, set a record date for the purpose
of determining the Securityholders entitled to give or take any request, demand,

45

 

authorization,
direction, notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Securityholders. If not set by the Company prior to the first
solicitation of a Securityholder made by any Person in respect of any such action, or,
in the case of any such vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list of Holders required to be
provided pursuant to Section 4.01) prior to such first solicitation or vote, as the case may be.
With regard to any record date, only the Holders on such date (or their duly appointed proxies)
shall be entitled to give or take, or vote on, the relevant action.

ARTICLE 8

SUPPLEMENTAL INDENTURES

     Section 8.01 Supplemental Indentures Without Consent of Securityholders. The Company,
when authorized by a Company Board Resolution, and the Trustee for the Securities of any or all
Series may, from time to time and at any time, enter into one or more indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in force at the date of
the execution thereof), in form satisfactory to such Trustee, for one or more of the following
purposes:

          (a) to evidence the succession of another entity to the Company or successive successions, and
the assumption by such entity of the covenants, agreements and obligations of the Company herein
and in the Securities;

          (b) to add to the Events of Default such further Events of Default for the protection of the
Holders of Securities of any or all Series (and, if such Events of Default are to be for the
benefit of less than all the Series of Securities stating that such Events of Default are being
added solely for the benefit of one or more particular Series); provided, that, in respect
of any such additional Events of Default, such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer than that allowed in the case
of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may
limit the remedies available to the Trustee upon such an Event of Default or may limit the rights
of the Holders of the applicable Securities upon such an Event of Default;

          (c) to add to the covenants of the Company such further covenants for the protection of the
Holders of Securities of any or all Series (and, if such additional covenants are to be for the
benefit of less than all the Series of Securities stating that such covenants are being added
solely for the benefit of one or more particular Series), or to surrender any right or power herein
conferred upon the Company with regard to all or any Securities of any or all Series (and, if such
surrender is to be for the benefit of less than all the Series of Securities stating that such
surrender is being added solely for the benefit of one or more particular Series);

          (d) to cure any ambiguity or to correct or supplement any provision contained herein or in any
supplemental indenture which may be defective or inconsistent with any other provision contained
herein or in any supplemental indenture; or to make such other provisions in regard to matters or
questions arising under this Indenture or under any supplemental indenture as the Company Board of
Directors may deem necessary or desirable and which shall not

46

 

materially and adversely affect the interests of the Holders of the Securities or the Holders of any Coupons;

          (e) to establish the form, terms and conditions of Securities of any Series, the Coupons, if
any, as permitted by Sections 2.01 and 2.03;

          (f) 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 the one Trustee, pursuant to the requirements of Section 6.11;

          (g) to delete, modify or add provisions of this Indenture, provided that, except as
otherwise contemplated by Section 2.03, such deletion, modification or addition does not apply to
any Outstanding Security of any Outstanding Security created prior to the date of such supplemental
indenture;

          (h) to secure, or, if applicable, provide additional security for, any Securities and to
provide for matters relating thereto, and to provide for the release of any collateral as security
for any Securities; or

          (i) to amend or supplement any provision contained herein, which was required to be contained
herein in order for this Indenture to be qualified under the Trust Indenture Act, if the Trust
Indenture Act or regulations thereunder change what is so required to be included in qualified
indentures, in any manner not inconsistent with what then may be required for such qualification.

     The Trustee is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and stipulations which may be
therein contained and to accept collateral thereunder, but the Trustee shall not be obligated to
enter into any such supplemental indenture which affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise.

     Any supplemental indenture authorized by the provisions of this Section 8.1 may be executed
without the consent of the Holders of any of the Securities at the time Outstanding,
notwithstanding any of the provisions of Section 8.02.

     Section 8.02 Supplemental Indentures With Consent of Securityholders. With the
consent (evidenced as provided in Article 7) of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time Outstanding of each Series affected by
such supplemental indenture (treated as one class), the Company, when authorized by a Company Board
Resolution, and the Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as
in force at the date of execution thereof) for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the Securities of each such
Series; provided, that the following modifications and amendments will not be effective
against any Holder without such Holder’s consent: (a) a change in the stated

47

 

maturity date of any payment of principal or interest; (b) a reduction in the principal amount of, or interest on, any
Security; (c) an alteration or impairment of the right to convert at the rate or
upon the terms provided in the Indenture; (d) a change in the Currency in which any payment on
the Securities is payable; (e) an impairment of a Holder’s right to sue the Company for the
enforcement of payments due on the Securities; or (f) a reduction in the percentage of Outstanding
Securities required to consent to a modification or amendment of the Indenture or required to
consent to a waiver of compliance with certain provisions of the Indenture or certain defaults
under the Indenture.

     Upon request by the Company pursuant to a Company Order, accompanied by a copy of a Company
Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing
with the Trustee for such Series of Securities of evidence of the consent of Securityholders as
aforesaid and other documents, if any, required by Section 7.01, the Trustee for such Series of
Securities shall join with the Company in the execution of such supplemental indenture unless such
supplemental indenture affects such Trustee’s own rights, duties or immunities under this Indenture
or otherwise, in which case such Trustee may in its discretion, but shall not be obligated to,
enter into such supplemental indenture.

     It shall not be necessary for the consent of the Securityholders under this Section 8.02 to
approve the particular form of any proposed supplemental indenture, but it shall be sufficient if
such consent shall approve the substance thereof.

     Promptly after the execution by the Company and the Trustee of any supplemental indenture
pursuant to the provisions of this Section 8.02, the Company shall give notice in the manner and to
the extent provided in Section 14.04 to the Holders of Securities of each Series affected thereby
at their addresses as they shall appear on the Securities register of the Company, setting forth in
general terms the substance of such supplemental indenture. 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 supplemental indenture.

     For the purposes of this Section 8.02 only, if the Securities of any Series are issuable upon
the exercise of warrants, each holder of an unexercised and unexpired warrant with respect to such
Series shall be deemed to be a Holder of Outstanding Securities of such Series in the amount
issuable upon the exercise of such warrant. For such purposes, the ownership of any such warrant
shall be determined by the Company in a manner consistent with customary commercial practices. The
Trustee for such Series shall be entitled to rely on a Company Officers’ Certificate as to the
principal amount of Securities of such Series in respect of which consents shall have been executed
by holders of such warrants.

     Section 8.03 Effect of Supplemental Indenture. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified
and amended in accordance therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Company and the Holders of
Securities of each Series and Holders of Coupons affected thereby shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all purposes.

48

 

     Section 8.04 Documents to Be Given to Trustee. The Trustee, subject to the provisions
of Sections 6.01 and 6.02, shall receive a Company Officers’ Certificate and an Opinion of Counsel
as conclusive evidence that any supplemental indenture executed pursuant to this Article 8 complies
with the applicable provisions of this Indenture.

     Section 8.05 Notation on Securities in Respect of Supplemental Indentures. Securities
of any Series (including any Coupons appertaining thereto), authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this Article may bear, upon
the direction of the Company, a notation in form satisfactory to the Trustee for the Securities of
such Series as to any matter provided for by such supplemental indenture or as to any action taken
at any such meeting. If the Company or the Trustee shall so determine, new Securities of any
Series (including any Coupons appertaining thereto), so modified as to conform, in the opinion of
the Trustee and the Company to any modification of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Company, authenticated by the Trustee
and delivered in exchange for the Securities of such Series then Outstanding. Failure to make the
appropriate notation or issue a new Security will not affect the validity and effect of such
amendment, supplement or waiver.

ARTICLE 9

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

     Section 9.01 Company May Consolidate, etc., on Certain Terms.

          (a) Nothing contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of the Company with or into any other entity or entities (whether or not
affiliated with the Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale, conveyance or lease
of all or substantially all the property of the Company to any other entity (whether or not
affiliated with the Company) authorized to acquire and operate the same; provided, that in
any such case: (i) either the Company shall be the surviving or continuing entity or the resulting
or acquiring entity, if other than the Company, is organized and existing under the laws of a
United States jurisdiction and assumes all of the Company’s responsibilities and liabilities under
the Indenture, including the payment of all amounts due on the Securities and performance of the
covenants in the Indenture; (ii) immediately after the transaction, and giving effect to the
transaction, no Event of Default under the Indenture exists; and (iii) the Company has delivered to
the Trustee a Company Officers’ Certificate stating that the transaction and, if a supplemental
indenture is required in connection with the transaction, the supplemental indenture comply with
the Indenture and that all conditions precedent to the transaction contained in the Indenture have
been satisfied.

          (b) If the Company consolidates or merges with or into any other entity or sells or leases all
or substantially all of the Company’s assets in compliance with the terms and conditions of this
Indenture, the resulting or acquiring entity will be substituted for the Company in this Indenture
and the Securities with the same effect as if such entity had been an original party to this
Indenture and the Securities. As a result, such successor entity may exercise the Company’s rights
and powers under the Indenture and the Securities, in the Company’s name

49

 

and, except in the case of a lease, the Company will be released from all its liabilities and
obligations under the Indenture and under the Securities.

          (c) Notwithstanding the foregoing provisions, the Company may transfer all of its property and
assets to another entity if, immediately after giving effect to the transfer, such entity is a
Wholly Owned Subsidiary.

     Section 9.02 Successor Corporation Substituted. In case of any such consolidation,
merger, sale or conveyance, and following such an assumption by the successor entity, such
successor entity shall succeed to and be substituted for the Company, with the same effect as if it
had been named herein. Such successor entity may cause to be signed, and may issue either in its
own name or in the name of the Company prior to such succession any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor entity instead of the Company and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities and Coupons, if any, appertaining thereto which previously shall have
been signed and delivered by the officers of the Company to the Trustee for authentication, and any
Securities which such successor entity thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Securities and Coupons, if any, appertaining thereto so
issued shall in all respects have the same legal rank and benefit under this Indenture as the
Securities and Coupons, if any, appertaining thereto, theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities and Coupons, if any,
appertaining thereto had been issued at the date of the execution hereof.

     In case of any such consolidation, merger, sale, lease or conveyance such changes in
phraseology and form (but not in substance) may be made in the Securities and Coupons, if any,
appertaining thereto, thereafter to be issued as may be appropriate.

     In the event of any such sale or conveyance (other than a conveyance by way of lease) by the
Company or any successor entity which shall theretofore have become such in the manner described in
this Article Nine, the Company or such successor entity, as applicable, shall be discharged from
all obligations and covenants under this Indenture and the Securities and may be liquidated and
dissolved.

     Section 9.03 Opinion of Counsel to Trustee. The Trustee, subject to the provisions of
Sections 6.01 and 6.02, shall receive an Opinion of Counsel, prepared in accordance with Section
14.05, as conclusive evidence that any such consolidation, merger, sale, lease or conveyance, and
any such assumption, any such supplemental indenture, and any such liquidation or dissolution,
complies with the applicable provisions of this Indenture.

ARTICLE 10

SATISFACTION AND DISCHARGE; DEFEASANCE

     Section 10.01 Satisfaction and Discharge of Indenture. If at any time (a) the Company
shall have paid or caused to be paid the principal of and interest on all the Securities of any
Series and Coupons, if any, appertaining thereto Outstanding hereunder (other than Securities and
Coupons which have been destroyed, lost or stolen and which have been replaced or paid as

50

 

provided in Section 2.09) as and when the same shall have become due and payable, or (b) the
Company shall have delivered to the Trustee for cancellation all Securities of any Series and
Coupons, if any, appertaining thereto theretofore authenticated (other than any Securities of such
Series and Coupons which have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.09) or (c) (i) all the Securities of such Series and Coupons, if any,
appertaining thereto not theretofore delivered to the Trustee for cancellation shall have become
due and payable, or are by their terms to become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption and (ii) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee as trust funds the entire amount in the Currency required and/or the
required Government Obligations maturing as to principal and interest in such amounts and at such
times as will, in aggregate, ensure the availability of cash sufficient, in the opinion of a firm
of independent certified public accountants, to pay at maturity or upon redemption all Securities
of such Series and Coupons, if any, appertaining thereto (other than any Securities of such Series
and Coupons, if any, appertaining thereto which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.9) not theretofore delivered to the
Trustee for cancellation, including principal and interest due or to become due to such date of
maturity as the case may be, and if, in any such case, the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company with respect to Securities of such Series and
Coupons, if any, appertaining thereto, then this Indenture shall cease to be of further effect with
respect to Securities of such Series and Coupons, if any, appertaining thereto (except as to (A)
rights of registration of transfer and exchange, and the Company’s right of optional redemption,
(B) substitution of mutilated, defaced, destroyed, lost or stolen Securities and Coupons, (C)
rights of Holders to receive payments of principal thereof and interest thereon upon the original
stated due dates therefor (but not upon acceleration) and remaining rights of the Holders to
receive mandatory sinking fund payments, if any, (D) the rights, obligations and immunities of the
Trustee hereunder, and (E) the rights of the Securityholders of such Series as beneficiaries hereof
with respect to the property so deposited with the Trustee payable to all or any of them), and,
subject to Section 10.06, the Trustee, upon request by the Company pursuant to a Company Order
accompanied by a Company Officers’ Certificate and an Opinion of Counsel, shall execute proper
instruments acknowledging such satisfaction and discharge of this Indenture with respect to
Securities of such Series and Coupons, if any, appertaining thereto.

     Section 10.02 Defeasance and Covenant Defeasance.

          (a) Unless otherwise specified pursuant to Section 2.03, the Securities of any Series shall be
subject to defeasance pursuant to Section 10.02(b) or covenant defeasance pursuant to Section
10.02(c), in accordance with any applicable requirements specified pursuant to Section 2.03 and
upon compliance with the conditions set forth below in Section 10.02(d). The Company may elect, at
its option, at any time, to have Section 10.02(b) or Section 100.2(c) applied to any Securities of
any Series so subject to defeasance or covenant defeasance. Any such election shall be evidenced
by a Company Board Resolution or in another manner specified as contemplated by Section 2.03 for
such Securities.

          (b) Upon the Company’s exercise of its option, if any, to have this Section 10.02(b) applied
to any Securities of any Series, on and after the date the conditions set

51

 

forth in Section 10.02(d) are satisfied, the Company shall be deemed to have satisfied and discharged
the entire indebtedness represented by such Securities and Coupons, if any, appertaining thereto
and to have satisfied and discharged all of its other obligations under such Securities and
Coupons, if any, appertaining thereto and this Indenture, insofar as such Securities and Coupons
are concerned (“Defeasance”) .

     Subject to compliance with this Section 10.02, the Company may exercise its option, if any, to
have this Section 10.02(b) applied to any Securities notwithstanding the prior exercise of its
option, if any, to have Section 10.02(c) applied to such Securities.

     In connection with Defeasance with respect to any Securities of any Series, the irrevocable
trust agreement contemplated by Section 10.02(d) shall include, among other things, provision for
(a) payment of the principal of and interest on such Securities and Coupons, if any, appertaining
thereto when due (by redemption, sinking fund payments or otherwise), (b) the payment of the
expenses of the Trustee incurred or to be incurred in connection with carrying out such trust
provisions, (c) rights of registration, transfer, substitution and exchange of such Securities and
Coupons, if any, appertaining thereto in accordance with the terms stated in this Indenture, and
(d) continuation of the rights, obligations and immunities of the Trustee as against the Holders of
such Securities as stated in this Indenture.

     Subject to Section 10.06, the Trustee, upon request of the Company pursuant to a Company Order
accompanied by a Company Officer’s Certificate and Opinion of Counsel, shall execute proper
instruments acknowledging any satisfaction and discharge pursuant to this Section 10.02(b).

          (c) Upon the Company’s exercise of its option, if any, to have this Section 10.02(c) applied
to any Securities of any Series, on and after the date the conditions set forth in Section 10.02(d)
are satisfied (i) the Company shall be released from such of its obligations and covenants
established pursuant to Section 2.03 for the benefit of the Holders of such Securities as are
specified in the Company Board Resolutions or supplemental indenture establishing such obligations
and covenants, and (ii) the occurrence of any event contemplated by Section 5.01(c) with respect to
such of its obligations and covenants established pursuant to Section 2.03 for the benefit of the
Holders of such Securities as are specified in the Company Board Resolutions or supplemental
indenture establishing such obligations and covenants or by Section 5.01(f) to the extent specified
in the Company Board Resolutions or supplemental indenture establishing such event as an Event of
Default shall be deemed not to be or result in an Event of Default, in each case with respect to
such Securities (“Covenant Defeasance”) . Upon the effectiveness of Covenant Defeasance with
respect to any Securities of any Series, with respect to such Securities, the Company may omit to
comply with and shall have no liability in respect of any of the Company’s obligations and
covenants established pursuant to Section 2.03 for the benefit of the Holders of such Securities as
are specified in the Company Board Resolutions or supplemental indenture establishing such
obligations and covenants, whether directly or indirectly by reason of any reference elsewhere
herein to any such obligation or covenant or by reason of any reference in any such obligation or
covenant to any other provision herein or in any other document, but, except as provided in the
immediately preceding sentence, the remainder of this Indenture and such Securities of such Series
and Coupons, if any, appertaining thereto shall be unaffected thereby.

52

 

          (d) The following shall be the conditions to the application of Section 10.02(b) or Section
10.02(c) to any Securities of any Series:

          (i) The Company shall have irrevocably deposited or caused to be deposited with the
Trustee at its Corporate Trust Office or such other office as the Trustee may designate,
under the terms of an irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds in trust solely for the benefit of the Holders of Securities of such
Series and Coupons, if any, appertaining thereto, (i) immediately available funds in the
Currency required and/or (ii) the required Government Obligations maturing as to principal
and interest in such amounts and at such times as are sufficient, in the opinion of a firm
of independent certified public accountants, without consideration of any reinvestment of
such principal or interest, to pay the principal of and interest in the Currency required on
the Outstanding Securities of such Series and Coupons, if any, appertaining thereto to
maturity or redemption, as the case may be, provided that the Trustee shall have
been irrevocably instructed to apply such money or the proceeds of such Government
Obligations to the payment of said principal of and interest on the Outstanding Securities
of such Series and Coupons, if any, appertaining thereto.

          (ii) In the event of an election to have Section 10.02(b) apply to any Securities of
any Series, the Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of such Securities and Coupons, if any, appertaining thereto will
not recognize income, gain or loss for federal income tax purposes as a result of the
Defeasance to be effected with respect to such Securities and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would be the case
if such Defeasance had not occurred.

          (iii) In the event of an election to have Section 10.02(c) apply to any Securities of
any Series, the Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of such Securities and Coupons, if any, appertaining thereto will
not recognize income, gain or loss for federal income tax purposes as a result of the
Covenant Defeasance to be effected with respect to such Securities and will be subject to
federal income tax on the same amount, in the same manner and at the same times as would be
the case if such Covenant Defeasance had not occurred.

     Section 10.03 Application by Trustee of Funds Deposited for Payment of Securities.
Subject to Section 10.5, all moneys deposited with the Trustee pursuant to this Article 10 shall be
held in trust and applied by it to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), to the Holders of the particular Securities
of such Series and Coupons, if any, appertaining thereto for the payment or redemption of which
such moneys have been deposited with the Trustee, of all sums due and to become due thereon for
principal and interest; but such money need not be segregated from other funds except to the extent
required by law.

     Section 10.04 Repayment of Moneys Held by Paying Agent. In connection with the
satisfaction and discharge of this Indenture with respect to Securities of any Series or Coupons,
if

53

 

any, appertaining thereto, all moneys then held by any Paying Agent under the provisions of
this Indenture with respect to such Series of Securities or Coupons, if any, appertaining thereto,
shall, upon a Company Order, be repaid to it or paid to the Trustee and thereupon such Paying Agent
shall be released from all further liability with respect to such moneys.

     Section 10.05 Return of Unclaimed Moneys Held by Trustee and Paying Agent. Anything
in this Article 10 to the contrary notwithstanding, any moneys deposited with or paid to the
Trustee or any Paying Agent for the payment of the principal of or interest on any Security of any
Series or Coupons, if any, appertaining thereto and not applied but remaining unclaimed for two
years after the date upon which such principal or interest shall have become due and payable,
shall, upon direction by the Company pursuant to a Company Order unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the
Company by the Trustee for such Series or such Paying Agent, and the Holder of the Security of such
Series or Holders of Coupons appertaining thereto shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only to
the Company for any payment which such Holder may be entitled to collect, and all liability of the
Trustee or any Paying Agent with respect to such moneys shall thereupon cease.

     Section 10.06 Reinstatement of Obligations. If the Trustee is unable to apply any
funds or Government Obligations in accordance with this Article 10 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 or by reason of the Trustee’s inability to
convert any such funds or Government Obligations into the Currency required to be paid with respect
to any Securities of any Series and Coupons, if any, appertaining thereto, the obligations of the
Company under this Indenture and the Securities and Coupons for which such application is
prohibited, shall be revived and reinstated as if no deposit had occurred pursuant to this Article
10 until such time as the Trustee is permitted to apply all such funds or Government Obligations in
accordance with this Article 10 or is able to convert all such funds or Government Obligations;
provided, however, that, if the Company has made any payment of interest on or
principal of any of such Securities or Coupons because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities or Coupons to receive
such payment from the funds or Government Obligations held by the Trustee.

ARTICLE 11

REDEMPTION OF SECURITIES

     Section 11.01 Notice of Redemption; Partial Redemptions. Notice of redemption to the
Holders of Securities of any Series to be redeemed as a whole or in part at the option of the
Company shall be given by giving notice of such redemption as provided in Section 14.04, at least
30 days and not more than 60 days prior to the date fixed for redemption to such Holders of
Securities of such Series. Failure to give notice by mail to the Holder of any Security of a
Series designated for redemption as a whole or in part, or any defect in such notice, shall not
affect the validity of the proceedings for the redemption of any other Security of such Series.

     The notice of redemption to each such Holder shall identify the Securities to be redeemed
(including “CUSIP” or “ISIN” numbers, if any), specify the date fixed for redemption, the

54

 

redemption price, each Place of Payment, that payment will be made upon presentation and
surrender of such Securities, and that, unless otherwise specified in such notice, Coupon
Securities, if any, surrendered for payment must be accompanied by all Coupons maturing subsequent
to the redemption date, failing which the amount of any such missing Coupon or Coupons will be
deducted from the sum due for payment, that such redemption is pursuant to the mandatory or
optional sinking fund, or both, if such be the case, that interest accrued to the date fixed for
redemption will be paid as specified in such notice and that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue, the conversion rate or
price, the date on which the right to convert the Securities to be redeemed will terminate and each
place where such Securities may be surrendered for conversion, if applicable, and that, if less
than all of the Outstanding Securities of a Series are to be redeemed, the identification and
principal amount of the Securities to be redeemed. If less than all of the Securities of any
Series are to be redeemed, the notice of redemption shall specify the numbers of the Securities of
such Series to be redeemed, and, if only Unregistered Securities of any Series are to be redeemed,
and if such Unregistered Securities may be exchanged for Registered Securities, the last date on
which exchanges of Unregistered Securities for Registered Securities not subject to redemption may
be made. In case any Security of a Series is to be redeemed in part, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall state that on and
after the date fixed for redemption, upon surrender of such Security and Coupons, if any,
appertaining thereto, a new Security or Securities of such Series in principal amount equal to the
unredeemed portion thereof with appropriate Coupons will be issued.

     The notice of redemption of Securities of any Series to be redeemed at the option of the
Company shall be given by the Company or, upon direction by the Company pursuant to a Company
Order, by the Trustee in the name and at the expense of the Company. The Company shall give the
Trustee at least 45 days prior written notice of any redemption hereunder, unless a shorter period
shall be satisfactory to the Trustee.

     Not later than 9:00 a.m., New York time, on the redemption date specified in the notice of
redemption given as provided in this Section 11.01, the Company will have on deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as its own Paying Agent,
set aside, segregate and hold in trust as provided in Section 3.04) an amount of money in the
Currency in which the Securities of such Series and Coupons, if any, appertaining thereto are
payable (except as otherwise specified pursuant to Section 2.03 and except as provided in Sections
2.12(b), (e) and (f) of this Indenture) sufficient to redeem on the redemption date all the
Securities of such Series so called for redemption at the appropriate redemption price, together
with accrued interest to the date fixed for redemption. If any Security to be redeemed is
converted into Common Stock or Preferred Stock, any money deposited with the Trustee or with any
Paying Agent or so segregated and held in trust for the redemption of such Security shall (subject
to any right of the Holder of such Security or any predecessor Security to receive interest as
provided in the last paragraph of Section 2.07) be paid to the Company upon direction by the
Company pursuant to a Company Order or, if then held by the Company, shall be discharged from such
trust. If less than all the Outstanding Securities of a Series are to be redeemed, the Company
will deliver to the Trustee at least 60 days prior to the date fixed for redemption a Company
Officers’ Certificate stating the aggregate principal amount of Securities to be redeemed, unless a
shorter period shall be satisfactory to the Trustee.

55

 

     If less than all the Securities of a Series are to be redeemed, and the Securities are not
held in global form pursuant to Section 2.15, the Trustee shall select, in such manner as it shall
deem appropriate and fair, Securities of such Series to be redeemed in whole or in part.
Securities may be redeemed in part in multiples equal to the minimum authorized denomination for
Securities of such Series. The Trustee shall promptly notify the Company in writing of the
Securities of such Series selected for redemption and, in the case of any Securities of such Series
selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of
this Indenture, unless the context otherwise requires, all provisions relating to the redemption of
Securities of any Series shall relate, in the case of any Security redeemed or to be redeemed only
in part, to the portion of the principal amount of such Security which has been or is to be
redeemed. If any Security to be redeemed in part is converted in part before termination of the
conversion right with respect to the portion of the Security so selected, the converted portion of
such Security shall be deemed (so far as may be) to be the portion selected for redemption.
Securities (or portions thereof) which have been converted during a selection of Securities to be
redeemed shall be treated by the Trustee as Outstanding for the purpose of such selection. In any
case where more than one Security is registered in the same name, the Trustee in its discretion may
treat the aggregate principal amount so registered as if it were represented by one Security.

     Section 11.02 Payment of Securities Called for Redemption. If notice of redemption
has been given as above provided, the Securities or portions of Securities specified in such notice
shall become due and payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for redemption, and on and after
said date (unless the Company shall default in the payment of such Securities at the redemption
price, together with interest accrued to said date) interest on the Securities or portions of
Securities so called for redemption shall cease to accrue and, except as provided in Sections 6.05
and 10.04, such Securities shall cease from and after the date fixed for redemption to be entitled
to any benefit or security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price and unpaid interest to
the date fixed for redemption. On presentation and surrender of such Securities at a Place of
Payment specified in said notice, such Securities or the specified portions thereof shall be paid
and redeemed by the Company at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that any semiannual payment of interest
on Registered Securities becoming due on the date fixed for redemption shall be payable to the
Holders of such Securities registered as such on the relevant record date subject to the terms and
provisions of Section 2.03.

     If any Coupon Security surrendered for redemption shall not be accompanied by all appurtenant
Coupons maturing on or after the date fixed for redemption, such Security may be paid after
deducting from the redemption price an amount equal to the face amount of all such missing Coupons
or the surrender of such missing Coupon or Coupons may be waived by the Company and the Trustee, if
there be furnished to them such security or indemnity as they may require to save each of them and
any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to any Paying
Agent any missing Coupon in respect of which a deduction shall have been made from the redemption
price, such Holder shall be entitled to receive the amount so deducted; provided,
however, that, unless otherwise provided pursuant to Section 2.03, interest represented by
Coupons shall be payable only upon presentation and

56

 

surrender of those Coupons at an office or agency located outside of the United States of
America.

     If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed
for redemption at the rate of interest borne by the Security.

     Upon presentation of any Security redeemed in part only and the Coupons appertaining thereto,
the Company shall execute and the Trustee shall authenticate and deliver to or on the order of the
Holder thereof, at the expense of the Company, a new Security or Securities and the Coupons
appertaining thereto of authorized denominations, in principal amount equal to the unredeemed
portion of the Security so presented.

     Section 11.03 Exclusion of Certain Securities from Eligibility for Selection for
Redemption. Securities shall be excluded from eligibility for selection for redemption if they are
identified by registration and certificate number in a written statement signed by an authorized
officer of the Company and delivered to the Trustee at least 40 days prior to the last date on
which notice of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by, either (a) the Company or (b) an entity specifically identified in such
written statement directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company.

     Section 11.04 Repayment at the Option of the Holders. Securities of any Series which
are repayable at the option of the Holders thereof before their stated maturity shall be repaid in
accordance with the terms of the Securities of such Series. The repayment of any principal amount
of Securities pursuant to such option of the Holder to require repayment of Securities before their
stated maturity, for purposes of Section 10.01, shall not operate as a payment, redemption or
satisfaction of the indebtedness represented by such Securities unless and until the Company, at
its option, shall deliver or surrender the same to the Trustee with a directive that such
Securities be cancelled.

ARTICLE 12

HOLDERS’ MEETINGS

     Section 12.01 Purposes of Meetings. A meeting of Holders of Securities of any or all
Series may be called at any time and from time to time pursuant to the provisions of this Article
12 for any of the following purposes:

          (a) to give any notice to the Company or the Trustee for the Securities of such Series, or to
give any directions to the Trustee for such Series, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be taken by Holders
pursuant to any of the provisions of Article 5;

          (b) to remove the Trustee for such Series and nominate a successor Trustee pursuant to the
provisions of Article 6;

          (c) to consent to the execution of an indenture or indentures supplemental hereto pursuant to
the provisions of Section 8.02; and

57

 

          (d) to take any other action authorized to be taken by or on behalf of the Holders of any
specified aggregate principal amount of the Securities of any one or more or all Series, as the
case may be, under any provision of this Indenture or under applicable law.

     Section 12.02 Call of Meetings by Trustee. The Trustee for the Securities of any
Series may at any time call a meeting of Holders of Securities of such Series to take any action
specified in Section 12.01, to be held at such time and at such place in Minneapolis, Minnesota, or
such other city within the United States of America in which there is a Place of Payment as the
Trustee for such Series shall determine. Notice of every meeting of the Holders of Securities of
any Series, setting forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given to Holders of Securities of such Series in the
manner and to the extent provided in Section 14.04. Such notice shall be given not less than 20
nor more than 90 days prior to the date fixed for the meeting.

     Section 12.03 Call of Meetings by Company or Holders. In case at any time the
Company, pursuant to a Company Board Resolution or the Holders of not less than 10% in aggregate
principal amount of the Outstanding Securities of any or all Series, as the case may be, shall have
requested the Trustee for such Series to call a meeting of Holders of Securities of any or all
Series, as the case may be, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee for such Series shall not have given the
notice of such meeting within 20 days after receipt of such request, then the Company or such
Holders may determine the time and the place in Minneapolis, Minnesota, or such other city within
the United States of America in which there is a Place of Payment for such meeting and may call
such meeting to take any action authorized in Section 12.01, by giving notice thereof as provided
in Section 12.02.

     Section 12.04 Qualifications for Voting. To be entitled to vote at any meeting of
Holders, a Person shall be (a) a Holder of one or more Securities with respect to which such
meeting is being held or (b) a Person appointed by an instrument in writing as proxy by such
Holder. The only Persons who shall be entitled to be present or to speak at any meeting of Holders
shall be the Persons entitled to vote at such meeting and their counsel and any representatives of
the Trustee for the Securities of the Series with respect to which such meeting is being held and
its counsel and any representatives of the Company and its counsel.

     Section 12.05 Regulations. Notwithstanding any other provisions of this Indenture,
the Trustee for the Securities of any Series may make such reasonable regulations as it may deem
advisable for any meeting of Holders of the Securities of such Series, in regard to proof of the
holding of Securities of such Series and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters concerning the conduct
of the meeting as it shall think fit.

     The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting,
unless the meeting shall have been called by the Company or by Holders of the Securities of such
Series as provided in Section 12.03, in which case the Company or the Holders calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A

58

 

permanent chairman and a permanent secretary of the meeting shall be elected by majority vote
of the meeting.

     Subject to Section 7.04, at any meeting each Holder of Securities with respect to which such
meeting is being held or proxy therefore shall be entitled to one vote for each $1,000 (or the
equivalent in the Currency in which such Securities are denominated, as determined pursuant to
Section 14.11) principal amount (in the case of the Original Issue Discount Securities, such
principal amount to be determined as provided in Section 14.11) of Securities held or represented
by such Holder. However, no vote shall be cast or counted at any meeting in respect of any such
Security challenged as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote other than by virtue of the
Securities of such Series held by him or instruments in writing aforesaid duly designating him as
the Person to vote on behalf of other Holders of such Series. At any meeting of Holders, the
presence of Persons holding or representing Securities with respect to which such meeting is being
held in an aggregate principal amount sufficient to take action on the business for the transaction
of which such meeting was called shall constitute a quorum, but, if less than a quorum is present,
the Persons holding or representing a majority in aggregate principal amount of such Securities
represented at the meeting may adjourn such meeting with the same effect, for all intents and
purposes, as though a quorum had been present. Any meeting of Holders of Securities with respect
to which a meeting was duly called pursuant to the provisions of Section 12.02 or Section 12.03 may
be adjourned from time to time by a majority of such Holders present, whether or not constituting a
quorum, and the meeting may be held as so adjourned without further notice.

     Section 12.06 Voting. The vote upon any resolution submitted to any meeting of
Holders of Securities with respect to which such meeting is being held shall be by written ballots
on which shall be subscribed the signatures of such Holders or of their representatives by proxy
and the identifying number or numbers of the Securities held or represented by them. The chairman
of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and
there shall be attached to such record the original reports of the inspectors of votes on any vote
by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that such notice was given in the manner and
to the extent provided in Section 14.4. The record shall show the identifying numbers of the
Securities voting in favor of or against any resolution. The record shall be signed and verified
by the affidavits of the chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Company and the other to the Trustee to be preserved by the Trustee.

     Any record so signed and verified shall be conclusive evidence of the matters therein stated.

     Section 12.07 No Delay of Rights by Meeting. Nothing in this Article 12 shall be
deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or any
rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in

59

 

the exercise of any right or rights conferred upon or reserved to the Trustee or to the
Holders under any of the provisions of this Indenture or of the Securities of any Series.

ARTICLE 13

SECURITY

     If so provided pursuant to Section 2.03 with respect to the Securities of any Series, the
Securities of such Series may be secured by such property, assets or other collateral as may be
specified in or pursuant to Section 2.03. Any and all terms and provisions applicable to the
security for the Securities of such Series shall also be provided in or pursuant to Section 2.03,
which may include provisions for the execution and delivery of such security agreements, pledge
agreements, collateral agreements and other similar or related agreements as the Company may elect
and which may provide for the Trustee to act as collateral agent or in a similar or other capacity.
The Trustee shall comply with Sections 313(a)(5) and (6) and 313(b)(1) of the Trust Indenture Act
and the Company shall comply with Sections 314(b), 314(c) and 314(d) of the Trust Indenture Act, in
each case in respect of any secured Securities that may be Outstanding hereunder from time to time.

ARTICLE 14

MISCELLANEOUS PROVISIONS

     Section 14.01 Incorporators, Stockholders, Officers and Directors of Company Exempt
from Individual Liability. No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, in any Security or Coupon appertaining thereto, or because of any
indebtedness evidenced thereby, shall be had against any incorporator, as such or against any past,
present or future stockholder, officer or director, as such, of the Company or of any predecessor
or successor to the Company, either directly or through the Company or any such predecessor or
successor, under any rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities and Coupons, if any, appertaining thereto,
by the Holders thereof and as part of the consideration for the issue of the Securities; it being
expressly understood that, without limitation to the foregoing, this Indenture and the Securities
and the obligations created hereunder and thereunder are solely corporate, limited liability
company, partnership, limited partnership or entity obligations, as the case may be, of the Company
and that no such personal liability whatever shall attach to, or is or shall be incurred by, any
past, present or future stockholder, incorporator, employee, officer or director, as such, of the
Company or any of its respective predecessors or successors, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants
or agreements contained in this Indenture or in any Security or implied herefrom or therefrom and
that any and all such personal liability of every type and nature, either at common law or in
equity or by constitution or statute, of, and any and all such rights and claims against, every
such past, present or future stockholder, incorporator, employee, officer or director, as such,
because of the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any Security or implied
herefrom or therefrom, are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issuance of the Securities. As used in
this Section 14.1, all references to “stockholders” shall be deemed to mean, with respect

60

 

to any Person, any past, present or future holder or owner of an equity interest in such
Person, including owners or holders of capital stock, limited or general partnership interests and
limited liability company interests.

     Section 14.02 Provisions of Indenture for the Sole Benefit of Parties and
Securityholders. Nothing in this Indenture or in any Security or Coupon, if any, appertaining
thereto, expressed or implied, shall give or be construed to give to any Person, other than the
parties hereto, any Paying Agent and their successors hereunder and the Holders of the Securities
and Coupons, if any, appertaining thereto any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such covenants and provisions
being for the sole benefit of the parties hereto and their successors and of the Holders of the
Securities and Coupons.

     Section 14.03 Successors and Assigns of Company Bound by Indenture. All the
covenants, stipulations, promises and agreements in this Indenture by or on behalf of the Company
shall bind its successors and assigns, whether so expressed or not.

     Section 14.04 Notices and Demands on Company, Trustee and Securityholders. Any notice
or demand which by any provision of this Indenture is required or permitted to be given or served
by the Trustee, by the Holders of Securities, or by the Holders of Coupons to or on the Company may
be given or served by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Company is filed by the
Company with the Trustee) to the Company at 222 South Ninth Street, Suite 2300, Minneapolis,
Minnesota 55402, Attention: Chief Financial Officer. Any Company Order or notice by the Company,
or any notice, direction, request or demand by Securityholder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, if given or made at the Corporate
Trust Office.

     Where this Indenture provides for notice to Holders of any event, (a) if any of the Securities
affected by such event are Registered Securities, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed by first-class mail, postage prepaid
to such Registered Holders as their names and addresses appear in the Security register within the
time prescribed and (b) if any of the Securities affected by such event are Unregistered Securities
or Coupon Securities, such notice shall be sufficiently given (unless otherwise herein expressly
provided) if published once in a newspaper of general circulation in New York, New York, within the
time prescribed. Where this Indenture provides for notice in any manner, such notice may be waived
in writing by the Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver. In any case where notice to Holders is given by mail, neither
the failure to mail such notice nor any defect in any notice so mailed to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders, and any notice which is
mailed in the manner herein provided shall be conclusively presumed to have been duly given.

     In the event that the suspension of or irregularities in regular mail service makes it
impracticable to mail notice to the Company and the Securityholders when such notice is

61

 

required to be given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of
such notice.

     Section 14.05 Officers’ Certificates and Opinions of Counsel; Statements to Be
Contained Therein. Upon any application or demand by the Company to the Trustee to take any action
under any of the provisions of this Indenture, the Company shall furnish to the Trustee a Company
Officers’ Certificate or stating that all conditions precedent provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such particular application or
demand, no additional certificate or opinion need be furnished.

     Each certificate or opinion provided for in this Indenture and delivered to the Trustee with
respect to compliance with a condition or covenant provided for in this Indenture shall include (a)
a statement that the Person making such certificate or opinion has read such covenant or condition,
(b) a brief statement as to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based, (c) a statement that, in
the opinion of such Person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or condition has been
complied with, and (d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.

     Any certificate, statement or opinion of an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of or representations by counsel, unless
such officer knows that the certificate or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous. Any certificate, statement or
opinion of counsel may be based, insofar as it relates to factual matters, information with respect
to which is in the possession of the Company, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.

     Any certificate, statement or opinion of an officer of the Company or of counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of or representations by
an accountant or firm of accountants in the employ of the Company, unless such officer or counsel,
as the case may be, knows that the certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are erroneous.

     Any certificate or opinion of any independent firm of public accountants filed with the
Trustee shall contain a statement that such firm is independent.

62

 

     Section 14.06 Payments Due on Saturdays, Sundays and Holidays. If the date of
maturity of interest on or principal of the Securities of any Series or Coupons, if any,
appertaining thereto or the date fixed for redemption or repayment of any such Security or Coupon
shall not be a Business Day, then payment of interest or principal need not be made on such date,
but may be made on the next succeeding Business Day with the same force and effect as if made on
the date of maturity or the date fixed for redemption, and no interest shall accrue on amounts
payable on such date for the period from and after such date to the next succeeding Business Day.

     Section 14.07 Conflict of Any Provision of Indenture with Trust Indenture Act. If and
to the extent that any provision of this Indenture limits, qualifies or conflicts with another
provision included in this Indenture which is required to be included herein by any of Sections 310
to 317, inclusive, of the Trust Indenture Act, such required provision shall control.

     Section 14.08 New York Law to Govern. This Indenture and each Security shall be
deemed to be a contract under the laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of such State.

     Section 14.09 Counterparts. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall together constitute
but one and the same instrument.

     Section 14.10 Effect of Headings. The Article and Section headings herein and the
Table of Contents are for convenience of reference only and shall not affect the construction
hereof.

     Section 14.11 Determination of Principal Amount. In determining whether the Holders
of the requisite principal amount of Outstanding Securities of any Series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, whether a quorum is present
at a meeting of Holders of Securities or whether sufficient funds are available for redemption or
for any other purpose, the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would
be due and payable as of the date of such determination upon a declaration of acceleration of the
maturity thereof pursuant to Section 5.01 and the principal amount of any Securities denominated in
a Foreign Currency that shall be deemed to be Outstanding for such purposes shall be determined by
converting the Foreign Currency into Dollars at the Market Exchange Rate as of the date of such
determination.

     Section 14.12 Waiver. With respect to the Outstanding Securities of any Series, the
Holders of not less than a majority in aggregate principal amount of the Securities of such Series
at the time Outstanding may on behalf of the Holders of all the Securities of such Series and
Holders of all Coupons, if any, appertaining thereto: (a) waive compliance by the Company with any
restrictive provisions in this Indenture; and (b) waive any past default under this Indenture as
provided in Section 5.10.

     Section 14.13 Force Majeure. In no event shall the Trustee be responsible or liable,
nor shall the Company be responsible or liable to the Trustee, for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly or indirectly,
forces

63

 

beyond its control, including 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 or the Company, as the case may be, shall use reasonable efforts
which are consistent with accepted practices to resume performance as soon as practicable under the
circumstances.

     Section 14.14 Waiver of Jury Trial. THE COMPANY, THE TRUSTEE AND EACH HOLDER OF A
SECURITY, BY ITS ACCEPTANCE THEREOF, 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 TRANSACTIONS CONTEMPLATED HEREBY.

64

 

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

	 	 	 	 	 
	 	DOLAN MEDIA COMPANY

 	 
	 	By:  	 	 
	 
	 	 	Name:	 	 
	 
	 	 	Title: 	 	 
	 
	 
	 	TRUSTEE:

 	 
	 	By:  	 	 
	 
	 	 	Name: 	 	 
	 
	 	 	Title:Exhibit 10.1

Exhibit 10.1

[EXECUTION]

LOAN AGREEMENT

Dated as of December 14, 2009

By and Among

ASTA FUNDING ACQUISITION I, LLC; ASTA FUNDING ACQUISITION II, LLC;

PALISADES COLLECTION, L.L.C.; PALISADES ACQUISITION I, LLC; PALISADES

ACQUISITION II, LLC; PALISADES ACQUISITION IV, LLC; PALISADES

ACQUISITION V, LLC; PALISADES ACQUISITION VI, LLC; PALISADES

ACQUISITION VII, LLC; PALISADES ACQUISITION VIII, LLC; PALISADES

ACQUISITION IX, LLC; PALISADES ACQUISITION X, LLC; CLIFFS PORTFOLIO

ACQUISITION I, LLC; SYLVAN ACQUISITION I, LLC; AND OPTION CARD, LLC,

as Borrowers,

THE OTHER CREDIT PARTIES SIGNATORY HERETO

FROM TIME TO TIME,

as Credit Parties,

and

BANK LEUMI USA,

as Lender

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	1. AMOUNT AND TERMS OF CREDIT
	 	 	2	 
	1.1 Credit Facilities
	 	 	2	 
	1.2 Use of Proceeds
	 	 	3	 
	1.3 Interest
	 	 	3	 
	1.4 Receipt of Payments
	 	 	4	 
	1.5 Application and Allocation of Payments
	 	 	4	 
	1.6 Loan Account and Accounting
	 	 	5	 
	1.7 Indemnity
	 	 	5	 
	1.8 Access
	 	 	6	 
	1.9 Taxes
	 	 	7	 
	1.10 Capital Adequacy; Increased Costs; Illegality
	 	 	8	 
	1.11 Single Loan
	 	 	9	 
	1.12 Security Interest
	 	 	9	 
	1.13 No Outstanding Obligations
	 	 	9	 
	2. CONDITIONS PRECEDENT
	 	 	9	 
	2.1 Conditions to the Initial Revolving Loan
	 	 	9	 
	2.2 Further Conditions to Each Loan
	 	 	10	 
	3. REPRESENTATIONS AND WARRANTIES
	 	 	11	 
	3.1 Corporate Existence; Compliance with Law
	 	 	11	 
	3.2 Executive Offices, Collateral Locations, FEIN
	 	 	12	 
	3.3 Corporate Power, Authorization, Enforceable Obligations
	 	 	12	 
	3.4 Financial Statements and Projections
	 	 	12	 
	3.5 Reserved
	 	 	13	 
	3.6 Ownership of Property; Liens
	 	 	13	 
	3.7 Labor Matters
	 	 	13	 
	3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness
	 	 	13	 
	3.9 Government Regulation
	 	 	14	 
	3.10 Margin Regulations
	 	 	14	 
	3.11 Taxes
	 	 	14	 
	3.12 ERISA
	 	 	15	 
	3.13 No Litigation
	 	 	16	 
	3.14 Brokers
	 	 	16	 
	3.15 Intellectual Property
	 	 	16	 
	3.16 Full Disclosure
	 	 	16	 
	3.17 Environmental Matters
	 	 	17	 
	3.18 Insurance
	 	 	17	 
	3.19 Deposit and Disbursement Accounts
	 	 	18	 
	3.20 Government Contracts
	 	 	18	 
	3.21 Customer and Trade Relations
	 	 	18	 
	3.22 Reserved
	 	 	18	 
	3.23 Solvency
	 	 	18	 
	3.24 Restrictions on or Relating to Subsidiaries
	 	 	18	 
	3.25 Disaster Recovery Plan
	 	 	18	 

 

 

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	4. FINANCIAL STATEMENTS AND INFORMATION
	 	 	18	 
	4.1 Reports and Notices
	 	 	18	 
	4.2 Communication with Accountants
	 	 	19	 
	4.3 Annual Audited Statements
	 	 	19	 
	5. AFFIRMATIVE COVENANTS
	 	 	19	 
	5.1 Maintenance of Existence and Conduct of Business
	 	 	19	 
	5.2 Payment of Charges
	 	 	19	 
	5.3 Books and Records
	 	 	20	 
	5.4 Insurance; Damage to or Destruction of Collateral
	 	 	20	 
	5.5 Compliance with Laws
	 	 	21	 
	5.6 Supplemental Disclosure
	 	 	21	 
	5.7 Intellectual Property
	 	 	21	 
	5.8 Environmental Matters
	 	 	22	 
	5.9 Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
Purchases
	 	 	22	 
	5.10 ERISA
	 	 	22	 
	5.11 Servicing Agreements
	 	 	23	 
	5.12 Inactive Subsidiaries
	 	 	26	 
	5.13 Further Assurances
	 	 	26	 
	6. NEGATIVE COVENANTS
	 	 	26	 
	6.1 Mergers,
Subsidiaries, Etc.
	 	 	26	 
	6.2 Investments; Revolving Loan and Advances
	 	 	26	 
	6.3 Indebtedness
	 	 	27	 
	6.4 Employee Loans and Affiliate Transactions
	 	 	28	 
	6.5 Capital Structure and Business
	 	 	29	 
	6.6 Guaranteed Indebtedness
	 	 	30	 
	6.7 Liens; Lien Release
	 	 	30	 
	6.8 Sale of Stock and Assets
	 	 	32	 
	6.9 ERISA
	 	 	32	 
	6.10 Reserved
	 	 	33	 
	6.11 Hazardous Materials
	 	 	33	 
	6.12 Sale-Leasebacks
	 	 	33	 
	6.13 Cancellation of Indebtedness
	 	 	33	 
	6.14 Restricted Payments
	 	 	33	 
	6.15 Change of Corporate Name or Location; Change of Fiscal Year
	 	 	33	 
	6.16 No Impairment of Intercompany Transfers
	 	 	33	 
	6.17 No Speculative Transactions
	 	 	33	 
	6.18 Leases; Real Estate Purchases
	 	 	33	 
	6.19 Changes Relating to Subordinated Debt; Material Contracts
	 	 	34	 
	6.20 Credit Parties Other than Borrowers
	 	 	34	 
	6.21 Adverse Transactions
	 	 	34	 
	6.22 Disaster Recovery Plan
	 	 	34	 
	6.23 Limitation on Collection Fees
	 	 	35	 
	6.24 No Amendment to Servicing Agreements
	 	 	35	 
	7. TERM
	 	 	35	 
	7.1 Termination
	 	 	35	 

 

ii

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	7.2 Survival of Obligations Upon Termination of Financing Arrangements
	 	 	35	 
	8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
	 	 	35	 
	8.1 Events of Default
	 	 	35	 
	8.2 Remedies
	 	 	38	 
	8.3 Waivers by Credit Parties
	 	 	38	 
	9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
	 	 	39	 
	9.1 Assignment and Participations
	 	 	39	 
	10. SUCCESSORS AND ASSIGNS
	 	 	39	 
	10.1 Successors and Assigns
	 	 	40	 
	11. MISCELLANEOUS
	 	 	40	 
	11.1 Complete Agreement; Modification of Agreement
	 	 	40	 
	11.2 Fees and Expenses
	 	 	40	 
	11.3 No Waiver
	 	 	41	 
	11.4 Remedies
	 	 	41	 
	11.5 Severability
	 	 	42	 
	11.6 Conflict of Terms
	 	 	42	 
	11.7 Confidentiality
	 	 	42	 
	11.8 GOVERNING LAW
	 	 	42	 
	11.9 Notices
	 	 	43	 
	11.10 Section Titles
	 	 	44	 
	11.11 Counterparts
	 	 	44	 
	11.12 WAIVER OF JURY TRIAL
	 	 	44	 
	11.13 Press Releases and Related Matters
	 	 	44	 
	11.14 Reinstatement
	 	 	44	 
	11.15 Advice of Counsel
	 	 	45	 
	11.16 No Strict Construction
	 	 	45	 
	11.17 Lender for Service
	 	 	45	 
	12. CROSS-GUARANTY; SUBORDINATION
	 	 	45	 
	12.1 Cross-Guaranty
	 	 	45	 
	12.2 Waivers by Borrowers
	 	 	46	 
	12.3 Benefit of Guaranty
	 	 	46	 
	12.4
Subordination of Subrogation, Etc.
	 	 	46	 
	12.5 Election of Remedies
	 	 	46	 
	12.6 Limitation
	 	 	47	 
	12.7 Contribution with Respect to Guaranty Obligations
	 	 	47	 
	12.8 Liability Cumulative
	 	 	48	 
	12.9 Subordination
	 	 	48	 

 

iii

 

APPENDICES

	 	 	 	 	 
	Annex A (Recitals)

	 	—
	 	Definitions
	Annex C

	 	—
	 	Reserved
	Annex D

	 	—
	 	Reserved
	Annex E (Section 4.1(a))

	 	—
	 	Financial Statements and Projections Reporting
	Annex F (Section 4.1(b))

	 	—
	 	Collateral Reports
	Annex G (Section 6.10)

	 	—
	 	Reserved
	Annex H

	 	—
	 	Reserved
	Annex I (Section 11.10)

	 	—
	 	Notice Addresses
	Annex J (from Annex A -

Commitments definition)

	 	—
	 	Commitments as of Closing Date
	Annex L (Section 11.2(b)(ii))

	 	—
	 	Counterpart to Loan Agreement
	Schedule 1.1

	 	—
	 	Lender’s Representatives
	Schedule 1.1(c)

	 	—
	 	Ratable Shares of each Borrower

 

4

 

LOAN AGREEMENT

THIS LOAN AGREEMENT (this “Agreement”) is executed and entered into as of December
14, 2009 (and shall be effective as of the Effective Date) by and among ASTA FUNDING ACQUISITION
I, LLC, a Delaware limited liability company, ASTA FUNDING ACQUISITION II, LLC, a Delaware
limited liability company, PALISADES COLLECTION, L.L.C., a Delaware limited liability company,
PALISADES ACQUISITION I, LLC, a Delaware limited liability company, PALISADES ACQUISITION II,
LLC, a Delaware limited liability company, PALISADES ACQUISITION IV, LLC, a Delaware limited
liability company, PALISADES ACQUISITION V, LLC, a Delaware limited liability company, PALISADES
ACQUISITION VI, LLC, a Delaware limited liability company, PALISADES ACQUISITION VII, LLC, a
Delaware limited liability company, PALISADES ACQUISITION VIII, LLC, a Delaware limited
liability company, PALISADES ACQUISITION IX, LLC, a Delaware limited liability company,
PALISADES ACQUISITION X, LLC, a Delaware limited liability company, CLIFFS PORTFOLIO ACQUISITION
I, LLC, a Delaware limited liability company, SYLVAN ACQUISITION I, LLC, a Delaware limited
liability company, and OPTION CARD, LLC, a Colorado limited liability company (sometimes
collectively referred to herein as “Borrowers” and individually as a
“Borrower”); ASTA FUNDING, INC., a Delaware corporation, COMPUTER FINANCE, LLC, a
Delaware limited liability company, ASTAFUNDING.COM, LLC, a Delaware limited liability company,
ASTA COMMERCIAL, LLC, a Delaware limited liability company, VATIV RECOVERY SOLUTIONS, LLC, a
Texas limited liability company, ASTA FUNDING ACQUISITION IV, LLC, a Delaware limited liability
company, PALISADES ACQUISITION XI, LLC, a Delaware limited liability company, PALISADES
ACQUISITION XII, LLC, a Delaware limited liability company, PALISADES ACQUISITION XIII, LLC, a
Delaware limited liability company, PALISADES ACQUISITION XIV, LLC, a Delaware limited liability
company, PALISADES ACQUISITION XV, LLC, a Delaware limited liability company, PALISADES
ACQUISITION XVII, LLC, a Delaware limited liability company, PALISADES ACQUISITION XVIII, LLC, a
Delaware limited liability company, CITIZENS LENDING GROUP LLC, a Delaware limited liability
company, and VENTURA SERVICES, LLC, a Delaware limited liability company (collectively,
“Guarantor”); BANK LEUMI USA, a New York bank (hereinafter referred to as
“Lender” or “BLUSA”).

RECITALS

WHEREAS, Borrowers have requested that Lender extend a revolving credit facility to
Borrowers in the amount of Six Million Dollars ($6,000,000) in the aggregate for the purpose of
refinancing certain indebtedness of Borrowers and to provide funds for the acquisition of
Portfolios and other general corporate purposes of Borrowers; and for these purposes, Lender is
willing to make certain loans and other extensions of credit to Borrowers of up to such amount
upon the terms and conditions set forth herein; and

WHEREAS, Borrowers have agreed to secure all of their obligations under the Loan Documents
by granting to Lender a security interest in and lien upon all of their existing and
after-acquired personal and real property; and

 

 

 

WHEREAS, Guarantors are willing to guarantee all of the obligations of Borrowers to Lender
under the Loan Documents and have agreed to secure all of their obligations by granting to
Lender a security interest in and lien upon substantially all of their existing and
after-acquired personal property; and

WHEREAS, capitalized terms used in this Agreement shall have the meanings ascribed to them
in Annex A and, for purposes of this Agreement and the other Loan Documents, the rules
of construction set forth in Annex A shall govern. All Annexes and other attachments
(collectively, “Appendices”) hereto, or expressly identified to this Agreement, are
incorporated herein by reference, and taken together with this Agreement, shall constitute but a
single agreement. These Recitals shall be construed as part of the Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained, and for other good and valuable consideration, the parties hereto agree as follows:

AMOUNT AND TERMS OF CREDIT

Credit Facilities.

Revolving Credit Facility.

Subject to the terms and conditions hereof, Lender agrees to make revolving credit advances
(each, an “Advance” and collectively, the “Advances”) to Borrowers from time to
time until the Commitment Termination Date. At no time shall the aggregate outstanding Revolving
Loan exceed the Commitment. Until the Commitment Termination Date, Borrowers may borrow, repay and
reborrow under this Section 1.1(a). Each Advance shall be made on notice by Borrower
Representative on behalf of the applicable Borrower to one of the representatives of Lender
identified in Schedule 1.1 at the address specified therein. Any such notice must be given
no later than 1:00 p.m. (New York time) on the Business Day of the proposed Advance. Each such
notice (a “Notice of Borrowing”) must be given in writing (by telecopy or overnight
courier) substantially in the form of Exhibit 1.1(a)(i) attached to the Disclosure
Document, and shall include the information required in such Exhibit and such other information as
may be reasonably required by Lender.

Except as provided in Section 1.9, Borrowers shall execute and deliver to Lender a
note to evidence the Commitment. The note shall be in the principal amount of the Commitment dated
the Closing Date and substantially in the form of Exhibit 1.1(a)(ii) attached to the
Disclosure Document (a “Revolving Note”). The Revolving Note shall represent the
obligation of the Borrowers to pay the amount of the Lender’s Commitment or, if less, the aggregate
unpaid principal amount of all Advances to Borrowers together with interest thereon as prescribed
in Section 1.3. The entire unpaid balance of the aggregate Revolving Loan and all other
non-contingent Obligations shall be immediately due and payable in full in immediately available
funds on the Commitment Termination Date.

Reliance on Notices; Appointment of Borrower Representative. Lender shall be entitled
to rely upon, and shall be fully protected in relying upon, any Notice of Borrowing or similar
notice purporting to be executed by an officer of the Borrower Representative and believed by
Lender to be genuine. Lender may assume that each Person executing and

 

2

 

delivering any notice in accordance herewith who purports to be a person on the list of
authorized signatories provided from time to time by Borrower Representative to Lender was duly
authorized, unless the responsible individual acting thereon for Lender has actual knowledge to the
contrary. Each Borrower hereby designates Palisades as its representative and agent on its behalf
for the purposes of issuing Notices of Borrowing, giving instructions with respect to the
disbursement of the proceeds of the Revolving Loan, effecting repayment of the Revolving Loan,
giving and receiving all other notices and consents hereunder or under any of the other Loan
Documents and taking all other actions (including in respect of compliance with covenants) on
behalf of any Borrower or Borrowers under the Loan Documents. Borrower Representative hereby
accepts such appointment. Lender may regard any notice or other communication pursuant to any Loan
Document from Borrower Representative as a notice or communication from all Borrowers, and shall
give any notice or communication required or permitted to be given to any Borrower or Borrowers
hereunder to Borrower Representative on behalf of such Borrower or Borrowers. Each Borrower agrees
that each notice, election, representation and warranty, covenant, agreement and undertaking made
on its behalf by Borrower Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the same extent as if
the same had been made directly by such Borrower.

Notwithstanding anything contained in Section 1.3(a) or otherwise in this Agreement to
the contrary, use of Advances to finance any Portfolio purchase from Palisades Acquisition XVI, LLC
shall require the prior written consent of Lender.

Use of Proceeds. Borrowers shall utilize the proceeds of the Revolving Loan solely to repay
existing Indebtedness, for the purchase of Portfolios, and for ordinary working capital, general
corporate needs and as otherwise permitted under this Agreement, including, without limitation, the
purchase of Rejected Portfolios, subject to the terms, conditions and limitations set forth in this
Agreement.

Interest.

• Borrowers shall pay interest to Lender, in arrears on each applicable Interest Payment Date,
at the Reference Rate plus one hundred (100) basis points per annum, based on the aggregate
Advances outstanding from time to time; provided, however, at no time shall the
interest rate under this Section 1.3(a) be less than four hundred fifty (450) basis points
per annum.

If any payment on any Loan becomes due and payable on a day other than a Business Day, the
maturity thereof will be extended to the next succeeding Business Day and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate during such extension.

All computations of interest shall be made by Lender on the basis of a 360-day year, in each
case for the actual number of days ccurring in the period for which such interest and Fees are
payable. The Reference Rate is a floating rate determined for each day. Each
determination by Lender of an interest rate hereunder shall be final, binding and conclusive
on Borrowers, absent manifest error.

 

3

 

So long as an Event of Default has occurred and is continuing under Section 8.1(a),
(h) or (i) or so long as any other Default, which is not reasonably capable of
being cured, or Event of Default has occurred and is continuing and at the election of Lender
confirmed by written notice from Lender to Borrower Representative, the interest rate applicable to
the Revolving Loan shall be increased to Reference Rate plus four hundred (400) basis points per
annum (the “Default Rate”), and all outstanding Obligations shall bear interest at the
Default Rate. Interest at the Default Rate shall accrue from the initial date of such Default,
which is not reasonably capable of being cured, or Event of Default until that Default, which is
not reasonably capable of being cured, or Event of Default is cured or waived and shall be payable
upon demand.

Notwithstanding anything to the contrary set forth in this Section 1.3, if a court of
competent jurisdiction determines in a final order that the rate of interest payable hereunder
exceeds the highest rate of interest permissible under law (the “Maximum Lawful Rate”),
then so long as the Maximum Lawful Rate would be so exceeded, the rate of interest payable
hereunder shall be equal to the Maximum Lawful Rate; provided, however, that if at
any time thereafter the rate of interest payable hereunder is less than the Maximum Lawful Rate,
Borrowers shall continue to pay interest hereunder at the Maximum Lawful Rate until such time as
the total interest received by Lender, is equal to the total interest that would have been received
had the interest rate payable hereunder been (but for the operation of this paragraph) the interest
rate payable since the Closing Date as otherwise provided in this Agreement. Thereafter, interest
hereunder shall be paid at the rate(s) of interest and in the manner provided in Sections
1.3(a) through (d), unless and until the rate of interest again exceeds the Maximum
Lawful Rate, and at that time this paragraph shall again apply. In no event shall the total
interest received by Lender pursuant to the terms hereof exceed the amount that Lender could
lawfully have received had the interest due hereunder been calculated for the full term hereof at
the Maximum Lawful Rate. If the Maximum Lawful Rate is calculated pursuant to this paragraph, such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by the number
of days in the year in which such calculation is made. If, notwithstanding the provisions of this
Section 1.3(e), a court of competent jurisdiction shall finally determine that Lender has
received interest hereunder in excess of the Maximum Lawful Rate, Lender shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified in Section
1.5 and thereafter shall refund any excess to Borrowers or as a court of competent jurisdiction
may otherwise order.

Receipt of Payments. Borrowers shall make each payment under this Agreement not later than 3:00
p.m. (New York time) on the day when due in immediately available funds in Dollars to the
Collection Account. For purposes of computing interest as of any date, all payments shall be
deemed received on the Business Day on which immediately available funds therefore are received in
the Collection Account prior to 3:00 p.m. New York time. Payments received after 3:00 p.m. New
York time on any Business Day or on a day that is not a Business Day shall be deemed to have been
received on the following Business Day.

Application and Allocation of Payments.

So long as no Default, which is not reasonably capable of being cured, or Event of Default has
occurred and is continuing, (i) payments consisting of proceeds of Accounts received in the
ordinary course of business shall be applied to the Revolving Loan; and (ii) voluntary prepayments
shall be applied as determined by Borrower Representative, subject to the

 

4

 

applicable provisions of
Section 1.5(a). Subject to this Section 1.5, as to any other payment, and as to
all payments made when a Default, which is not reasonably capable of being cured, or Event of
Default has occurred and is continuing or following the Commitment Termination Date, each Borrower
hereby irrevocably waives the right to direct the application of any and all payments received from
or on behalf of such Borrower, and each Borrower hereby irrevocably agrees that Lender shall have
the continuing exclusive right to apply any and all such payments against the Obligations of
Borrowers as Lender may deem advisable notwithstanding any previous entry by Lender in the Loan
Account or any other books and records. Subject to this Section 1.5, in the absence of a
specific determination by Lender with respect thereto, payments shall be applied to amounts then
due and payable in the following order: (1) to fees Lender’s expenses reimbursable hereunder; (2)
to interest on the Revolving Loan, ratably in proportion to the interest accrued as to each
Revolving Loan; (3) to principal payments on the Revolving Loan; and (4) to all other Obligations,
including expenses of Lender to the extent reimbursable under Section 11.2.

Lender is authorized to, and at its sole election may, charge to the Revolving Loan balance on
behalf of each Borrower and cause to be paid all fees, expenses, Charges, costs (including
insurance premiums in accordance with Section 5.4(a)) and interest, owing by Borrowers
under this Agreement or any of the other Loan Documents if and to the extent Borrowers fail to pay
promptly any such amounts as and when due. At Lender’s option and to the extent permitted by law,
any charges so made shall constitute part of the Revolving Loan hereunder.

Loan Account and Accounting. Lender shall maintain loan accounts (the “Loan Account”) on
its books to record: all Advances, all payments made by Borrowers, and all other debits and credits
as provided in this Agreement with respect to the Revolving Loan or any other Obligations. All
entries in the Loan Account shall be made in accordance with Lender’s customary accounting
practices as in effect from time to time. Subject to the Borrowers’ right to object in accordance
with the terms and conditions set forth below, the balance in the Loan Account, as recorded on
Lender’s most recent printout or other written statement (which printout or statement shall be
delivered to Borrower Representative upon its reasonable request), shall, absent manifest error, be
presumptive evidence of the amounts due and owing to Lender by each Borrower; provided,
that any failure to so record or any error in so recording shall not limit or otherwise affect any
Borrower’s duty to pay the Obligations. Lender shall render to Borrower Representative a monthly
accounting of transactions with respect to the Revolving Loan setting forth the balance of the Loan
Account as to each Borrower for the immediately preceding month. Unless Borrower Representative
notifies Lender in writing of any objection to any such accounting (specifically describing the
basis for such objection), within 30 days after the date thereof, each and every such accounting
shall (absent manifest error) be deemed final, binding and conclusive on Borrowers in all respects
as to all matters reflected therein. Only those items expressly objected to in such notice shall
be deemed to be disputed by Borrowers. Notwithstanding any provision herein contained to the
contrary, Lender may elect (which election may be revoked) to dispense with the issuance of Note to
Lender and may rely on the Loan Account as evidence of the amount of Obligations from time to time
owing to it.

Indemnity. Each Credit Party that is a signatory hereto shall jointly and severally indemnify and
hold harmless the Lender and its Affiliates, and each such Person’s respective

 

5

 

officers, directors,
employees, attorneys, agents and representatives (each, an “Indemnified Person”), from and
against any and all suits, actions, proceedings, claims, damages, losses, liabilities and expenses
(including reasonable attorneys’ fees and disbursements and other costs of investigation or
defense, including those incurred upon any appeal) that may be instituted or asserted against or
incurred by any such Indemnified Person as the result of credit having been extended, suspended or
terminated under this Agreement and the other Loan Documents and the administration of such credit,
and in connection with or arising out of the transactions contemplated hereunder and thereunder and
any actions or failures to act in connection therewith, including any and all Environmental
Liabilities, and any and all reasonable legal costs and expenses arising out of or incurred in
connection with disputes between or among any parties to any of the Loan Documents (collectively,
“Indemnified Liabilities”); provided, that no such Credit Party shall be liable for
any indemnification to an Indemnified Person to the extent that any such suit, action, proceeding,
claim, damage, loss, liability or expense results from that Indemnified Person’s gross negligence
or willful misconduct (as determined in a final, non-appealable judgment by a court of competent
jurisdiction). NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON
ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER
OR THEREUNDER, EXCEPT TO THE EXTENT OF SUCH INDEMNIFIED PERSON’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.

Access. Each Credit Party that is a party hereto shall, during normal business hours, from time to
time upon three Business Days’ prior notice as frequently as the Lender reasonably determine to be
appropriate: (a) provide Lender and any of its officers, employees and agents access to its
properties, facilities, advisors and employees (including officers) of each Credit Party and to the
Collateral, (b) permit Lender, and any of its officers, employees and agents, to inspect, examine
and make extracts from any Credit Party’s books and records, and (c) permit Lender, and its
officers, employees and agents, (including third party appraisers selected by Lender) to appraise,
inspect, review, evaluate and make test verifications and counts of the Accounts, Inventory and
other Collateral of any Credit Party. Notwithstanding other provisions of this Agreement to the
contrary, Borrowers shall pay all costs and expenses incurred or paid by Lender in conducting no
more than two (2) field examinations per year; provided, however, that there shall
be no such limitation on Borrowers’ payment obligations, and Borrowers shall pay all costs and
expenses incurred by Lender in conducting any and all field examinations made by Lender, (i) after
(A) the occurrence of a Default, which is not reasonably capable of being cured, or Event of
Default or (B) the receipt by Lender of the results of a field examination which are reasonably
unsatisfactory to Lender, and (ii) in connection with Borrowers’ request to amend or modify the
Loan Documents. Notwithstanding the preceding limitation on Borrowers’ payment obligations,
nothing in this Section shall limit or impair the rights of Lender to conduct such number of field
examinations as Lender may determine. If a Default, which is not reasonably capable of being
cured, or Event of Default has occurred and is continuing, or if access is necessary to preserve or
protect the Collateral as reasonably determined by Lender, each such Credit Party shall provide
such access to Lender and to each Lender at all times and without

 

6

 

advance notice. Furthermore, so
long as any Event of Default has occurred and is continuing, Borrowers shall provide Lender with
access to their servicers. Each Credit Party shall make available to Lender and their counsel, as
quickly as is reasonably possible under the circumstances, originals or copies of all books and
records that Lender may reasonably request. Each Credit Party shall deliver any document or
instrument necessary for Lender, as it may from time to time reasonably request, to obtain records
from any service bureau or other Person that maintains records for such Credit Party, and shall
maintain duplicate records or supporting documentation on traditional or electronic media,
including, at such Credit Party’s option, computer tapes and discs owned by such Credit Party.
Lender will give Borrowers at least three Business Days’ prior notice (written or oral) of
regularly scheduled field exams. Lender and its designees shall have a reasonable right of access
to all Critical Information generated by the business operations of the Credit Parties, including
the Critical Information stored at the New Jersey and Texas physical facilities, and to the key
employee(s) of the Credit Parties who may be responsible for maintaining, storing and safeguarding
the Critical Information. Notwithstanding the foregoing, Lender will use commercially reasonable
efforts to conduct all activities described in this Section in a manner that does not interfere in
any material respect with the business operations of any Credit Party or any servicer.

Taxes.

Any and all payments by each Borrower hereunder (including any payments made pursuant to
Section 12) or under the Note shall be made, in accordance with this Section 1.9
and subject to Section 1.9(d), free and clear of and without deduction for any and all
present or future Taxes. If any Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder (including any sum payable pursuant to Section 12) or
under the Notes, (i) the sum payable shall be increased as much as shall be necessary so that after
making all required deductions (including deductions applicable to additional sums payable under
this Section 1.9) Lender receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Borrower shall make such deductions, and (iii) such Borrower
shall pay the full amount deducted to the relevant taxing or other authority in accordance with
applicable law. Promptly upon written request, but not later than 30 days after the date of any
payment of Taxes, Borrower Representative shall furnish to Lender the original or a certified copy
of a receipt evidencing payment thereof.

Subject to Section 1.9(d), each Credit Party that is a signatory hereto shall jointly
and severally indemnify and, within 15 days of demand therefor, pay Lender for the full amount of
Taxes (including any Taxes imposed by any jurisdiction on amounts payable under this Section
1.9) paid by Lender and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted.

Reserved.

Neither the Borrowers nor the Credit Parties shall be required to pay any additional amounts
to Lender pursuant to Section 1.9(a)(i), or to indemnify Lender pursuant to Section
1.9(b), in respect of United States withholding taxes to the extent imposed as a result of (i)
the Lender designating a successor lending office which has the effect of causing the Borrowers or
the Credit Parties to become obligated to make a payment pursuant to Section 1.9(a)(i) or
Section 1.9(b) in excess of its payment obligation immediately prior to such

 

7

 

designation,
or (ii) Lender being treated as a “conduit entity” within the meaning of U.S. Treasury Regulations
Section 1.881-3 or any successor provision; provided, however, that Borrowers and
the Credit Parties shall be required to pay additional amounts to Lender pursuant to Section
1.9(a)(i), or to indemnify Lender pursuant to Section 1.9(b), in respect of United
States withholding taxes if the re-designation of the Lender’s lending office was made at the
request of a Borrower or (iii) the obligation to pay any additional amounts to Lender pursuant to
Section 1.9(a)(i), or to indemnify Lender pursuant to Section 1.9(d), is with
respect to an assignee Lender that becomes an assignee Lender pursuant to Section 9.1 as a
result of an assignment made at the request of a Borrower.

Reserved.

If Lender receives a refund in respect of any Taxes as to which it has been paid additional
amounts by a Borrower pursuant to Section 1.9(a) or indemnified by a Borrower or Credit
Party pursuant to Section 1.9(b), such Agent or Lender shall promptly notify Borrower
Representative of such refund and shall, within 30 days, remit to Borrower Representative an amount
as Lender reasonably determines to be the proportion of the refunded amount as will leave it, after
such remittance, in no better or worse position than it would have been if the Taxes had not be
imposed and the corresponding additional amounts or indemnification payment not been made;
provided, that Borrower Representative, upon the request of Lender, agrees to return such
refund and any amounts which after such return, will leave Lender in no better or worse position
than it would have been had Borrower not be required to return such refund to Lender in the event
Lender is required to repay such refund.

Capital Adequacy; Increased Costs; Illegality.

If Lender shall have reasonably determined that any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital adequacy, reserve
requirements or similar requirements or compliance by Lender with any request or directive
regarding capital adequacy, reserve requirements or similar requirements (whether or not having the
force of law), in each case, adopted after the Closing Date, from any central bank or other
Governmental Authority increases or would have the effect of increasing the amount of capital,
reserves or other funds required to be maintained by Lender and thereby reducing the rate of
return on Lender’s capital as a consequence of its obligations hereunder, then Borrowers shall from
time to time upon demand by Lender pay to Lender, additional amounts sufficient to compensate
Lender for such reduction. A reasonably detailed certificate as to the amount of that reduction
and showing the basis of the computation thereof submitted by Lender to Borrower Representative and
to Lender shall, absent manifest error, be final, conclusive and binding for all purposes.

If, due to either (i) the introduction of or any change in any law or regulation (or any
change in the interpretation thereof) or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to Lender of agreeing to
make or making, funding or maintaining any Loan, then Borrowers shall from time to time, upon
demand by Lender, pay to Lender for the account of Lender additional amounts sufficient to
compensate Lender for such increased cost. A certificate as to the amount of such increased cost,
submitted to Borrower Representative and to Lender, shall be conclusive and

 

8

 

binding on Borrowers
for all purposes, absent manifest error. Lender agrees that, as promptly as practicable after it
becomes aware of any circumstances referred to in Section 1.10(a) above or in this
Section 1.10(b), which would result in any such increased cost, the Lender shall, to the
extent not inconsistent with Lender’s internal policies of general application, use reasonable
commercial efforts to minimize costs and expenses incurred by it and payable to it by Borrowers
pursuant to Section 1.10(a) and (b).

Single Loan. The Revolving Loan to each Borrower and all of the other Obligations of each Borrower
arising under this Agreement and the other Loan Documents shall constitute one general obligation
of that Borrower secured, until the Termination Date, by all of the Collateral.

Security Interest.

Security Interest. Credit Parties, as more fully set forth in the Collateral
Documents, have granted to the Lender a first priority lien on the Collateral to secure the
Obligations, subject to Permitted Encumbrances. Credit Parties acknowledge and agree that the
security interest granted to Lender pursuant to the Collateral Documents is and continues to be a
first lien upon and security interest in the Collateral.

Proceeds of Collateral. Upon the exercise of any rights and remedies by the Lender
under the Loan Documents (including, the exercise of rights and remedies with respect to the
Collateral) all proceeds of the Collateral shall be applied in the order and manner described in
Section 1.5. Lender shall provide Borrowers with a reasonably detailed list of any
expenses and costs for which Lender seek reimbursement and payment from Borrowers at the time
Lender request payment.

Benefit. The provisions of this Section 1.12 and the rights and benefits
hereof shall inure solely to the benefit of the Lender, and its respective successors and permitted
assigns
and no other Person (including the Credit Parties) shall have or be entitled to assert rights
or benefits under this Section 1.12.

No Outstanding Obligations. Provided no Obligations remain outstanding under the Revolving Loan
and the Loan Documents, upon request of Borrowers, Lender shall make available to Borrowers any
Collections, Proceeds and other funds received by Lender in connection with any Accounts for such
uses that do not violate the terms of this Agreement and, until so used, shall be deposited into
the Blocked Account or invested in Cash Equivalent Investments, which Cash Equivalent Investments
shall be pledged to Lender and perfected in a manner reasonably acceptable to Lender.

CONDITIONS PRECEDENT

Conditions to the Initial Revolving Loan. Lender shall not be obligated to make any Revolving Loan
on the Closing Date, or to take, fulfill, or perform any other action hereunder, until the
following conditions have been satisfied or provided for in a manner reasonably satisfactory to
Lender, or waived in writing by Lender:

Agreement; Loan Documents. This Agreement or counterparts hereof shall have been duly
executed by, and delivered to, Borrowers, each other Credit Party and Lender; shall have received
such documents, instruments, agreements and legal opinions as Lender shall

 

9

 

reasonably request in
connection with the transactions contemplated by this Agreement and the other Loan Documents, each
in form and substance reasonably satisfactory to Lender.

Approvals. Lender shall have received (i) satisfactory evidence that the Credit
Parties have obtained all required consents and approvals of all Persons including all requisite
Governmental Authorities, to the execution, delivery and performance of this Agreement and the
other Loan Documents and the consummation of the Related Transactions or (ii) an officer’s or
manager’s certificate in form and substance reasonably satisfactory to Lender affirming that no
such consents or approvals are required.

Payment of Fees. Borrowers shall have reimbursed Lender for all attorneys’ fees and
reasonable costs and expenses of closing presented as of the Closing Date.

Approval of the Disclosure Document. Borrowers and each of the other Credit Parties
shall have prepared, executed and delivered to Lender the Disclosure Document and Lender shall have
approved the disclosures contained therein.

Capital Structure; Other Indebtedness. The capital structure of each Credit Party and
the terms and conditions of all Indebtedness of each Credit Party shall be acceptable to Lender in
its sole discretion.

Due Diligence. Lender shall have completed its business and legal due diligence and
background checks on individuals as it deems appropriate, with results of all reasonably
satisfactory to Lender.

Servicing Agreements. The Credit Parties shall have delivered to Lender true and
complete fully-executed copies of all servicing agreements entered into by or between any Credit
Party and any Servicing Agent, other than agreements with Servicing Agent who remit Collections to
any Credit Party that, on average, total less than $6,000,000 in any Fiscal Quarter it being
acknowledged that this condition precedent shall not be effective until the date that is fourteen
(14) days after the Closing Date.

Insurance Certificates. The Credit Parties shall have delivered to Lender such
certificates of insurance as Lender shall reasonably require in form and content acceptable to
Lender evidencing the insurance coverages required by the terms of this Agreement to be maintained
by the Credit Parties, including, without limitation, “All Risk” and business interruption
insurance and general liability and other liability policies.

Consummation of Related Transactions. Lender shall have received fully executed
copies of the Related Transactions Documents, each of which shall be in form and substance
reasonably satisfactory to Lender and its counsel.

Further Conditions to Each Loan. Lender shall not be obligated to fund any Advance (including,
without limitation, the Advance to be made on the Closing Date) if, as of the date thereof:

any representation or warranty by any Credit Party contained herein or in any other Loan
Document is (subject to any materiality or other qualifiers contained in such

 

10

 

representation or
warranty) untrue or incorrect as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date and except for changes therein expressly permitted or
expressly contemplated by this Agreement (including to the extent a supplement to a disclosure
contained in the Disclosure Document is to be supplied to Lender when and as required under the
Loan Documents and Lender has determined not to make such Advance as a result of the fact that such
warranty or representation is untrue or incorrect;

any event or circumstance having a Material Adverse Effect has occurred and is continuing
since the date hereof as reasonably determined by the Lender, Lender has determined not to make
such Advance as a result of the fact that such event or circumstance has occurred;

any Default, which is not reasonably capable of being cured, or Event of Default has occurred
and is continuing or would result after giving effect to any Advance and Lender shall have
determined not to make any Advance as a result of that Default, which is not reasonably capable of
being cured, or Event of Default; or

after giving effect to any Advance, the outstanding principal amount of the aggregate
Revolving Loan would exceed the Commitment.

The request and acceptance by any Borrower of the proceeds of any Advance shall be deemed to
constitute, as of the date thereof, (i) a representation and warranty by Borrowers that the
conditions in this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrowers of
the cross-guaranty provisions set forth in Section 12 and of the granting and continuance
of Lender’s Liens, pursuant to the Collateral Documents.

REPRESENTATIONS AND WARRANTIES

To induce Lender to make the Revolving Loan, the Credit Parties executing this Agreement,
jointly and severally, make the following representations and warranties to Lender with respect
to all Credit Parties, each and all of which shall survive the execution and delivery of this
Agreement.

Corporate Existence; Compliance with Law. Each Credit Party (a) is a corporation or limited
liability company duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization set forth in the Disclosure Document; (b)
is duly qualified to conduct business and is in good standing in each other jurisdiction where its
ownership or lease of property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not reasonably be expected to result in exposure to
losses, damages or liabilities in excess of $100,000; (c) has the requisite corporate or limited
liability company power and authority and the legal right to own, pledge, mortgage or otherwise
encumber and operate its properties, to lease the property it operates under lease and to conduct
its business as now, heretofore and proposed to be conducted; (d) subject to specific
representations regarding Environmental Laws, has all material licenses, permits, consents or
approvals from or by, and has made all material filings with, and has given all material notices
to, all Governmental Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or operating agreement, as
applicable; and (f) to the best of each Credit Party’s actual knowledge, is in compliance with and
has all licenses required under all laws, including, without limitation, all

 

11

 

applicable consumer
credit and collection laws, except where the failure to be in compliance or have such licenses
could not be reasonably expected to have a Material Adverse Effect; and (g) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax and other laws, is in
compliance with all applicable provisions of law, except where the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

Executive Offices, Collateral Locations, FEIN. As of the Closing Date, the current location of
each Credit Party’s chief executive office and premises at which any Collateral is located are set
forth in the Disclosure Document, and none of such locations has changed within the 12 months
preceding the Closing Date. In addition, the Disclosure Document lists the federal employer
identification number of each Credit Party.

Corporate Power, Authorization, Enforceable Obligations. The execution, delivery and performance
by each Credit Party of the Loan Documents to which it is a party and the creation of all Liens
provided for therein: (a) are within such Person’s power; (b) have been duly authorized by all
necessary corporate or limited liability company action; (c) do not contravene any provision of
such Person’s charter, bylaws or operating agreement as applicable; (d) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority applicable to such
Person; (e) do not conflict with or result in the breach or termination of, constitute a default
under or accelerate or permit the acceleration of any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other
instrument to which such Person is a party or by which such Person or any of its property is bound;
(f) do not result in the creation or imposition of any Lien upon any of the property of such Person
other than those in favor of Lender pursuant to the Loan Documents; and (g) do not require the
consent or approval of any Governmental Authority or any other Person, except those referred to in
Section 2.1(b), all of which will have been duly obtained, made or complied with prior to
the Closing Date. Each of the Loan Documents has been duly executed and delivered by each Credit
Party that is a party thereto and each such Loan Document constitutes a legal, valid and binding
obligation of such Credit Party enforceable against it in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating or affecting creditors’ rights (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealings.

Financial Statements and Projections. All Financial Statements and projections have been prepared
in accordance with GAAP consistently applied throughout the periods covered (except as disclosed
therein and except, with respect to unaudited Financial Statements, for normal year-end audit
adjustments) and present fairly in all material respects the financial position of the Persons
covered thereby as at the dates thereof and the results of their operations and cash flows for the
periods then ended. The following Financial Statements and projections have been delivered on the
date hereof:

The unaudited balance sheet(s) as at September 30, 2009 and the related statement(s) of income
of Asta Funding and its Subsidiaries, for the Fiscal Year then ended, as prepared by Asta Funding
on behalf of the Credit Parties; and

The financial projections of Asta Funding and its Subsidiaries for the period from the date
hereof through December 31, 2011.

 

12

 

Reserved.

Ownership of Property; Liens. As of the Closing Date, the real estate (“Real Estate”)
listed in the Disclosure Document constitutes all of the real property owned, leased or subleased,
or used by any Credit Party as warehouse, storage or office space or where assets may otherwise be
located, and identifies any such real property leased from an Affiliate of any Credit Party. No
Credit Party owns any Real Estate, and all leased Real Estate of any Credit Parties is described on
the Disclosure Document. The Disclosure Document further describes any Real Estate with respect to
which any Credit Party is a lessor, sublessor or assignor as of the Closing Date. Each Credit
Party also has good and marketable title to, or valid leasehold interests in, all of its material
personal property and assets. As of the Closing Date, none of the properties and assets of any
Credit Party are subject to any Liens other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to any Credit Party that may result in any Liens (including Liens
arising under Environmental Laws) other than Permitted Encumbrances. The Disclosure Document also
describes any purchase options, rights of first refusal or other similar contractual rights
pertaining to any Real Estate. As of the Closing Date, no portion of any Credit Party’s Real
Estate has suffered any material damage by fire or other casualty loss that has not heretofore been
repaired and restored in all material respects to its pre-casualty condition or otherwise remedied.
As of the Closing Date, all material permits required to have been issued or appropriate to enable
the Real Estate to be lawfully occupied and used for all of the purposes for which it is currently
occupied and used have been lawfully issued and are in full force and effect, except where the
failure to have any permit will not have a Material Adverse Effect.

Labor Matters. As of the Closing Date (a) no strikes or other material labor disputes against any
Credit Party are pending or, to any Credit Party’s knowledge, threatened; (b) hours worked by and
payment made to employees of each Credit Party comply in all material respects with the Fair Labor
Standards Act and each other federal, state, local or foreign law applicable to such matters; (c)
all payments due from any Credit Party for employee health and welfare insurance have been paid or
accrued as a liability on the books of such Credit Party; (d) except as set forth in the Disclosure
Document, no Credit Party is a party to or bound by any collective bargaining agreement, management
agreement, consulting agreement, employment agreement, bonus, restricted stock, stock option, or
stock appreciation plan or agreement or any similar plan, agreement or arrangement (and true and
complete copies of any agreements described on the Disclosure Document have been delivered to
Lender); (e) there is no organizing activity involving any Credit Party pending or, to any Credit
Party’s knowledge, threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Credit Party’s knowledge, threatened with the
National Labor Relations Board, and no labor organization or group of employees of any Credit Party
has made a pending demand for recognition; and (g) except as set forth in the Disclosure Document,
there are no material complaints or charges against any Credit Party pending or, to the knowledge
of any Credit Party, threatened to be filed with any Governmental Authority or arbitrator based on,
arising out of, in connection with, or otherwise relating to the employment or termination of
employment by any Credit Party of any individual.

Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness. Except as set forth in
the Disclosure Document, as of the Closing Date, no Credit Party has any Subsidiaries, is engaged
in any joint venture or partnership with

 

13

 

any other Person, or is an Affiliate of any other Person.
All of the issued and outstanding Stock of each Credit Party is owned by each of the Stockholders
and in the amounts set forth in the Disclosure Document. Except as set forth in the Disclosure
Document, there are no outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell, repurchase or redeem
any of its Stock or other equity securities or any Stock or other equity securities of its
Subsidiaries. All outstanding Indebtedness and Guaranteed Indebtedness of each Credit Party as of
the Closing Date (except for the Obligations) is described in Section 6.3 (including the
Disclosure Document).

Government Regulation. No Credit Party is an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in
the Investment Company Act of 1940. No Credit Party is subject to regulation under any federal or
state statute that restricts or limits its ability to incur Indebtedness or to perform its
obligations hereunder. The making of the Revolving Loan by Lender to Borrowers, the application of
the proceeds thereof and repayment thereof and the consummation of the Related Transactions will
not violate any provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission.

Margin Regulations. No Credit Party is engaged, nor will it engage, principally or as one of its
important activities, in the business of extending credit for the purpose of “purchasing” or
“carrying” any “margin stock” as such terms are defined in Regulation U of the Federal Reserve
Board as now and from time to time hereafter in effect (such securities being referred to herein as
“Margin Stock”). No Credit Party owns any Margin Stock, and none of the proceeds of the
Revolving Loan or other extensions of credit under this Agreement will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing
or retiring any Indebtedness that was originally incurred to purchase or carry any Margin Stock or
for any other purpose that might cause any of the Revolving Loan or other extensions of credit
under this Agreement to be considered a “purpose credit” within the meaning of Regulations T, U or
X of the Federal Reserve Board. No Credit Party will take or permit to be taken any action that
might cause any Loan Document to violate any regulation of the Federal Reserve Board.

Taxes. All tax returns, reports and statements, including information returns, required by any
Governmental Authority (“Tax Returns”) to be filed by any Credit Party have been filed with
the appropriate Governmental Authority except Tax Returns relating to state and local taxes which
do not exceed $100,000 in the aggregate; but, even then, only if the failure to do so would not
result in material fines, interests, penalties or other Charges; all such Tax Returns are true,
correct and complete in all material respects; and all Charges have been paid prior to the date on
which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof (or
any such fine, penalty, interest, late charge or loss has been paid), excluding Charges or other
amounts being contested in accordance with Section 5.2(b). There are no Liens for Charges
(other than for current Charges not yet due and payable) upon the assets of any Credit Party. No
adjustment relating to such Tax Returns has been proposed formally (whether verbally or in writing)
or informally (in writing) by any Governmental Authority and, to the knowledge of each Credit
Party, no basis exists for any such adjustment. Proper and accurate amounts have been withheld by
each Credit Party from its respective employees, independent contractors, creditors, members,
partners and other third parties for all periods in compliance in all material respects with all
applicable federal, state, local and foreign laws and such withholdings have been timely

 

14

 

paid to
the respective Governmental Authorities. The Disclosure Document sets forth as of the Closing Date
those taxable years for which any Credit Party’s Tax Returns are currently being audited by the IRS
or any other applicable Governmental Authority, and any assessments or to the knowledge of any
Credit Party, any threatened assessments in connection with such audit, or otherwise currently
outstanding. Except as described in the Disclosure Document, no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or other document extending, or
having the effect of extending, the period for assessment or collection of any Charges. None of
the Credit Parties nor their respective predecessors are liable
to any Governmental Authority for any Charges: (a) under any agreement (including any tax sharing
agreements) or (b) to each Credit Party’s knowledge, as a transferee. As of the Closing Date, no
Credit Party has agreed or been requested to make any adjustment under IRC Section 481(a), by
reason of a change in accounting method or otherwise, which would have a Material Adverse Effect.

ERISA.

The Disclosure Document lists (i) all ERISA Affiliates, (ii) all material Plans and separately
identifies each such Plan as a Title IV Plan, ESOP or other Pension Plan or as a Welfare Plan,
including Retiree Welfare Plans and (iii) each Multiemployer Plan. Copies of all such listed Plans
(other than Multiemployer Plans), together with a copy of the latest IRS/DOL 5500-series form for
each such Plan, have been delivered or made available to Lender. Except as disclosed on
Schedule 3.12(a), each Qualified Plan has been determined by the IRS to qualify under
Section 401 of the IRC, the trusts created thereunder have been determined to be exempt from tax
under the provisions of Section 501 of the IRC, and nothing has occurred that would reasonably be
expected to cause the loss of such qualification or tax-exempt status. Each Plan is in material
compliance with its provisions and the applicable provisions of ERISA and the IRC, including the
timely filing of all reports required under the IRC or ERISA, including the statement required by
29 CFR Section 2520.104-23. Neither any Credit Party nor ERISA Affiliate has failed to make any
contribution or pay any amount due as required by either Section 412 of the IRC or Section 302 of
ERISA. Neither any Credit Party nor ERISA Affiliate has engaged in a “prohibited transaction,” as
defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with any Plan, that
would subject any Credit Party to a material tax on prohibited transactions imposed by Section
502(i) of ERISA or Section 4975 of the IRC.

Except as set forth in the Disclosure Document: (i) no Title IV Plan has any Unfunded Pension
Liability, no assets of any Credit Party or ERISA Affiliate are subject to any Lien under Section
412 of the IRC or Section 302 or 4068 of ERISA, and no event has occurred that could reasonably be
expected to result in the imposition of such Lien; (ii) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is reasonably expected
to occur; (iii) there are no pending, or to the knowledge of any Credit Party, threatened claims
(other than claims for benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan; (iv) no Credit Party
or ERISA Affiliate has incurred or reasonably expects to incur any liability as a result of a
complete or partial withdrawal from a Multiemployer Plan; (v) within the last five years no Title
IV Plan of any Credit Party or ERISA Affiliate has been terminated, whether or not in a “standard
termination” as that term is used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of any
Credit Party or any ERISA Affiliate (determined at any time within the last five years) with
Unfunded Pension Liabilities been transferred outside of the

 

15

 

“controlled group” (within the meaning
of Section 4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such time)
with respect to which termination or transfer a Credit Party has a material unsatisfied liability;
(vi) except in the case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes
up, in the aggregate, no more than 10% of fair market value of the assets of any Plan measured on
the basis of fair market value as of the latest valuation date of any Plan; and (vii) no liability
under any Title IV Plan has been satisfied with
the purchase of a contract from an insurance company that is not rated AAA by the Standard &
Poor’s Corporation or an equivalent rating by another nationally recognized rating agency.

No Litigation. No action, claim, lawsuit, demand, investigation or proceeding is now pending or,
to the knowledge of any Credit Party, threatened against any Credit Party, before any Governmental
Authority or before any arbitrator or panel of arbitrators (collectively, “Litigation”),
(a) that challenges any Credit Party’s right or power to enter into or perform any of its
obligations under the Loan Documents to which it is a party, or the validity or enforceability of
any Loan Document or any action taken thereunder, or (b) that would reasonably be expected to be
determined adversely to any Credit Party and that, if so determined, would reasonably be expected
to have a Material Adverse Effect. Except as set forth on the Disclosure Document, as of the
Closing Date there is no Litigation pending or, to any Credit Party’s knowledge, threatened, that
seeks damages in excess of $100,000 with respect to claims for which the applicable Credit Party
has no right of indemnification from the originator or seller of that Account, or that seeks
damages in excess of $500,000 with respect to claims for which the applicable Credit Party has a
right of indemnification from the originator or seller of that Account, or injunctive relief
against, or alleges criminal misconduct of, any Credit Party.

Brokers. No broker or finder brought about the obtaining, making or closing of the Revolving Loan
or the Related Transactions, and no Credit Party or Affiliate thereof has any obligation to any
Person in respect of any finder’s or brokerage fees in connection therewith.

Intellectual Property. As of the Closing Date, each Credit Party owns or has rights to use all
Intellectual Property necessary to continue to conduct its business as now or heretofore conducted
by it or proposed to be conducted by it. Each Trademark, Copyright and Patent registered with or
that is the subject of an application with the United States Patent and Trademark Office, or its
foreign equivalents, or the United States Copyright Office or its foreign equivalents, as
applicable, and each License is listed, together with application or registration numbers, as
applicable, in the Disclosure Document. Except as set forth in the Disclosure Document, each
Credit Party, jointly and severally, represents and warrants that all Patents, Trademarks and
Copyrights which are necessary or material to the operations of such Credit Party have been
registered with the United States Patent and Trademark Office or its foreign equivalents or the
United States Copyright Office or its foreign equivalents, as applicable. Each Credit Party
conducts its business and affairs without infringement of or interference with any Intellectual
Property of any other Person in any material respect. Except as set forth in the Disclosure
Document, no Credit Party is aware of any infringement claim by any other Person with respect to
any Intellectual Property.

Full Disclosure. No information contained in this Agreement, any of the other Loan Documents,
Financial Statements or Collateral Reports or other written reports from time to time delivered
hereunder and no written statement furnished by or on behalf of any Credit Party to Lender pursuant
to the
terms of this Agreement contains or will contain when delivered or

 

16

 

furnished any untrue statement
of a material fact or omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under which they were
made. The Liens granted to Lender pursuant to the Collateral Documents will at all times be fully
perfected first priority Liens in and to the Collateral described therein, subject, as to priority,
only to Permitted Encumbrances. The projections included in such information are or will be based
on assumptions and estimates developed by management of the Credit Parties in good faith and
considered by the preparer to be reasonable as of the date such projections are prepared and are
delivered to Lender.

Environmental Matters.

Except as set forth in the Disclosure Document, as of the Closing Date: (i) the Real Estate is
free of contamination from any Hazardous Material except for such contamination that would not
result in material Environmental Liabilities; (ii) no Credit Party has caused or suffered to occur
any Release of Hazardous Materials on, at, in, under, above, to, from or about any of its Real
Estate; (iii) the Credit Parties are and have been in compliance with all Environmental Laws,
except for such noncompliance that would not result in material Environmental Liabilities; (iv) the
Credit Parties have obtained, and are in compliance with, all Environmental Permits required by
Environmental Laws for the operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain or comply with such Environmental
Permits would not result in material Environmental Liabilities, and all such Environmental Permits
are valid, uncontested and in good standing; (v) no Credit Party is involved in operations or knows
of any facts, circumstances or conditions, including any Releases of Hazardous Materials, that are
likely to result in any material Environmental Liabilities; and no Credit Party has permitted any
current or former tenant or occupant of the Real Estate to engage in any such operations; (vi)
there is no Litigation arising under or related to any Environmental Laws, Environmental Permits or
Hazardous Material that seeks damages, penalties, fines, costs or expenses in excess of $200,000 or
injunctive relief against, or that alleges criminal misconduct by, any Credit Party; and (vii) no
notice has been received by any Credit Party identifying it as a “potentially responsible party” or
requesting information under CERCLA or analogous state statutes, and to the knowledge of the Credit
Parties, there are no facts, circumstances or conditions that may result in any Credit Party being
identified as a “potentially responsible party” under CERCLA or analogous state statutes.

The Credit Parties have provided to Lender copies of all existing environmental reports,
reviews and audits and all written information pertaining to actual or potential Environmental
Liabilities performed at the request of any Credit Party or otherwise received by any Credit Party,
in each case relating to any Credit Party.

Each Credit Party hereby acknowledges and agrees that Lender (i) is not now, and has not ever
been, in control of any of the Real Estate or any Credit Party’s affairs, and (ii) is not
authorized by the Loan Documents or otherwise to influence any Credit Party’s conduct with respect
to the ownership, operation or management of any of its Real Estate or compliance with
Environmental Laws or Environmental Permits.

Insurance. The Disclosure Document lists all insurance policies of any nature maintained, as of
the Closing Date, for current occurrences by each Credit Party, as well as a summary of the terms
of each such policy.

 

17

 

Deposit and Disbursement Accounts. The Disclosure Document lists all banks and other financial
institutions at which any Credit Party maintains deposit or other accounts as of the Closing Date,
including any Disbursement Accounts, and such Schedule correctly identifies the name, address and
telephone number of each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.

Government Contracts. Except as set forth in the Disclosure Document, as of the Closing Date, no
Credit Party is a party to any contract or agreement with any Governmental Authority and no Credit
Party’s Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C. § 3727) or any
similar state or local law.

Customer and Trade Relations. As of the Closing Date, there exists no actual or, to the knowledge
of any Credit Party, threatened termination or cancellation of, or any material adverse
modification or change in: the business relationship of any Credit Party with any customer or group
of customers whose purchases during the preceding 12 months caused them to be ranked among the ten
largest customers of such Credit Party; or the business relationship of any Credit Party with any
supplier material to its operations.

Reserved.

Solvency. Both before and after giving effect to (a) the Revolving Loan to be made or incurred on
the Closing Date or such other date as the Revolving Loan requested hereunder are made or incurred,
(b) the disbursement of the proceeds of the Revolving Loan pursuant to the instructions of Borrower
Representative; (c) the consummation of the other Related Transactions; and (d) the payment and
accrual of all transaction costs in connection with the foregoing, each Borrower is and will be
Solvent.

Restrictions on or Relating to Subsidiaries. There does not exist any encumbrance or restriction
on the ability of (a) any Borrower or any Subsidiary of any Borrower to pay dividends or make any
other distributions on its Stock or any other interest or participation in its profits owned by any
Borrower or any Subsidiary of any Borrower, or to pay any Indebtedness owed to any Borrower or any
Subsidiary of any Borrower, (b) any Borrower or any Subsidiary of any Borrower to make loans or
advances to any Borrower or any Subsidiary of any Borrower or (c) any Borrower or any Subsidiary of
any Borrower to
transfer any of its properties or assets to any Borrower or any Subsidiary of any Borrower, except
for such encumbrances or restrictions existing under or by reason of (i) applicable law, or (ii)
the Loan Documents or (iii) the operating agreement for Pal XVI.

Disaster Recovery Plan. The Borrowers represent and warrant that the Disaster Recovery Plan is
sufficient to protect the Borrowers in the event of a disaster. To the extent applicable, the
Borrowers hereby collaterally assign to the Lender all of the Borrowers’ right, title and interest
in the Disaster Recovery Plan and all agreements related thereto.

FINANCIAL STATEMENTS AND INFORMATION

Reports and Notices.

Each Credit Party executing this Agreement hereby agrees that from and after the Closing Date
and until the Termination Date, it shall deliver to Lender the Financial Statements, notices and
other information at the times, to the Persons and in the manner set forth in Annex E.

 

18

 

Each Credit Party executing this Agreement hereby agrees that, from and after the Closing Date
and until the Termination Date, it shall deliver to Lender the various Collateral Reports at the
times, to the Persons and in the manner set forth in Annex F.

Communication with Accountants. Each Credit Party executing this Agreement authorizes (a) Lender,
with consent of Borrower Representative, and (b) so long as an Event of Default has occurred and is
continuing, Lender to communicate directly with its independent certified public accountants,
including Grant Thornton, LLP, and authorizes and, at Lender’s request, shall request those
accountants to disclose and make available to Lender any and all Financial Statements and other
supporting financial documents, schedules and information relating to any Credit Party (including
copies of any issued management letters) with respect to the business, financial condition and
other affairs of any Credit Party.

Annual Audited Statements. A qualification on the audited Financial Statements of Asta Funding and
its Subsidiaries solely as a result of (a) the Commitment Termination Date scheduled to occur in
less than one year and/or (b) the failure to amend the Receivables Financing Agreement in
connection with the waiver originally provided to Pal XVI dated as of December 1, 2008, shall not
be deemed to violate the reporting requirements set forth in paragraph (b) of Annex E to
the Credit Agreement.

AFFIRMATIVE COVENANTS

Each Credit Party executing this Agreement jointly and severally agrees as to all Credit
Parties that from and after the date hereof and until the Termination Date:

Maintenance of Existence and Conduct of Business. Each Credit Party (other than Inactive Subsidiaries) shall: do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence and its rights and
franchises; continue to conduct its business substantially as now conducted or as otherwise
permitted hereunder; at all times maintain, preserve and protect all of its assets and properties
useful in the conduct of its business, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear and tear) and from time
to time make, or cause to be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices; and except as permitted by Section
6.15, transact business only in such corporate and trade names as are set forth in the
Disclosure Document.

Payment of Charges.

Subject to Section 5.2(b), each Credit Party shall pay and discharge or cause to be
paid and discharged promptly all Charges payable by it (other than Charges that it does not have
knowledge of and which do not exceed $250,000 in the aggregate), including (i) Charges imposed upon
it, its income and profits, or any of its property (real, personal or mixed) and all Charges with
respect to tax, social security and unemployment withholding with respect to its employees, (ii)
lawful claims for labor, materials, supplies and services or otherwise, and (iii) all storage or
rental charges payable to warehousemen or bailees, in each case, before any thereof shall become
past due.

Each Credit Party may in good faith contest, by appropriate proceedings, the validity or
amount of any Charges, Taxes or claims described in Section 5.2(a); provided, that
(i) adequate reserves with respect to such contest are maintained on the books of such Credit
Party,

 

19

 

in accordance with GAAP; (ii) no Lien shall be imposed to secure payment of such Charges
(other than payments to warehousemen and/or bailees) that is superior to any of the Liens securing
the Obligations and such contest is maintained and prosecuted continuously and with diligence and
operates to suspend collection or enforcement of such Charges; (iii) none of the Collateral becomes
subject to forfeiture or loss as a result of such contest; and (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all additional charges,
interest, penalties and expenses, if any, and shall deliver to Lender evidence reasonably
acceptable to Lender of such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Credit Party or the conditions set forth in this Section
5.2(b) are no longer met.

Books and Records. Each Credit Party shall keep adequate books and records with respect to its
business activities in which proper entries, reflecting all financial transactions, are made in
accordance with GAAP and on a basis consistent with the Financial Statements described in or
attached to the Disclosure Document.

Insurance; Damage to or Destruction of Collateral.

The Credit Parties shall, at their sole cost and expense, maintain the policies of insurance
described on the Disclosure Document as in effect on the date hereof or otherwise in form and
amounts and with insurers reasonably acceptable to Lender. Copies of all such policies of
insurance shall be delivered to Lender within 30 days of the Closing Date. Such policies of
insurance (or the loss payable and additional insured endorsements delivered to Lender) shall
contain provisions pursuant to which the insurer agrees to provide 30 days prior written notice to
Lender in the event of any non-renewal, cancellation or amendment of any such insurance policy. If
any Credit Party at any time or times hereafter shall fail to obtain or maintain any of the
policies of insurance required above, or to pay all premiums relating thereto, Lender may at any
time or times thereafter that such insurance is not in effect obtain and maintain such policies of
insurance and pay such premiums. Lender shall have no obligation to obtain insurance for any
Credit Party or pay any premiums therefor. By doing so, Lender shall not be deemed to have waived
any Default, which is not reasonably capable of being cured, or Event of Default arising from any
Credit Party’s failure to maintain such insurance or pay any premiums therefor. All sums so
disbursed, including reasonable attorneys’ fees, court costs and other charges related thereto,
shall be payable on demand by Borrowers to Lender and shall be additional Obligations hereunder
secured by the Collateral.

Each Credit Party shall deliver to Lender, in form and substance reasonably satisfactory to
Lender, endorsements to (i) all “All Risk” and business interruption insurance naming Lender as
loss payee, and (ii) all general liability and other liability policies naming Lender as additional
insured. Each Credit Party irrevocably makes, constitutes and appoints Lender (and all officers,
employees or agents designated by Lender), so long as any Default, which is not reasonably capable
of being cured, or Event of Default has occurred and is continuing, as such Credit Party’s true and
lawful agent and attorney-in-fact for the purpose of making, settling and adjusting claims under
such “All Risk” policies of insurance, endorsing the name of such Credit Party on any check or
other item of payment for the proceeds of such “All Risk” policies of insurance and for making all
determinations and decisions with respect to such “All Risk” policies of insurance. Borrower
Representative shall promptly notify Lender of any loss, damage, or destruction to the Collateral
in the amount of $100,000 or more, whether or not

 

20

 

covered by insurance or reimbursable under
condemnation provisions. After deducting from such proceeds the expenses, if any, incurred by
Lender in the collection or handling thereof, Lender may, at its option, either (i) apply such
insurance or condemnation proceeds to the reduction of the Obligations in accordance with
Section 1.3(d) or (ii) permit the Credit Parties to replace, restore, repair or rebuild the
property on terms acceptable to Lender in its sole discretion; provided, that in the case
of insurance or condemnation proceeds pertaining to any Credit Party that is not a Borrower, (i)
such insurance or condemnation proceeds shall be applied ratably to all of the Revolving Loan owing
by each Borrower, or (ii) permit or require the applicable Credit Party to use such money, or any
part thereof, to replace, repair, restore or rebuild the Collateral in a diligent and expeditious
manner with materials and workmanship of substantially the same quality as existed before the loss,
damage or destruction.

Compliance with Laws. Each Credit Party shall comply with all federal, state, local and foreign
laws and regulations applicable to it, including those relating to consumer credit, collection
laws, licensing requirements, ERISA and labor matters and Environmental Laws and Environmental
Permits,
except to the extent that the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. Borrowers and the other Credit Parties
shall cause any Servicing Agent and other Person (including any collection agent, agency or
attorney) involved in the collection of Accounts and other Collateral to comply with all federal,
state, local and foreign laws and regulations applicable to it, including those relating to
consumer credit, collection laws, licensing requirements, ERISA and labor matters and Environmental
Laws and Environmental Permits, except to the extent that the failure to comply, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse Effect.

Supplemental Disclosure. From time to time as may be reasonably requested by Lender (which request
will not be made more frequently than once each year absent the occurrence and continuance of a
Default, which is not reasonably capable of being cured, or an Event of Default), the Credit
Parties shall supplement each disclosure contained in the Disclosure Document, or any
representation herein or in any other Loan Document, with respect to any matter hereafter arising
that, if existing or occurring at the date of this Agreement, would have been required to be set
forth or described in the Disclosure Document or as an exception to such representation or that is
necessary to correct any information in the Disclosure Document or representation which has been
rendered inaccurate thereby (and, in the case of any supplements to the Disclosure Document, such
Disclosure Document shall be appropriately marked to show the changes made therein);
provided, that (a) no such supplement to the Disclosure Document or representation shall
amend, supplement or otherwise modify the term “Disclosure Document” as used herein or any
representation with respect thereto, or be or be deemed a waiver of any Default or Event of Default
resulting from the matters disclosed therein, except as consented to by Lender in writing, which
consent will not be unreasonably withheld or delayed, (b) no supplement shall be required or
permitted as to representations and warranties that relate solely to the Closing Date and (c) the
requirement to supplement the Disclosure Document hereto shall be subject to any materiality and
other qualifiers set forth in any representation and warranty.

Intellectual Property. Each Credit Party will continue to own or have rights to use all
Intellectual Property necessary to continue to conduct its business as now or heretofore conducted
by it or proposed to be conducted by it, and shall conduct its business and affairs

 

21

 

without
knowingly infringing or interfering with any Intellectual Property of any other Person in any
material respect.

Environmental Matters. Each Credit Party shall and shall cause each Person within its control to:
(a) conduct its operations and keep and maintain its Real Estate in compliance with all
Environmental Laws and Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all investigation, remediation,
removal and response actions that are appropriate or necessary to maintain the value and
marketability of the Real Estate or to otherwise comply with Environmental Laws and Environmental
Permits pertaining to the presence, generation, treatment, storage, use, disposal, transportation
or Release of any Hazardous Material on, at, in, under, above, to, from or about any of its Real
Estate; (c) notify Lender promptly after such Credit Party becomes aware of any violation of
Environmental
Laws or Environmental Permits or any Release on, at, in, under, above, to, from or about any Real
Estate that could reasonably be expected to result in any material Environmental Liabilities; and
(d) promptly forward to Lender a copy of any order, notice, request for information or any
communication or report received by such Credit Party in connection with any such violation or
Release or any other matter relating to any Environmental Laws or Environmental Permits that could
reasonably be expected to result in material Environmental Liabilities, in each case whether or not
the Environmental Protection Agency or any Governmental Authority has taken or threatened any
action in connection with any such violation, Release or other matter. If Lender at any time has a
reasonable basis to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising thereunder, or a
Release of Hazardous Materials on, at, in, under, above, to, from or about any of its Real Estate,
that, in each case, could reasonably be expected to have a Material Adverse Effect, then each
Credit Party shall, upon Lender’s written request (i) cause the performance of such environmental
audits including subsurface sampling of soil and groundwater, and preparation of such environmental
reports, at Borrowers’ expense, as Lender may from time to time reasonably request, which shall be
conducted by reputable environmental consulting firms reasonably acceptable to Lender and shall be
in form and substance reasonably acceptable to Lender, and (ii) permit Lender or its
representatives to have access to all Real Estate for the purpose of conducting such environmental
audits and testing as Lender deems appropriate, including subsurface sampling of soil and
groundwater. Borrowers shall reimburse Lender for the costs of such audit and tests and the same
will constitute a part of the Obligations secured hereunder.

RESERVED.

ERISA. With respect to each Plan, each Credit Party shall comply in all material respects with the
applicable provisions of ERISA and the IRC, except to the extent such failure to comply,
individually or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect. The Credit Parties shall furnish to the Lender written notice within 30 Business Days
after any Credit Party knows or has reason to know of: (a) a plan amendment that materially
increases the benefits of any existing Plan, the establishment of any new Plan providing material
additional benefits, or the commencement of material contributions to any Multiemployer Plan; or
(b) an ERISA Event or any event, whether an ERISA Event or not, that could reasonably be expected
to result in the imposition of a Lien against a Credit Party or an ERISA Affiliate under Code
Section 412 or ERISA Section 302 or 4068, together with a statement of an officer setting forth the
details of such Event and action which the Credit Parties

 

22

 

propose to take with respect thereto.
Upon Lender’s written request, each Credit Party shall furnish to the Lender, within 30 Business
Days after the filing thereof with the Department of Labor, IRS or PBGC, copies of each annual
report (From 5500 series) filed for each Plan and the most recent actuarial report for each Title
IV Plan.

Servicing Agreements. Borrowers and the other Credit Parties shall make commercially reasonable efforts to comply with
the following obligations within 60 days after the date of this Agreement. Except for efforts to
comply with the following requirements Borrowers and Credit Parties shall make no material changes
to the instructions and payment arrangement that are currently in place with their Servicing Agent
or other Persons (including any collection agent, agency or attorney, but excluding account debtors
of Consumer Loans) having responsibility for Payments or Collections of Accounts and other
Collateral.

Borrowers and the other Credit Parties shall deliver irrevocable written instructions (the
“Written Instructions”) to any and all Servicing Agent or other Persons (including any
collection agent, agency or attorney, but excluding account debtors of Consumer Loans) having
responsibility for Payments or Collections of Accounts and other Collateral and who transfer, send,
make payments or disburse any Payments, Collections or Proceeds or other funds, sums or amounts
(which Payments, Collections, Proceeds, other funds, sums and amounts will be net of any collection
costs and other fees permitted to be deducted by the express terms of the servicing agreement that
corresponds to such Payments, Collections, Proceeds and other funds) to any Credit Party by wire
transfer of cash credit (whether on a regular or infrequent basis) to make all payments owing to
Credit Parties by wire transfer of cash credit directly into a Blocked Account established and
maintained by a Credit Party with Lender. A copy of the Written Instructions shall be delivered to
Lender within a reasonable period of time after such Written Instructions are given. Borrowers and
the other Credit Parties shall provide such Servicing Agent and other Persons with information
relative to such Blocked Account as is sufficient to permit such Servicing Agent and other Persons
to comply with the Written Instructions. None of the Credit Parties shall amend, modify or
terminate any of the Written Instructions without the prior written consent of Lender.

Each Borrower shall and shall cause its Affiliates, officers, employees, agents (other than
third party Servicing Agent), directors or other Persons acting for or in concert with such
Borrower (each a “Related Person”) to (i) hold in trust for Lender all checks, cash and
other items of payment received by such Borrower or any such Related Person, and (ii) within 2
Business Days after receipt by such Borrower or any such Related Person (or in the event such
deposit is not practicable due to an Act of God, terrorism or other city-wide catastrophe, the next
day on which businesses generally are open) of any checks, cash or other items of payment, deposit
the same into a Blocked Account of such Borrower or other blocked account with a Blocked Account
Third-Party Bank. Each Borrower and each Related Person thereof acknowledges and agrees that all
cash, checks or other items of payment constituting proceeds of Collateral are part of the
Collateral. All proceeds of the sale or other disposition of any Collateral, shall be deposited
directly into the applicable Blocked Accounts or other blocked account with a Blocked Account
Third-Party Bank.

Any and all servicing agreements entered into from and after the Closing Date (and any
modification of any servicing agreement in effect as of the Closing Date) for the administration
and/or collection of Payments made by an Account Debtor with respect to

 

23

 

Accounts and other
Collateral (a “New Servicing Agreement”), shall require the Servicing Agent and other
Persons (including any collection agent, agency or attorney) to pay Collections (net of any
collection costs and other fees permitted to be deducted from Collections by the express terms of
the corresponding New Servicing Agreement) to the Credit Parties (or their designees)
no later than 15 days after the last day of each calendar month. Contemporaneously with the
execution and delivery of any New Servicing Agreement, the applicable Credit Party shall deliver to
the Servicing Agent under such New Servicing Agreement Written Instructions directed to the
Servicing Agent duly acknowledged by the Servicing Agent. Within a reasonable period of time of
entering into a new Servicing Agreement, the Credit Party shall deliver to Lender a copy of the
Written Instructions duly executed by the corresponding Servicing Agent.

Borrowers and the other Credit Parties shall cause any Servicing Agent and other Person
(including any collection agent, agency or attorney) involved in the collection of Accounts and
other Collateral and/or the receipt of any Payments or Collections as of the Closing Date whose
Collections (net of any collection costs and other fees permitted to be deducted from Collections
by the express terms of the corresponding servicing agreement) in the aggregate for all Credit
Parties during the past Fiscal Quarter meet or exceed the Servicing Threshold to deposit, transfer,
and disburse all Payments, Collections and other sums and amounts directly into a Blocked Account
established and maintained by a Credit Party with Lender promptly after receipt thereof by
Servicing Agent or other Person, but in no event later than the date that is fifteen (15) calendar
days after receipt thereof.

Without limiting any provision, agreement, appointment or power of attorney granted in any of
the Collateral Documents, the Credit Parties hereby irrevocably constitutes and appoints Lender
with full power of substitution, as Credit Parties’ true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Credit Parties and in the name of Credit
Parties or in its own name, from time to time in Lender’s discretion, to take any and all
appropriate action and to execute and deliver any and all documents and instruments which may be
necessary or desirable to notify and instruct all Servicing Agent and other Persons (including any
collection agent, agency or attorney) involved in the collections of Accounts and other Collateral
and/or the receipt of any Payments or Collections to deposit, transfer, and disburse all Payments,
Collections and other sums and amounts directly into an account established and maintained by
Lender promptly after receipt thereof by Servicing Agent or other Person, but in no event later
than the date that is fifteen (15) calendar days after receipt thereof. Lender agrees to exercise
such power-of-attorney only upon the occurrence and during the continuance of a Default which is
not reasonably capable of being cured, or an Event of Default. Lender shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing power-of-attorney.

Borrowers and the other Credit Parties shall deliver to Lender true and correct fully-executed
copies of any servicing agreement or agreements by or between any Credit Party and any Servicing
Agent, pursuant to which such Servicing Agent is responsible for or involved in the collections of
Accounts and other Collateral and/or the receipt of any Payments or Collections (net of any
collection costs and other fees permitted to be deducted from Collections by the express terms of
the corresponding servicing agreement) in the aggregate for all Credit Parties during any Fiscal
Quarter that meet or exceed the Servicing Threshold. At Lender’s request, upon the occurrence of a
Default, which is not reasonably capable of being cured, or an

 

24

 

Event of Default, the applicable
Credit Party shall give irrevocable written instructions to such Servicing Agent to make all
payments owing to the Credit Party under the servicing agreement directly to Lender upon receipt of
written demand to do so, and shall assign to Lender, as collateral, all of such Credit Party’s
right, title and interest in and to such servicing agreements.

Within 30 days of any acquisition of any Portfolio having a purchase price greater than
$1,000,000 by any Credit Party, such acquiring Credit Party shall provide Lender with evidence
(including a bill of sale or assignment, if any) of such Credit Party’s acquisition and ownership
of such Portfolio, free and clear of all Liens, except Permitted Encumbrances. At any time (and
from time to time) from and after the Closing Date, any Credit Party owning any Portfolio having a
purchase price greater than $1,000,000 shall, upon request of Lender, provide Lender with evidence
of such Credit Party’s acquisition and ownership of such Portfolio, free and clear of all Liens,
except Permitted Encumbrances.

Borrowers shall notify Lender in writing promptly after any Servicing Agent or other Person
(including any collection agent, agency or attorney) under any servicing agreement with any Credit
Party, including, without limitation, the Servicing Agent under the Unifund Master Servicing
Agreement, is entitled (or claims to be entitled) to receive payment, fees, premiums or other
compensation (however characterized) in excess of 51% of the Collections obtained by such Servicing
Agent or other Person relating to any Portfolio under any servicing agreement.

In the event a deposit account control agreement or other similar document is entered into by
a Servicing Agent for the benefit of any Credit Party with respect to any deposit account into
which any Payments, Collections or other Collateral will be deposited, the applicable Credit Party
shall cause Lender to be added (as co-beneficiary with such Credit Party) to such deposit account
control agreement or other similar document in a manner reasonably acceptable to Lender. In the
event the applicable Credit Party is unable to add Lender as a co-beneficiary, after using such
Credit Party’s best efforts to do so, the applicable Credit Party shall make arrangements to
protect and preserve Lender’s Liens and security interests in the Collateral, including, without
limitation, such Credit Party’s right, title and interest under such deposit account control
agreement in a manner reasonably acceptable to Lender.

With respect to each set of Written Instructions given to a Servicing Agent whose Collections
(net of any collection costs and other fees permitted to be deducted from Collections by the
express terms of the servicing agreement that corresponds to such Servicing Agent) in the aggregate
for all Credit Parties during any Fiscal Quarter meet or exceed the Servicing Threshold, the Credit
Parties shall use best efforts (including, without limitation, commencement of appropriate legal
action) to enforce the terms of such Written Instructions, including, without limitation, such
Servicing Agent’s duties to make all payments owing to Credit Parties by wire transfer of cash
credit directly into a Blocked Account established and maintained by a Credit Party with Lender and
to deposit, transfer, and disburse all Payments, Collections (net of any collection costs and other
fees permitted to be deducted from Collections by the express terms of the corresponding servicing
agreement) and other sums and amounts directly into a Blocked Account established and maintained by
a Credit Party with Lender promptly after receipt thereof by Servicing Agent.

 

25

 

The Credit Parties shall, on a Fiscal Quarter basis, notify Lender in writing of any changes
to the information contained on the Disclosure Document that identifies the Servicing Agent
involved in the collection of any Payments, Accounts and Portfolios.

Inactive Subsidiaries. None of the Inactive Subsidiaries will perform or conduct or attempt to perform or conduct any
business activities whatsoever, other than the collection or liquidation of currently owned assets,
the proceeds of which such Inactive Subsidiary shall promptly deliver to Lender.

Further Assurances. Each Credit Party executing this Agreement agrees that it shall and shall
cause each other Credit Party to, at such Credit Party’s expense and upon request of Lender, duly
execute and deliver, or cause to be duly executed and delivered, to Lender such further instruments
and do and cause to be done such further acts as may be necessary or proper in the reasonable
opinion of Lender to carry out more effectively the provisions and purposes of this Agreement or
any other Loan Document.

NEGATIVE COVENANTS

Each Credit Party executing this Agreement jointly and severally agrees as to all Credit
Parties that from and after the date hereof until the Termination Date:

Mergers, Subsidiaries, Etc. No Credit Party shall directly or indirectly, by operation of law or
otherwise, (a) form or acquire any Subsidiary, except that the Borrowers may form Non-Credit Party
Affiliates, and Palisades and Asta Funding may form Subsidiaries that will become Credit Parties,
and Palisades and Asta Funding may form Subsidiaries for acquisitions or investments made to the
extent permitted by this Section 6, or (b) merge with, consolidate with, acquire all or
substantially all of the assets or Stock of, or otherwise combine with or acquire, any Person, or
all or substantially all of the assets constituting the business of a division, branch or other
unit of operation of any Person, except that (i) any Borrower may merge with another Borrower,
provided, that prior written notice of such merger shall be given to Lender and
provided, further, that Borrower Representative shall be the survivor of any such
merger to which it is a party, (ii) and any Inactive Subsidiary may merge into a Credit Party,
provided, that such Credit Party shall be the survivor of any such merger, (iii) any
Borrower may acquire all or substantially all of the assets of another Credit Party, and (iv) any
Borrower may form a wholly-owned Subsidiary to effectuate a change in its capital structure as
permitted under and in accordance with Section 6.5.

Investments; Revolving Loan and Advances. Except as otherwise expressly permitted by this
Section 6, no Credit Party shall make or permit to exist any investment in, or make, accrue
or permit to exist loans or advances of money to, any Person, through the direct or indirect
lending of money, holding of securities or otherwise, except that: (a) Borrowers may hold
investments comprised of notes payable or other evidences of indebtedness, (b) in addition to
intercompany loans and advances permitted under Section 6.3, Borrowers may make investments
in Non-Credit Party Affiliates that are otherwise permitted hereunder, (c) sales of Accounts on
deferred payment terms in the ordinary course of business that could not reasonably be expected to
have a Material Adverse Effect and, to the extent applicable, in compliance with Section
6.8 hereof, (d) investments in consumer financial services companies of up to $500,000 each
(but in no event more than $2,000,000 in the aggregate for all Credit Parties during the term of
the Revolving Loan), (e) $500,000 in the aggregate at any time outstanding for all Credit Parties

 

26

 

during the term of the Revolving Loan of other loans or credits,
(f) investments in, or acquisitions of, consumer financial services companies funded by stock of
ASTA Funding in accordance with the terms and provisions of Section 6.5 hereof, (g)
investments of proceeds from the issuance or sale of stock, warrants or other securities pursuant
to Section 6.5 in Cash Equivalent Investments and pledged to Lender as additional
Collateral until used in accordance with Section 6.5, which pledge shall be perfected in a
manner reasonably acceptable to Lender.

Indebtedness.

No Credit Party shall create, incur, assume or permit to exist any Indebtedness (including
Subordinated Debt), except (without duplication) (i) Indebtedness secured by purchase money
security interests and Capital Leases permitted in Section 6.7(a), (ii) the Revolving Loan
and the other Obligations, (iii) unfunded pension fund and other employee benefit plan obligations
and liabilities to the extent they are permitted to remain unfunded under applicable law, (iv)
existing Indebtedness described in the Disclosure Document and refinancings thereof or amendments
or modifications thereto that do not have the effect of increasing the principal amount thereof or
changing the amortization thereof (other than to extend the same) and that are otherwise on terms
and conditions no less favorable to any Credit Party, Lender, as determined by Lender, than the
terms of the Indebtedness being refinanced, amended or modified, (v) Indebtedness specifically
permitted under Sections 6.6 and 6.17; (vi) Indebtedness consisting of intercompany
loans and advances made by any Credit Party to any other Credit Party; provided, that: (A)
each Credit Party shall have executed and delivered to each other Credit Party, on the Closing
Date, a demand note (collectively, the “Intercompany Notes”) to evidence any such
intercompany Indebtedness owing at any time by such Credit Party to such other Credit Party, which
Intercompany Notes shall be in form and substance reasonably satisfactory to Lender and shall be
pledged to Lender and the originals of which shall be delivered to Lender pursuant to the
applicable Pledge Agreement or Security Agreement as additional collateral security for the
Obligations; (B) each Credit Party shall record all intercompany transactions on its books and
records in accordance with past practice; (C) the obligations of each Credit Party under any such
Intercompany Notes shall be subordinated to the Obligations of such Credit Party hereunder as set
forth in Section 12.9 of this Agreement; (D) at the time any such intercompany loan or
advance is made by any Credit Party to any other Credit Party and after giving effect thereto, each
such Credit Party shall be Solvent; and (E) no Default, which is not reasonably capable of being
cured, or Event of Default would occur and be continuing after giving effect to any such proposed
intercompany loan; (vii) interest rate cap, swap or collar agreements, or similar agreements or
arrangements to provide protection against fluctuations in interest rates or foreign currencies, on
terms and in form reasonably acceptable to Lender; (viii) the obligations of each Credit Party for
the deferred portion of the purchase price of a Portfolio; (ix) Subordinated Debt,
provided, that (A) no Default, which is not reasonably capable of being cured, or Event of
Default would occur and be continuing after giving effect to any such proposed Subordinated Debt,
and (B) the Credit Parties shall have obtained the prior written consent of Lender with respect to
such Subordinated Debt, which consent shall not be unreasonably withheld or delayed; (i) Permitted
Convertible Debt, provided, that (A) no Default, which is not reasonably capable of being
cured, or Event of Default would occur and be continuing after giving effect to any such proposed
Permitted Convertible Debt, (B) the Credit Parties shall have obtained the prior written consent of
Lender with respect to such Permitted
Convertible Debt, which consent shall not be unreasonably withheld or delayed, and (C) the
proceeds from the issuance of such Permitted Convertible Debt shall be applied to reduce the

 

27

 

Revolving Loan; and (xi) an amount not to exceed $1,000,000 in the aggregate at any time
outstanding for all Credit Parties during the term of the Revolving Loan in unsecured Indebtedness
owing to non-Affiliates.

No Credit Party shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay
any principal of, premium, if any, interest or other amount payable in respect of any material
Indebtedness or in respect of any Indebtedness, the result of which could reasonably be expected to
have a Material Adverse Effect, other than (i) the Obligations; (ii) Indebtedness secured by a
Permitted Encumbrance if the asset securing such Indebtedness has been sold or otherwise disposed
of in accordance with Sections 6.8(b) or (c); (iii) Indebtedness permitted by
Section 6.3(a)(iv) upon any refinancing thereof in accordance with Section
6.3(a)(iv); and (iv) as otherwise permitted in Section 6.14.

Employee Loans and Affiliate Transactions.

Except as otherwise expressly permitted in this Section 6 with respect to Affiliates,
no Credit Party shall enter into or be a party to any transaction with any other Credit Party or
any Affiliate thereof except in the ordinary course of and pursuant to the reasonable requirements
of such Credit Party’s business and upon fair and reasonable terms that are no less favorable to
such Credit Party than would be obtained in a comparable arm’s length transaction with a Person not
an Affiliate of such Credit Party; provided, that no Credit Party shall transfer a
Portfolio to a Non-Credit Party Affiliate without Lender’s prior written consent. In addition, if
any such transaction or series of related transactions (other than the transactions permitted under
Section 6.4(b) below) involves payments in excess of $250,000 in the aggregate, the terms
of these transactions must be disclosed in advance to Lender. All such transactions existing as of
the date hereof are described in the Disclosure Document.

In the event any Advance relates to a Portfolio to be acquired by an Affiliate prior to Lender
making such Advance, such Affiliate shall execute and deliver Lender’s form of joinder agreement
relative to this Agreement and the Collateral Documents, Affiliate Guaranty, Affiliate Security
Agreement, Affiliate Confirmation, UCC-1 Financing Statements and all such other documents as
Lender shall reasonably request, pursuant to which such Affiliate shall become a Credit Party
hereunder, including, evidence of the good standing of such Affiliate and UCC Searches, all in form
acceptable to Lender. Notwithstanding the foregoing, no Affiliate which is less than 100% directly
or indirectly wholly-owned by Asta or which is organized outside of the laws of the United States
or any State therein shall be required to join this Agreement.

No Credit Party shall enter into any lending or borrowing transaction with any employees or
consultants of any Credit Party, except loans to its respective employees and consultants in the
ordinary course of business up to a maximum, in the aggregate for all employees and consultants, at
any one time of $100,000.

Notwithstanding anything in this Agreement to the contrary, from time to time, one or more of
the Credit Parties (and Non-Credit Party Affiliates) shall be entitled, in their sole discretion,
to make capital contributions from time to time to other Credit Parties and Non-Credit Party
Affiliates for ultimate contribution to Pal XVI for the purpose of funding costs, expenses and
liabilities incurred by Pal XVI relating to litigation and similar proceedings on the collection

 

28

 

and/or sale of the receivable assets owned by Pal XVI (the amount of such contributions,
“Capital Contribution Amounts”); provided, that at no time shall the Capital
Contribution Amounts outstanding exceed $500,000.

Capital Structure and Business.

No Credit Party shall (a) make any changes in any of its business objectives, purposes or
operations that could reasonably be expected to materially adversely affect the repayment of the
Revolving Loan or any of the other Obligations or could reasonably be expected to have or result in
a Material Adverse Effect, (b) make any change in its capital structure as described in the
Disclosure Document, including the issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms of its outstanding Stock.

Notwithstanding the foregoing, and provided that no Default, which is not reasonably capable
of being cured, or Event of Default has occurred and is continuing, a Credit Party may, upon prior
written notice thereof to Lender, issue or sell shares of Stock of such Credit Party, warrants or
other securities convertible into Stock of such Credit Party, provided, that the proceeds
from the issuance or sale of such Stock, warrants or other securities shall be applied to reduce
the Revolving Loan or used by such Credit Party only for the following additional purposes and
subject to the following additional requirements and conditions: (x) the proceeds from the issuance
or sale of such Stock, warrants or other securities may be used by such Credit Party to acquire New
Portfolios or Rejected Portfolios as to which the Lender has a first priority, perfected Lien on
the Accounts comprising such acquired New Portfolio or Rejected Portfolio, as the case may be,
subject only to Permitted Encumbrances; or (y) the proceeds from the issuance or sale of such
Stock, warrants or other securities may be used by such Credit Party (subject to the further
limitations and prohibitions set forth in Section 6.1 hereof) to acquire the assets of one
or more existing consumer financial services businesses so long as: (i) no more than $2,000,000,
taken as a whole, in the aggregate for all Credit Parties for all issuances or sales of Stock,
warrants or other securities during the term of the Revolving Loan is used to acquire the assets of
existing consumer financial services businesses, and (ii) no more than forty percent (40%) of the
proceeds from all issuances or sales of Stock, warrants or other securities, taken as a whole, in
the aggregate for all Credit Parties during the term of the Revolving Loan is used to acquire the
assets of existing consumer financial services businesses, and (iii) such acquisitions are limited
solely to the assets of one or more existing consumer financial services businesses and no Credit
Party acquires any Stock of any Person, and (iv) Borrowers shall have notified Lender in writing in
each instance of any such acquisition on the earlier of: (aa) three (3) days of the date on which
any Credit Party executes any agreement, pursuant to which such Credit Party agrees to such
acquisition, and (bb) fifteen (15) calendar days prior to such acquisition, and (v) prior to such
Credit Party’s acquisition of the assets of any
such business, Borrowers shall have provided Lender with a written statement to Lender
(certified to be true, correct and complete in all respects by Borrower Representative’s Chief
Financial Officer or President) that no Default or Event of Default has occurred under the
Revolving Loan or any of the Loan Documents and that no Default or Event of Default is anticipated,
projected or contemplated to occur as a result of such Credit Party’s acquisition of the assets of
any such business. Until the proceeds from the issuance or sale of stock, warrants or other
securities pursuant to this Section 6.5 are used in accordance with this Section
6.5, the

 

29

 

applicable Credit Party may invest such proceeds in Cash Equivalent Investments which
are pledged to Lender as additional Collateral and perfected in a manner reasonably acceptable to
Lender.

Notwithstanding anything set forth herein to the contrary, a Credit Party may change its
capital structure from a corporation to a limited liability company or from a limited liability
company to a corporation provided that (i) Lender shall have consented to such transaction, (ii)
the Credit Parties have executed any documentation and taken any steps reasonably requested by
Lender, including, any documentation required by Lender to ensure Lender has a first priority lien
on the Stock and assets of such Credit Party after giving effect to any such change and (iii)
Lender shall have on or prior to such change received consolidated and consolidating income
statements, statements of cash flows and balance sheets of the Borrowers which shall provide all
required information both before and after giving effect to such change and otherwise in form and
substance satisfactory to Lender to ensure that such change does not affect any of the obligations
of the Credit Parties under any Loan Document or any rights of Lender with respect to the Credit
Parties. No Credit Party shall engage in any business other than the businesses currently engaged
in by it or businesses reasonably related thereto.

Guaranteed Indebtedness. No Credit Party shall create, incur, assume or permit to exist any
Guaranteed Indebtedness except (a) by endorsement of instruments or items of payment for deposit to
the general account of any Credit Party, (b) for Guaranteed Indebtedness incurred for the benefit
of any other Credit Party if the primary obligation is expressly permitted by this Agreement,
(c) the obligations of the Credit Parties pursuant to a guaranty in favor of BMO Capital Markets
Corp. pursuant to which the Credit Parties guaranty up to $8,000,000 of the obligations of Pal XVI
set forth in and evidenced by that certain Receivables Financing Agreement dated as of March 2,
2007 (the “Receivables Financing Agreement”) by and among Pal XVI, as borrower, Palisades
Collection L.L.C., as servicer, Fairway Finance Company, LLC, as lender, BMO Capital Markets Corp.,
as administrative and collateral agent, and Bank of Montreal, as liquidity agent for the liquidity
providers, provided, that such obligations are at all times subordinate to payment of the
Obligations of the Credit Parties to the Lender pursuant to an intercreditor agreement (and any
other applicable documents, from time to time) satisfactory, in form and substance, to the Lender,
(d) the obligations of the Credit Parties pursuant to the Group Promissory Note, the Group
Indemnification Agreement and the guaranty in favor of Asta Group, Incorporated pursuant to which
the Credit Parties guaranty the obligations of Asta Funding under the Group Promissory Note,
provided, that such obligations are at all times subordinate to payment of the Obligations
of the Credit Parties to the Lender pursuant to an intercreditor agreement (and any other
applicable documents, from time to time) satisfactory, in form and substance, to the Lender
and (e) in connection with Pal XVI, as satisfied by Capital Contribution Amounts pursuant to
Section 6.4(d) above.

Liens; Lien Release.

No Credit Party shall create, incur, assume or permit to exist any Lien on or with respect to
its Portfolios, Accounts or any of its other properties or assets (whether now owned or hereafter
acquired) except for (a) Permitted Encumbrances; (b) Liens in existence on the date hereof and
summarized on the Disclosure Document securing the Indebtedness described on the Disclosure
Document and permitted refinancings, extensions and renewals thereof, including extensions or
renewals of any such Liens; provided, that the principal amount of the

 

30

 

Indebtedness so
secured is not increased and the Lien does not attach to any other property; (c) Liens created
after the date hereof by conditional sale or other title retention agreements (including Capital
Leases) or in connection with purchase money Indebtedness with respect to Equipment and Fixtures
and other capital assets acquired by any Credit Party in the ordinary course of business, involving
the incurrence of an aggregate amount of purchase money Indebtedness and Capital Lease Obligations
of not more than $1,000,000 outstanding at any one time for all such Liens (provided that
such Liens attach only to the assets subject to such purchase money debt and such Indebtedness is
incurred within 20 days following such purchase and does not exceed 100% of the purchase price of
the subject assets), (d) Liens securing Indebtedness permitted under Section 6.3(a)(i) as
provided for therein, (e) Liens arising from precautionary UCC-1 financing statements with respect
to Equipment or Real Estate which is the subject of an operating lease, (f) Liens against the
assets of Non-Credit Party Affiliates to secure loans in connection with the acquisition of
Portfolios by Non-Credit Party Affiliates which have been declined by the Lender. In addition, no
Credit Party shall become a party to any agreement, note, indenture or instrument, or take any
other action, that would prohibit the creation of a Lien on any of its properties or other assets
in favor of Lender as additional collateral for the Obligations, except operating leases, Capital
Leases or Licenses which prohibit Liens upon the assets that are subject thereto, and (g) claims
and other Liens of attorneys and servicers in the ordinary course of business relating to
Portfolios and Accounts (and the Proceeds thereof) that they are collecting or servicing.

In connection with any disposition of Accounts, and subject to the terms of this paragraph,
Lender hereby authorizes Borrower or its designees to file a partial release of those (and only
those) Liens and security interests of Lender that are necessary to permit the applicable Credit
Party to effect such disposition in the ordinary course of business and in accordance with this
Agreement, which authorization shall become effective upon, and only upon, satisfaction and
performance of all of the following additional conditions precedent: (i) at the time of such
disposition and after giving effect thereto, no Default, which is not reasonably capable of being
cured, has occurred, and no Event of Default shall have occurred and is continuing, (ii) the Net
Sales Proceeds generated from such disposition (whether in a single transaction or a series of
transactions that could reasonably be deemed to be part of the same transaction) shall not exceed
an amount equal to $2,500,000, (iii) the applicable Credit Party proposing to dispose of such
portion of a Portfolio shall have notified Lender in writing of such proposed disposition
contemporaneously with such Credit Party’s disposition, which notification shall be in form and
content reasonably acceptable to Lender, (iv) Lender shall be entitled to immediately make
appropriate adjustments to the Collateral based on the effect of such disposition, (v) the
partial release of Lender’s Liens and security interests shall relate solely and exclusively to the
Accounts that are the subject of such disposition, and (vi) all cash proceeds from the disposition
of such portion of a Portfolio shall be deposited directly into a Blocked Account established and
maintained by Lender, net of (A) commissions and other reasonable and customary transaction costs,
fees and expenses properly attributable to such transaction and payable by such Credit Party in
connection therewith (in each case, paid to non-Affiliates), and (B) sales, transfer, and similar
taxes payable by such Credit Party in connection therewith.

In connection with any disposition of Accounts in which the Net Sales Proceeds generated from
the disposition of such Accounts, whether in a single transaction or a series of transactions that
could reasonably be deemed to be part of the same transaction, exceeds an

 

31

 

amount equal to
$2,500,000, Lender shall (in a separate writing made by Lender at the time of each such
disposition) either authorize Borrowers and the applicable Credit Parties (and their designees) to
file such partial releases of Collateral Lender’s Liens and security interests or confirm in
writing Collateral Lender’s partial release of its Liens and security interests, as requested by
the applicable Credit Party, as are necessary to permit the applicable Credit Party to effect such
disposition, provided, that: (i) at the time of such disposition and after giving effect
thereto, no Default, which is not reasonably capable of being cured, has occurred, and no Event of
Default has occurred and is continuing, (ii) the applicable Credit Party proposing to dispose of
such Portfolio shall have notified Lender in writing of such proposed disposition at least two (2)
Business Days prior to the scheduled disposition of such Accounts and shall have delivered to
Lender the form of partial release to be filed in connection with such disposition, (iii) Borrowers
shall have provided Lender with a pro forma statement showing the effect of such disposition on the
Collateral, (iv) Lender shall be entitled to immediately make appropriate adjustments to the
Collateral based on the effect of such disposition, (v) the partial release of Lender’s Liens and
security interests shall relate solely and exclusively to the Accounts that are the subject of such
disposition, and (vi) all cash proceeds from the disposition of such Portfolio or portion thereof
shall be deposited directly into a Blocked Account established and maintained by Lender, net of (A)
commissions and other reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by such Credit Party in connection therewith (in each
case, paid to non Affiliates), and (B) sales, transfer, and similar taxes payable by such Credit
Party in connection therewith.

Sale of Stock and Assets. No Credit Party shall sell, transfer, convey, lease, assign or otherwise
dispose of any of its properties or other assets, including the Stock of any of its Subsidiaries
(whether in a public or a private offering or otherwise) or any of its Accounts, other than (a) the
sale of Portfolios and Accounts in the ordinary course of business in accordance with the terms of
this Agreement, (b) the sale, transfer, conveyance or other disposition by a Credit Party of
Equipment, Fixtures or Real Estate that are obsolete or no longer used or useful in such Credit
Party’s business and having an appraised value not exceeding $500,000 in any single transaction or
$1,000,000 in the aggregate in any Fiscal Year, (c) the sale, transfer, conveyance or other
disposition by a Credit Party of other Equipment and Fixtures having a value not exceeding $500,000
in any single transaction or $1,000,000 in the aggregate in any Fiscal Year, (d) the lease,
sublease or license of real property, provided, that such real property is not necessary
for the operations of Borrowers’
business, at the time thereof and after giving effect thereto, no Default, which is not reasonably
capable of being cured, or Event of Default has occurred and is continuing, and (e) the transfer of
assets permitted under subsection (iii) of Section 6.1. With respect to any disposition of
assets or other properties permitted pursuant to Sections 6.8(b), (c) and
(e) above, Lender agrees on reasonable prior written notice to release its Lien on such
assets or other properties in order to permit the applicable Credit Party to effect such
disposition and shall execute and deliver to Borrowers, at Borrowers’ expense, appropriate UCC-3
termination statements or authorizations to file appropriate UCC-3 termination statements and other
releases as reasonably requested by Borrowers.

ERISA. No Credit Party shall, or shall cause or permit any ERISA Affiliate to, cause or permit to
occur an event that could result in the imposition of a Lien under Section 412 of the IRC or
Section 302 or 4068 of ERISA or cause or permit to occur an ERISA Event to the extent such ERISA
Event could reasonably be expected to have a Material Adverse Effect.

 

32

 

Reserved.

Hazardous Materials. No Credit Party shall cause or permit a Release of any Hazardous Material on,
at, in, under, above, to, from or about any of the Real Estate where such Release would (a) violate
in any material respect, or form the basis for any material Environmental Liabilities under, any
Environmental Laws or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than such violations or
Environmental Liabilities that could not reasonably be expected to have a Material Adverse Effect.

Sale-Leasebacks. No Credit Party shall engage in any sale-leaseback, synthetic lease or similar
transaction involving any of its assets.

Cancellation of Indebtedness. No Credit Party shall cancel any claim or debt owing to it, except
(a) with respect to Accounts in the ordinary course of the Credit Party’s business, (b) for debt
owing by employees or consultants permitted under Section 6.4(b) which is cancelled and
treated as compensation expense and (c) for reasonable consideration negotiated on an arm’s length
basis and in the ordinary course of its business consistent with past practices.

Restricted Payments. No Credit Party shall make any Restricted Payment, except (a) payments of
principal and interest on intercompany loans and advances between Borrowers to the extent permitted
by Sections 6.2 and 6.3, (b) employee or consultant loans permitted under
Section 6.4.

Change of Corporate Name or Location; Change of Fiscal Year. Except as expressly permitted under Section 6.5, no Credit Party shall (a) change its
name as it appears in official filings in the state of its incorporation or other organization (b)
change its chief executive office, principal place of business, corporate offices or warehouses or
locations at which Collateral is held or stored, or the location of its records concerning the
Collateral, (c) change the type of entity that it is, (d) change its organization identification
number, if any, issued by its state of incorporation or other organization, or (e) change its state
of incorporation or organization, in each case without at least 14 days prior written notice to
Lender and after Lender’s written acknowledgment that any reasonable action requested by Lender in
connection therewith, including to continue the perfection of any Liens in favor of Lender in any
Collateral, has been completed or taken, and provided, that any such new location shall be
in the continental United States. No Credit Party shall change its Fiscal Year without Lender’s
prior written consent, which consent will not be unreasonably withheld.

No Impairment of Intercompany Transfers. No Credit Party shall directly or indirectly enter into
or become bound by any agreement, instrument, indenture or other obligation (other than this
Agreement and the other Loan Documents) that directly or indirectly restricts, prohibits or
requires the consent of any Person with respect to the payment of dividends or distributions or the
making or repayment of intercompany loans by a Subsidiary of any Borrower to any Borrower or
between Borrowers.

No Speculative Transactions. No Credit Party may engage in any material transaction involving
interest swaps, caps or collars, subject to the Lender’s prior written consent.

Leases; Real Estate Purchases. No Credit Party shall enter into or be a party to any operating
lease for Equipment or Real Estate, if the aggregate of all such operating lease payments payable
in any year for all Credit Parties on a consolidated basis would exceed

 

33

 

$1,500,000. No Credit
Party shall purchase a fee simple ownership interest in Real Estate unless (i) Lender receives 10
days prior written notice of such purchase, (ii) at its request, Lender shall have received a
mortgage or other similar instrument on such Real Estate, in form and substance satisfactory to
Lender, and (iii) the purchase of any Real Estate shall be on terms reasonably satisfactory to
Lender.

Changes Relating to Subordinated Debt; Material Contracts. No Credit Party shall change or amend
the terms of any Subordinated Debt (or any indenture or agreement in connection therewith) if the
effect of such amendment is to: (i) increase the interest rate on, or fees in respect of, such
Subordinated Debt; (ii) change the dates upon which payments of principal or interest are due on
such Subordinated Debt other than to extend such dates; (iii) change any covenant, default or event
of default other than to delete or make less restrictive any covenant, default or event of default
provision therein, or add any covenant, default or event of default with respect to such
Subordinated Debt; (iv) change the redemption or prepayment provisions of such Subordinated Debt
other than to extend the dates therefor or to reduce the premiums payable in connection therewith;
(v) grant any security or collateral to secure payment of such Subordinated Debt; (vi) change any
subordination or intercreditor provisions of such Subordinated Debt; (vii) change any provisions
providing that payments of
interest, principal or other obligations in respect of such Subordinated Debt may not be made in
cash or must be paid in a form other than cash; or (viii) change or amend any other term if such
change or amendment would materially increase the obligations of the Credit Party thereunder or
confer additional material rights on the holder of such Subordinated Debt in a manner adverse to
any Credit Party, Lender, except, in each case, as otherwise expressly provided in the
Subordination Agreement to which such Subordinated Debt is subject.

Credit Parties Other than Borrowers. From and after the Closing Date, none of the Credit Parties
other than Borrowers shall engage in any trade or business, or own any assets (other than Stock of
their Subsidiaries) or incur any Indebtedness or Guaranteed Indebtedness (other than the
Obligations), except that Asta Funding may acquire tangible assets in its own name for use and
operation by its Subsidiaries, and may acquire Portfolios in its own name for purposes of promptly
transferring and assigning such Portfolios to a Borrower or other Credit Party and each Guarantor
joined to this Agreement may continue to engage in the trade or business in which it was so engaged
(and own assets related thereto) at the time of such joinder. Notwithstanding the foregoing,
nothing herein shall limit any Credit Party from engaging in activities incidental to (a) the
maintenance of its corporate existence in compliance with applicable law, and (b) legal, tax and
accounting matters in connection with any of the foregoing activities.

Adverse Transactions. No Credit Party shall enter into or be a party to, or permit any of its
Subsidiaries to enter into or be a party to, any transaction the performance of which in the future
does or could reasonably be expected to result in a breach of any covenant contained herein or
giving rise to a Default, which is not reasonably capable of being cured, or Event of Default.

Disaster Recovery Plan. No Credit Party shall amend, modify or otherwise change the Disaster
Recovery Plan or any agreement related thereto without the prior written consent of the Lender,
which consent shall not be unreasonably withheld or delayed.

 

34

 

Limitation on Collection Fees. No Credit Party shall enter into any agreement to pay (and no
Credit Party shall pay or permit to be paid) any sums or amounts to any Servicing Agent or other
Person (including any collection agent, agency or attorney) as collection fees, collection charges,
contingent fees, premiums, compensation for services rendered or excess fees (however
characterized) in excess of an amount equal to fifty-one percent (51%) of the Collections obtained
by such Servicing Agent or other Person relating to Portfolios, except after prior written notice
to Lender.

No Amendment to Servicing Agreements. No Credit Party shall amend, change, modify or alter (or
permit to be amended, changed, modified or altered) any agreement, including any servicing
agreement, relating to the collection or receipt of Payments, Collections or Proceeds of any
Accounts of any of the Credit Parties in any material respect in which the Collections (net of any
collection costs and other fees permitted to be deducted from Collections by the express terms of
the corresponding servicing
agreement) in the aggregate for all Credit Parties during any Fiscal Quarter meet or exceed the
Servicing Threshold, except if that Credit Party promptly provides a copy thereof to Lender.

TERM

Termination. The financing arrangements contemplated hereby shall be in effect until the
Commitment Termination Date, and the Revolving Loan and all other Obligations shall be
automatically due and payable in full on such date.

Survival of Obligations Upon Termination of Financing Arrangements. Except as otherwise expressly
provided for in the Loan Documents, no termination or cancellation (regardless of cause or
procedure) of any financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Lender relating to any
unpaid portion of the Revolving Loan or any other Obligations, due or not due, liquidated,
contingent or unliquidated, or any transaction or event occurring prior to such termination, or any
transaction or event, the performance of which is required after the Commitment Termination Date.
Except as otherwise expressly provided herein or in any other Loan Document, all undertakings,
agreements, covenants, warranties and representations of or binding upon the Credit Parties, and
all rights of Lender, all as contained in the Loan Documents, shall not terminate or expire, but
rather shall survive any such termination or cancellation and shall continue in full force and
effect until the Termination Date; provided, that the provisions of Section 11, the
payment obligations under Sections 1.12 and 1.13, and the indemnities contained in
the Loan Documents shall survive the Termination Date.

EVENTS OF DEFAULT; RIGHTS AND REMEDIES

Events of Default. The occurrence of any one or more of the following events (regardless of the
reason therefor) shall constitute an “Event of Default” hereunder:

Any Borrower (i) fails to make any payment of principal of, or interest on, or Fees owing in
respect of, the Revolving Loan or any of the other Obligations when due and payable, or (ii) fails
to pay or reimburse Lender for any expense reimbursable hereunder or under any other Loan Document
within 10 days following Lender’s demand for such reimbursement or payment of expenses.

 

35

 

Any Credit Party fails or neglects to perform, keep or observe any of the provisions of
Sections 1.3, 1.5, 5.4(a) or 6, or any of the provisions set forth
in Annexes C or G, respectively, and the same shall remain unremedied for 5 days or
more, without any duty on the part of Lender to give notice to Borrowers of such failure or
neglect.

Any Borrower fails or neglects to perform, keep or observe any of the provisions of
Section 4 or any provisions set forth in Annexes E or F, respectively, and
the same shall remain unremedied for 10 days or more after written notice of such failure or
neglect.

Any Credit Party fails or neglects to perform, keep or observe any other provision of this
Agreement or of any of the other Loan Documents (other than any provision embodied in or covered by
any other subsection of this Section 8.1) and the same shall remain unremedied for 5 days
or more after written notice of such failure or neglect; provided, however, that
with respect to the provisions of Section 5.2(a), unless such failure or neglect to perform
could reasonably be expected to result in a Material Adverse Effect, the Credit Parties shall in
any event have 3 Business Days, commencing on the date a Senior Executive or other Person with
managerial responsibility has knowledge of such failure or neglect, within which to cure or remedy
such failure or neglect.

A default or breach occurs under any other agreement, document or instrument to which any
Credit Party is a party (other than the Receivables Financing Agreement or any agreement, document
or instrument related thereto) that is not cured within any applicable grace period therefor, and
such default or breach (i) involves the failure to make any payment when due in respect of any
Indebtedness or Guaranteed Indebtedness (other than the Obligations) of any Credit Party in excess
of $500,000 in the aggregate (including (x) undrawn committed or available amounts and (y) amounts
owing to all creditors under any combined or syndicated credit arrangements), or (ii) causes, or
permits any holder of such Indebtedness or Guaranteed Indebtedness or a trustee to cause,
Indebtedness or Guaranteed Indebtedness or a portion thereof in excess of $100,000 in the aggregate
to become due prior to its stated maturity or prior to its regularly scheduled dates of payment, or
cash collateral in respect thereof to be demanded, in each case, regardless of whether such default
is waived, or such right is exercised, by such holder or trustee.

Any information contained in any Loan Document is untrue or incorrect in any material respect
or any representation or warranty in any written statement, report, financial statement or
certificate made or delivered to Lender by any Credit Party is untrue or incorrect in any material
respect as of the date when made or deemed made.

Assets of any Credit Party, the aggregate fair market value of which is $250,000 or more for
all Credit Parties, are attached, seized, levied upon or subjected to a writ or distress warrant,
or come within the possession of any receiver, trustee, custodian or assignee for the benefit of
creditors of any Credit Party and such condition continues for 30 days or more (unless in the case
of any attachment with respect to which the applicable creditor does not have and no person for the
benefit of such creditor has or obtains physical possession of any assets of any Credit Party, and
such claim is being contested in good faith by such Credit Party or is fully bonded).

 

36

 

A case or proceeding is commenced against any Credit Party seeking a decree or order in
respect of such Credit Party (i) under the Bankruptcy Code, or any other applicable federal, state
or foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party’s assets, or (iii) ordering the winding-up or liquidation
of the affairs of such Credit Party, and such case or proceeding shall remain undismissed or
unstayed for 30 days or more or a decree or order granting the relief sought in such case or
proceeding shall be entered by a court of competent jurisdiction.

Any Credit Party (i) files a petition seeking relief under the Bankruptcy Code, or any other
applicable federal, state or foreign bankruptcy or other similar law, (ii) consents to or fails to
contest in a timely and appropriate manner the institution of proceedings thereunder or the filing
of any such petition or the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for such Credit Party or for
any substantial part of any such Credit Party’s assets, (iii) makes an assignment for the benefit
of creditors, (iv) takes any action in furtherance of any of the foregoing; or (v) admits in
writing its inability to, or is generally unable to, pay its debts as such debts become due.

A final judgment or judgments for the payment of an amount in excess of $250,000 in the
aggregate at any time is or are outstanding against one or more of the Credit Parties and the same
are not, within 30 days after the entry thereof, discharged or execution thereof stayed or bonded
pending appeal, or such judgments are not discharged prior to the expiration of any such stay;
provided, however, that in the event such judgment relates to Accounts for which
such Credit Party has a right of indemnification from the originator or seller of that Account,
then a final judgment or judgments for the payment of an amount in excess of $500,000 in the
aggregate at any time is or are outstanding against one or more of the Credit Parties and the same
are not, within 30 days after the entry thereof, discharged or execution thereof stayed or bonded
pending appeal, or such judgments are not discharged prior to the expiration of any such stay,
provided, that such judgment relates to Accounts for which such Credit Party is fully
indemnified by the originator or seller of that Account.

Any material provision of any Loan Document for any reason ceases to be valid, binding and
enforceable in accordance with its terms (or any Credit Party shall challenge the enforceability of
any Loan Document or shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms), or any Lien on any material assets
created under any Loan Document ceases to be a valid and perfected first priority Lien (except as
otherwise permitted herein or therein) in any of the Collateral purported to be covered thereby.

Any Change of Control occurs.

Any default or breach by any Credit Party or any other guarantor, grantor or pledgor in the
observance or performance of any covenant or agreement contained or incorporated by reference in
any Collateral Document and such default shall continue beyond the grace period, if any, provided
in such Collateral Document.

 

37

 

A default or breach by Asta Funding under that certain Undertaking Agreement dated as of March
2, 2007 made by Asta Funding for the benefit of BMO Capital Markets Corp., as collateral agent for
the benefit of the secured parties under that certain Receivables Financing Agreement dated as of
March 2, 2007 by and among Palisades Acquisition XVI, LLC, as borrower, Palisades Collection,
L.L.C., as servicer, Fairway Finance Company, LLC, as lender, BMO Capital Markets Corp., as
administrator and collateral agent, and Bank of Montreal, as liquidity agent (the “Receivables
Financing Agreement”) that is not cured within any applicable grace period therefor and which
involves damages in excess of $2,000,000 in the aggregate.

A default or breach by Palisades under the Receivables Financing Agreement or any agreement,
document or instrument related thereto to which Palisades is a party that is not cured within any
applicable grace period therefore and which involves damages in excess of $2,000,000 in the
aggregate.

Remedies.

If any Default, which is not reasonably capable of being cured, or Event of Default has
occurred and is continuing, Lender may, without notice, suspend the Revolving Loan facility with
respect to additional Advances, whereupon any additional Advances shall be made or incurred in the
sole discretion of Lender so long as such Default, which is not reasonably capable of being cured,
or Event of Default is continuing. If any Default, which is not reasonably capable of being cured,
or Event of Default has occurred and is continuing, Lender may, without notice except as otherwise
expressly provided herein, increase the rate of interest applicable to the Revolving Loan to the
Default Rate.

If any Event of Default has occurred and is continuing, Lender may without notice: (i)
terminate the Revolving Loan facility with respect to further Advances; (ii) declare all or any
portion of the Obligations, including all or any portion of any Revolving Loan to be forthwith due
and payable, without presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrowers and each other Credit Party; or (iii) exercise any rights and
remedies provided to Lender under the Loan Documents or at law or equity, including all remedies
provided under the Code; provided, that upon the occurrence of an Event of Default
specified in Sections 8.1(h) or (i), the Revolving Loan facility shall be
immediately terminated and all of the Obligations, including the aggregate Revolving Loan, shall
become immediately due and payable without declaration, notice or demand by any Person.

Waivers by Credit Parties. Except as otherwise provided for in this Agreement or by applicable
law, each Credit Party waives (including for purposes of Section 12), to the extent
permitted by law: (a) presentment, demand and protest and notice of presentment, dishonor, notice
of intent to accelerate, notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper, accounts, contract
rights, documents, instruments, chattel paper and guaranties at any time held by Lender on which
any Credit Party may in any way be liable, and hereby ratifies and confirms whatever Lender may do
in this regard, (b) all rights to notice and a hearing prior to Lender’s taking possession or
control of, or to Lender’s replevin, attachment or levy upon, the Collateral or any bond or
security that might be required by any court prior to allowing Lender to exercise any of their
remedies, and (c) the benefit of all valuation, appraisal, marshaling and exemption laws.

 

38

 

ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT

Assignment and Participations.

Subject to the terms of this Section 9.1, Lender may make an assignment to a Qualified
Assignee of all, or sell participations in, at any time or times, the Loan Documents, Revolving
Loan and any Commitment or any portion thereof or interest therein, including Lender’s rights,
title, interests, remedies, powers or duties thereunder.

Any participation by Lender of all or any part of its Commitments shall be made with the
understanding that all amounts payable by Borrowers hereunder shall be determined as if Lender had
not sold such participation, and that the holder of any such participation shall not be entitled to
require Lender to take or omit to take any action hereunder except actions directly affecting (i)
any reduction in the principal amount of, or interest rate or fees payable with respect to, any
Loan in which such holder participates, (ii) any extension of the scheduled amortization of the
principal amount of any Loan in which such holder participates or the final maturity date thereof,
and (iii) any release of all or substantially all of the Collateral (other than in accordance with
the terms of this Agreement, the Collateral Documents or the other Loan Documents). Solely for
purposes of Sections 1.7, 1.9 and 1.10, each Borrower acknowledges and
agrees that a participation shall give rise to a direct obligation of Borrowers to the participant
and the participant shall be considered to be a “Lender”. Except as set forth in the preceding
sentence no Borrower or Credit Party shall have any obligation or duty to any participant.

Each Credit Party executing this Agreement shall assist Lender permitted to sell assignments
or participations under this Section 9.1 as reasonably required to enable the assigning or
selling Lender to effect any such assignment or participation, including the execution and delivery
of any and all agreements, notes and other documents and instruments as shall be requested and, if
requested by Lender, the preparation of informational materials for, and the participation of
management in meetings with, potential assignees or participants. Each Credit Party executing this
Agreement shall certify the correctness, completeness and accuracy of all descriptions of the
Credit Parties and their respective affairs contained in any selling materials provided by them and
all other information provided by them and included in such materials.

Lender may furnish any information concerning Credit Parties in the possession of Lender from
time to time to assignees and participants (including prospective assignees and participants);
provided, that Lender shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 11.7.

So long as no Event of Default has occurred and is continuing, no Lender shall assign or sell
participations in any portion of its Revolving Loan or Commitments to a potential Lender or
participant, if, as of the date of the proposed assignment or sale, the assignee Lender or
participant would be subject to capital adequacy or similar requirements under Section
1.10(a), increased costs under Section 1.10(b), or withholding taxes in accordance with
Section 1.9(a).

SUCCESSORS AND ASSIGNS

 

39

 

Successors and Assigns. This Agreement and the other Loan Documents shall be binding on and shall
inure to the benefit of each Credit Party, Lender and its respective successors and assigns
(including, in the
case of any Credit Party, a debtor-in-possession on behalf of such Credit Party), except as
otherwise provided herein or therein. No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under any of the other
Loan Documents without the prior express written consent of Lender. Any such purported assignment,
transfer, hypothecation or other conveyance by any Credit Party without the prior express written
consent of Lender shall be void. The terms and provisions of this Agreement are for the purpose of
defining the relative rights and obligations of each Credit Party and Lender with respect to the
transactions contemplated hereby and no Person shall be a third party beneficiary of any of the
terms and provisions of this Agreement or any of the other Loan Documents.

MISCELLANEOUS

Complete Agreement; Modification of Agreement. The Loan Documents constitute the complete
agreement between the parties with respect to the subject matter thereof and may not be modified,
altered or amended. Any letter of interest, commitment letter or fee letter or confidentiality
agreement, if any, between any Credit Party and Lender or any of their respective Affiliates,
predating this Agreement and relating to a financing of substantially similar form, purpose or
effect shall be superseded by this Agreement.

Fees and Expenses. Borrowers shall reimburse the Lender for all reasonable out-of-pocket fees,
costs and expenses, including the reasonable fees, costs and expenses of counsel, consultants,
field examiners or other advisors (including environmental and management consultants and
appraisers), incurred in connection with the negotiation and preparation of the Loan Documents and
incurred in connection with:

the forwarding to Borrowers or any other Person on behalf of Borrowers by Lender of the
proceeds of any Loan (including a wire transfer fee, per wire transfer, at Lender’s then prevailing
wire transfer fee rate);

any amendment, modification or waiver of, consent with respect to, or termination of, any of
the Loan Documents or Related Transactions Documents or advice in connection with the syndication
and administration of the Revolving Loan made pursuant hereto or its rights hereunder or
thereunder;

any litigation, contest, dispute, suit, proceeding or action (whether instituted by any Agent,
Lender, any Borrower or any other Person and whether as a party, witness or otherwise) in any way
relating to the Collateral, any of the Loan Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any litigation, contest, dispute, suit,
case, proceeding or action, and any appeal or review thereof, in connection with a case commenced
by or against any or all of the Borrowers or any other Person that may be obligated to the Lender
by virtue of the Loan Documents; including any such litigation, contest, dispute, suit, proceeding
or action arising in connection with any work-out or restructuring of the Revolving Loan during the
pendency of one or more Events of Default; provided, that no Person shall be entitled to
reimbursement under this subsection (c) in respect of any litigation, contest, dispute, suit,
proceeding or action to the extent any of the foregoing

 

40

 

results from such Person’s gross negligence or willful misconduct (as finally determined by a
court of competent jurisdiction);

any attempt to enforce any remedies of the Lender against any or all of the Credit Parties or
any other Person that may be obligated to Lender by virtue of any of the Loan Documents, including
any such attempt to enforce any such remedies in the course of any work-out or restructuring of the
Revolving Loan during the pendency of one or more Events of Default;

any workout or restructuring of the Revolving Loan during the pendency of one or more Events
of Default; and

subject to the provisions and terms contained in Section 1.8 hereof relative to the
payment of costs incurred in conducting field examinations, efforts to (i) monitor the Revolving
Loan or any of the other Obligations, (ii) evaluate, observe or assess any of the Credit Parties or
their respective affairs, and (iii) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral;

including, as to each of subsections (a) through (f) above, all reasonable attorneys’ and other
professional and service providers’ fees arising from such services and other advice, assistance or
other representation, including those in connection with any appellate proceedings, and all
expenses, costs, charges and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.2, all of which shall
be payable, on demand, by Borrowers to Lender. Without limiting the generality of the foregoing,
such expenses, costs, charges and fees may include: fees, costs and expenses of accountants,
environmental advisors, appraisers, investment bankers, management and other consultants and
paralegals; court costs and expenses; photocopying and duplication expenses; court reporter fees,
costs and expenses; long distance telephone charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and expenses for travel, lodging and food paid or incurred
in connection with the performance of such legal or other advisory services.

No Waiver. Lender’s failure, at any time or times, to require strict performance by the Credit
Parties of any provision of this Agreement or any other Loan Document shall not waive, affect or
diminish any right of such Lender thereafter to demand strict compliance and performance herewith
or therewith. Any suspension or waiver of an Event of Default shall not suspend, waive or affect
any other Event of Default whether the same is prior or subsequent thereto and whether the same or
of a different type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party contained in this
Agreement or any of the other Loan Documents and no Default or Event of Default by any Credit Party
shall be deemed to have been suspended or waived by Lender, unless such waiver or suspension is by
an instrument in writing signed by an officer of or other authorized employee of Lender, and
directed to Borrowers specifying such suspension or waiver.

Remedies. Lender’s rights and remedies under this Agreement shall be cumulative and nonexclusive of any
other rights and remedies that Lender may have under any other agreement, including the other Loan
Documents, by operation of law or otherwise. Recourse to the Collateral shall not be required.

 

41

 

Severability. Wherever possible, each provision of this Agreement and the other Loan Documents
shall be interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement or any other Loan Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining provisions of this
Agreement or such other Loan Document.

Conflict of Terms. Except as otherwise provided in this Agreement or any of the other Loan
Documents by specific reference to the applicable provisions of this Agreement, if any provision
contained in this Agreement conflicts with any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.

Confidentiality. Lender agrees to use commercially reasonable efforts (equivalent to the efforts
Lender applies to maintaining the confidentiality of its own confidential information) to maintain
as confidential all confidential information provided to them by the Credit Parties for a period of
2 years following receipt thereof, except that Lender may disclose such information on a
confidential “need to know” basis (a) to Persons employed or engaged by Lender; (b) to any bona
fide assignee or participant or potential assignee or participant that has agreed to comply with
the covenant contained in this Section 11.7 (and any such bona fide assignee or participant
or potential assignee or participant may disclose such information to Persons employed or engaged
by it as described in subsection (a) above); (c) as required or requested by any Governmental
Authority or reasonably believed by Lender to be compelled by any court decree, subpoena or legal
or administrative order or process; (d) as, on the advice of Lender’s, counsel, is required by law;
(e) in connection with the exercise of any right or remedy under the Loan Documents or in
connection with any Litigation to which Lender is a party; (f) that ceases to be confidential
through no fault of Lender; or (g) to Persons that are approved in writing by Borrower
Representative.

Notwithstanding anything to the contrary set forth herein or in any other agreement to
which the parties hereto are parties or by which they are bound, the obligations of
confidentiality contained herein and therein, as they relate to the transactions contemplated by
the Agreement and the other loan documents (the “Transaction”), shall not apply to the
federal tax structure or federal tax treatment of the Transaction, and each party hereto (and
any employee, representative, agent of any party hereto) may disclose to any and all persons,
without limitation of any kind, the federal tax structure and federal tax treatment of the
Transaction. The preceding sentence is intended to cause the Transaction to be treated as not
having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3)
(or any successor provision) of the Treasury Regulations promulgated under Section
6011 of the Internal Revenue Code of 1986, as amended, and shall be construed in a manner
consistent with such purpose. In addition, each party hereto acknowledges that it has no
proprietary or exclusive rights to the federal tax structure of the Transaction or any federal
tax matter or federal tax idea related to the Transaction.

GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND
THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY

 

42

 

APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK, NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES AND LENDER
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT LENDER AND
THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF NEW YORK COUNTY; PROVIDED, FURTHER, THAT NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LENDER. EACH CREDIT PARTY
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED
IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH
IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF SUCH CREDIT PARTY’S ACTUAL RECEIPT THEREOF OR 5 DAYS AFTER DEPOSIT IN THE UNITED STATES
MAILS, PROPER POSTAGE PREPAID.

Notices. Except as otherwise provided herein, whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall or may be given to or
served upon any of the parties by any other parties, or whenever any of the parties desires to give
or serve upon any other parties any communication with respect to this Agreement, each such notice,
demand, request, consent, approval, declaration or other communication shall be in writing and
shall be deemed to have been validly served, given or delivered: (a) upon the earlier of actual
receipt and 5 days after deposit in the United States Mail, registered or certified mail, return
receipt requested, with proper postage prepaid; (b) upon transmission, when sent by telecopy or
other similar facsimile transmission (with such telecopy or facsimile promptly confirmed by
delivery of a copy by personal delivery or United States Mail as otherwise provided in this
Section 11.9); (c) 1 Business Day after deposit with a reputable overnight courier with all
charges prepaid or (d) when delivered, if hand-delivered by messenger, all of which shall be
addressed to the party to be notified and sent to the address or facsimile number indicated in
Annex I or to such other address (or facsimile number) as may be substituted by notice
given as herein provided. The giving of any notice required hereunder may be waived in writing by
the party entitled to receive such notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to

 

43

 

any Person (other than
Borrower Representative or Lender) designated in Annex I to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration
or other communication.

Section Titles. The Section titles and Table of Contents contained in this Agreement are and shall
be without substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto.

Counterparts. This Agreement may be executed in any number of separate counterparts, each of which
shall collectively and separately constitute one agreement.

WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS
ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN LENDER AND ANY CREDIT PARTY ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED
THERETO.

Press Releases and Related Matters. Each Credit Party executing this Agreement agrees that neither
it nor its Affiliates will in the future issue any press releases or other public disclosure (i)
using the name of BLUSA or its affiliates or, (ii) other than standard disclosures associated with
its financial reporting or other
similar, ordinary course of business disclosures, referring to this Agreement, the other Loan
Documents or the Related Transactions Documents without at least 2 Business Days’ prior notice to
BLUSA and without obtaining BLUSA’s prior written consent unless (and only to the extent that) such
Credit Party or Affiliate is required to do so under law and then, in any event, such Credit Party
or Affiliate will consult with BLUSA before issuing such press release or other public disclosure.
Each Credit Party consents to the publication by Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement. Lender reserves
the right to provide to industry trade organizations information necessary and customary for
inclusion in league table measurements.

Reinstatement. This Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against any Borrower for liquidation or reorganization, should
any Borrower become insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any Borrower’s assets,
and shall continue to be effective or to be reinstated, as the case may be, if at any time payment
and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations,
whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be

 

44

 

reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.

Advice of Counsel. Each of the parties represents to each other party hereto that it has discussed
this Agreement and, specifically, the provisions of Sections 11.8 and 11.12, with
its counsel.

No Strict Construction. The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.

Lender for Service. Each Credit Party hereby appoints, and Borrower Representative hereby accepts
the appointment of, Borrower Representative, located at 210 Sylvan Avenue, Englewood Cliffs, New
Jersey 07632 as the agent for service of process for such Credit Party solely in connection with
the Loan Documents. Such appointment shall not be terminated by Borrower Representative or any
Credit Party without the prior written consent of Lender.

CROSS-GUARANTY; SUBORDINATION

Cross-Guaranty. Each Borrower hereby agrees that such Borrower is jointly and severally liable for, and hereby
absolutely and unconditionally guarantees to Lender and its respective successors and assigns, the
full and prompt payment (whether at stated maturity, by acceleration or otherwise) and performance
of, all Obligations owed or hereafter owing to Lender by each other Borrower. Each Borrower agrees
that its guaranty obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this Section 12 shall not be discharged until
payment and performance, in full, of the Obligations has occurred, and that its obligations under
this Section 12 shall be absolute and unconditional, irrespective of, and unaffected by,

the genuineness, validity, regularity, enforceability or any future amendment of, or change
in, this Agreement, any other Loan Document or any other agreement, document or instrument to which
any Borrower is or may become a party;

the absence of any action to enforce this Agreement (including this Section 12) or any
other Loan Document or the waiver or consent by Lender with respect to any of the provisions
thereof;

the existence, value or condition of, or failure to perfect its Lien against, any security for
the Obligations or any action, or the absence of any action, by Lender in respect thereof
(including the release of any such security);

the insolvency of any Credit Party; or

any other action or circumstances that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor.

Each Borrower shall be regarded, and shall be in the same position, as principal debtor with
respect to the Obligations guaranteed hereunder.

 

45

 

Waivers by Borrowers. Each Borrower expressly waives all rights it may have now or in the future
under any statute, or at common law, or at law or in equity, or otherwise, to compel Lender to
marshal assets or to proceed in respect of the Obligations guaranteed hereunder against any other
Credit Party, any other party or against any security for the payment and performance of the
Obligations before proceeding against, or as a condition to proceeding against, such Borrower. It
is agreed among each Borrower, Lender that the foregoing waivers are of the essence of the
transaction contemplated by this Agreement and the other Loan Documents and that, but for the
provisions of this Section 12 and such waivers, Lender would decline to enter into this
Agreement.

Benefit of Guaranty. Each Borrower agrees that the provisions of this Section 12 are for
the benefit of Lender and its successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as between any other Borrower and Lender, the obligations of such other
Borrower under the Loan Documents.

Subordination of Subrogation, Etc. Notwithstanding anything to the contrary in this Agreement or in any other Loan Document, and
except as set forth in Section 12.9, each Borrower hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in equity to subrogation,
reimbursement, exoneration, contribution, indemnification or set off and any and all defenses
available to a surety, guarantor or accommodation co-obligor until the Obligations are indefeasibly
paid in full in cash. Each Borrower acknowledges and agrees that this subordination is intended to
benefit Lender and shall not limit or otherwise affect such Borrower’s liability hereunder or the
enforceability of this Section 12, and that Lender and its successors and assigns are
intended third party beneficiaries of the waivers and agreements set forth in this Section
12.4.

Election of Remedies. If Lender may, under applicable law, proceed to realize its benefits under
any of the Loan Documents giving Lender a Lien upon any Collateral, whether owned by any Borrower
or by any other Person, either by judicial foreclosure or by non-judicial sale or enforcement,
Lender may, at its sole option, determine which of its remedies or rights it may pursue without
affecting any of its rights and remedies under this Section 12. If, in the exercise of any
of its rights and remedies, Lender shall forfeit any of its rights or remedies, including its right
to enter a deficiency judgment against any Borrower or any other Person, whether because of any
applicable laws pertaining to “election of remedies” or the like, each Borrower hereby consents to
such action by Lender and waives any claim based upon such action, even if such action by Lender
shall result in a full or partial loss of any rights of subrogation that each Borrower might
otherwise have had but for such action by Lender. Any election of remedies that results in the
denial or impairment of the right of Lender to seek a deficiency judgment against any Borrower
shall not impair any other Borrower’s obligation to pay the full amount of the Obligations. In the
event Lender shall bid at any foreclosure or trustee’s sale or at any private sale permitted by law
or the Loan Documents, Lender may bid all or less than the amount of the Obligations and the amount
of such bid need not be paid by Lender but shall be credited against the Obligations owing to it.
The amount of the successful bid at any such sale, whether Lender or any other party is the
successful bidder, shall be conclusively deemed to be the fair market value of the Collateral and
the difference between such bid amount and the remaining balance of the Obligations shall be
conclusively deemed to be the amount of the Obligations guaranteed under this Section 12,
notwithstanding that any present or future law or court

 

46

 

decision or ruling may have the effect of
reducing the amount of any deficiency claim to which Lender might otherwise be entitled but for
such bidding at any such sale.

Limitation. Notwithstanding any provision herein contained to the contrary, each Borrower’s
liability under this Section 12 (which liability is in any event in addition to amounts for
which such Borrower is primarily liable under Section 1) shall be limited to an amount not
to exceed as of any date of determination the amount that could be claimed by Lender from such
Borrower under this Section 12 without rendering such claim void or voidable under Section
548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account,
among other things, such Borrower’s right of contribution and indemnification from each other
Borrower under Section 12.7.

Contribution with Respect to Guaranty Obligations.

To the extent that any Borrower shall make a payment under this Section 12 of all or
any of the Obligations (other than the Revolving Loan made to that Borrower for which it is
primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor
Payments then previously or concurrently made by any other Borrower, exceeds the amount that such
Borrower would otherwise have paid if each Borrower had paid the aggregate Obligations satisfied by
such Guarantor Payment in the same proportion that such Borrower’s “Allocable Amount” (as defined
below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable
Amounts of each of the Borrowers as determined immediately prior to the making of such Guarantor
Payment, then, following indefeasible payment in full in cash of the Obligations and termination of
the Commitments, such Borrower shall be entitled to receive contribution and indemnification
payments from, and be reimbursed by, each other Borrower for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to such Guarantor
Payment.

As of any date of determination, the “Allocable Amount” of any Borrower shall be equal
to the maximum amount of the claim that could then be recovered from such Borrower under this
Section 12 without rendering such claim void or voidable under Section 548 of Chapter 11 of
the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.

This Section 12.7 is intended only to define the relative rights of Borrowers and
nothing set forth in this Section 12.7 is intended to or shall impair the obligations of
Borrowers, jointly and severally, to pay any amounts as and when the same shall become due and
payable in accordance with the terms of this Agreement, including Section 12.1. Nothing
contained in this Section 12.7 shall limit the liability of any Borrower to pay the
Revolving Loan made directly or indirectly to that Borrower and accrued interest, Fees and expenses
with respect thereto for which such Borrower shall be primarily liable.

The parties hereto acknowledge that the rights of contribution and indemnification hereunder
shall constitute assets of the Borrower to which such contribution and indemnification is owing.

 

47

 

The rights of the indemnifying Borrowers against other Credit Parties under this Section
12.7 shall be exercisable upon the full and indefeasible payment of the Obligations and the
termination of the Commitment.

Liability Cumulative. The liability of Borrowers under this Section 12 is in addition to
and shall be cumulative with all liabilities of each Borrower to Lender under this Agreement and
the other Loan Documents to which such Borrower is a party or in respect of any Obligations or
obligation of the other Borrower, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to the contrary.

Subordination.

Each Credit Party executing this Agreement covenants and agrees that the payment of all
indebtedness, principal, interest (including interest which accrues after the commencement of any
case or proceeding in bankruptcy, or for the reorganization of any Credit Party), fees, charges,
expenses, attorneys’ fees and any other sum, obligation or liability owing by any other Credit
Party to such Credit Party, including any intercompany trade payables or royalty or licensing fees
(collectively, the “Intercompany Obligations”), is subordinated, to the extent and in the
manner provided in this Section 12.9, to the prior payment in full of all Obligations
(herein, the “Senior Obligations”) and that the subordination is for the benefit of the
Lender, and Lender may enforce such provisions directly, provided, that regularly scheduled
payments under Intercompany Obligations may be made so long as no Default, which is not reasonably
capable of being cured, or Event of Default has occurred and is continuing.

Each Credit Party executing this Agreement hereby (i) authorizes Lender to demand specific
performance of the terms of this Section 12.9, whether or not any other Credit Party shall
have complied with any of the provisions hereof applicable to it, at any time when such Credit
Party shall have failed to comply with any provisions of this Section 12.9 which are
applicable to it and (ii) irrevocably waives any defense based on the adequacy of a remedy at law,
which might be asserted as a bar to such remedy of specific performance.

Upon any distribution of assets of any Credit Party in any dissolution, winding up,
liquidation or reorganization (whether in bankruptcy, insolvency or receivership proceedings or
upon an assignment for the benefit of creditors or otherwise):

The Lender shall first be entitled to receive payment in full in cash of the Senior
Obligations before any Credit Party is entitled to receive any payment on account of the
Intercompany Obligations.

Any payment or distribution of assets of any Credit Party of any kind or character, whether in
cash, property or securities, to which any other Credit Party would be entitled except for the
provisions of this Section 12.9(c), shall be paid by the liquidating trustee or agent or
other Person making such payment or distribution directly to the Lender, to the extent necessary to
make payment in full of all Senior Obligations remaining unpaid after giving effect to any
concurrent payment or distribution or provisions therefor to the Lender.

In the event that notwithstanding the foregoing provisions of this Section 12.9(c),
any payment or distribution of assets of any Credit Party of any kind or character,

 

48

 

whether in
cash, property or securities, shall be received by any other Credit Party on account of the
Intercompany Obligations before all Senior Obligations are paid in full, such payment or
distribution shall be received and held in trust for and shall be paid over to the Lender for
application to the payment of the Senior Obligations until all of the Senior Obligations shall have
been paid in full, after giving effect to any concurrent payment or distribution or provision
therefor to the Lender.

No right of the Lender or any other present or future holders of any Senior Obligations to
enforce the subordination provisions herein shall at any time in any way be prejudiced or impaired
by any act or failure to act on the part of any Credit Party or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by any Credit Party
with the terms hereof, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.

[Signature Pages to Follow]

 

49

 

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written
above.

	 	 	 	 	 
	 	BORROWERS:

ASTA FUNDING ACQUISITION I, LLC

ASTA FUNDING ACQUISITION II, LLC

PALISADES COLLECTION, L.L.C.

PALISADES ACQUISITION I, LLC

PALISADES ACQUISITION II, LLC

PALISADES ACQUISITION IV, LLC

PALISADES ACQUISITION V, LLC

PALISADES ACQUISITION VI, LLC

PALISADES ACQUISITION VII, LLC

PALISADES ACQUISITION VIII, LLC

PALISADES ACQUISITION IX, LLC

PALISADES ACQUISITION X, LLC

CLIFFS PORTFOLIO ACQUISITION I, LLC

SYLVAN ACQUISITION I, LLC

OPTION CARD, LLC

 	 
	 	By:  	/s/ Gary Stern
 	 
	 	 	Name:  	Gary Stern 	 
	 	 	Title:  	President 	 
	 
	 	GUARANTORS:

ASTA FUNDING, INC.

 	 
	 	By:  	/s/ Gary Stern
 	 
	 	 	Name:  	Gary Stern 	 
	 	 	Title:  	President 	 
	 

 

 

 

	 	 	 	 	 
	 	COMPUTER FINANCE, LLC 

ASTAFUNDING.COM, LLC

ASTA COMMERCIAL, LLC

VATIV RECOVERY SOLUTIONS, LLC

ASTA FUNDING ACQUISITION IV, LLC

PALISADES ACQUISITION XI, LLC

PALISADES ACQUISITION XII, LLC

PALISADES ACQUISITION XIII, LLC

PALISADES ACQUISITION XIV, LLC

PALISADES ACQUISITION XV, LLC

PALISADES ACQUISITION XVII, LLC

PALISADES ACQUISITION XVIII, LLC

CITIZENS LENDING GROUP LLC

VENTURA SERVICES, LLC

 	 
	 	By:  	/s/ Gary Stern
 	 
	 	 	Name:  	Gary Stern 	 
	 	 	Title:  	President 	 
	 
	 	LENDER:

BANK LEUMI USA,

as a Lender

 	 
	 	By:  	/s/ Paul J. DeChagas
 	 
	 	 	Name:  	Paul J. DeChagas 	 
	 	 	Title:  	Vice President 	 
	 	 	 
	 	By:  	                                              /s/ Scott Morello
 	 
	 	 	Name:  	Scott Morello 	 
	 	 	Title:  	Senior Vice President 	 
	 

 

 

 

ANNEX A (RECITALS)

TO

LOAN AGREEMENT

DEFINITIONS

Capitalized terms used in the Loan Documents shall have (unless otherwise provided elsewhere
in the Loan Documents) the following respective meanings, and all references to Sections, Exhibits,
Schedules or Annexes in the following definitions shall refer to Sections, Exhibits, Schedules or
Annexes of or to the Agreement:

“Account Debtor” means any Person who may become obligated to any Credit Party under,
with respect to, or on account of, an Account, Chattel Paper, Instruments or General Intangibles
(including a payment intangible).

“Accounts” means all “accounts,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, including (a) all accounts receivable, other receivables,
book debts, consumer accounts and other forms of obligations (including any such obligations that
may be characterized as an account or contract right under the Code), (b) all of each Credit
Party’s rights in, to and under all services, (c) all rights to payment due to any Credit Party for
property sold, leased, licensed, assigned or otherwise disposed of, for a policy of insurance
issued or to be issued, for a secondary obligation incurred or to be incurred, for energy provided
or to be provided, for the use or hire of a vessel under a charter or other contract, arising out
of the use of a credit card or charge card, or for services rendered or to be rendered by such
Credit Party or in connection with any other transaction (whether or not yet earned by performance
on the part of such Credit Party), (d) all health care insurance receivables and (e) all collateral
security of any kind, given by any Account Debtor or any other Person with respect to any of the
foregoing. The term Accounts shall also include forms of obligations evidenced by Chattel Paper or
Instruments and Accounts relating to Auto Loans and Consumer Loans.

“Advance” or “Advances” has the meaning ascribed to it in Section
1.1(a).

“Affiliate” means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary,
10% or more of the Stock having ordinary voting power in the election of directors of such Person,
(b) each Person that controls, is controlled by or is under common control with such Person, (c)
each of such Person’s officers, directors, joint venturers (except with respect to the joint
venturer, EMCC, Inc., and any other joint venture approved by Lender, which approval shall not be
unreasonably withheld) and partners (d) in the case of Borrowers, the immediate family members,
spouses and lineal descendants of individuals who are Affiliates of any Borrower, and (e) an entity
that is wholly owned by Asta Funding and is engaged in the business of acquiring and/or managing
Portfolios and executes and delivers to Lender an Affiliate Guaranty, an Affiliate Security
Agreement and an Affiliate Confirmation. For the purposes of this definition, “control” of a
Person shall mean the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting securities, by
contract or otherwise; provided, however, that the term “Affiliate” shall
specifically exclude Lender.

 

 

 

“Affiliate Confirmation” means the agreement executed by each Affiliate in form of
Exhibit C annexed to the Disclosure Document.

“Affiliate Guaranty” means a guaranty, in form acceptable to Lender at the time of
execution, executed by an Affiliate of all of the Obligations.

“Affiliate Security Agreement” means a security agreement, in form acceptable to
Lender at the time of execution, executed by an Affiliate granting to Lender a security interest in
and lien on its Collateral.

“Agreement” means this Loan Agreement by and among Borrowers, the other Credit Parties
party hereto and BLUSA, Lender, as the same may be amended, supplemented, restated or otherwise
modified from time to time.

“Allocable Amount” has the meaning ascribed to it in Section 12.7(b).

“Appendices” has the meaning ascribed to it in the recitals to the Agreement.

“Asta Funding” means Asta Funding, Inc.

“Auto Contract” means any agreement or contract or other evidence of debt executed by
an Account Debtor in connection with an Auto Loan and any amendments thereto.

“Auto Loan” means all automobile loans or leases presently and hereafter owned by
Borrowers, set forth in a written report or in computer discs, from time to time, delivered to
Lender, which computer discs shall be in the current format or any other format acceptable to
Lender, together with each Auto Contract, chattel paper, instrument, document, general intangible,
guarantee and all collateral security held with respect to such loans.

“Average Collections” shall mean the average monthly amount of the actual Collections
(net of any collection costs and other fees permitted to be deducted from Collections by the
express terms of the servicing agreement that corresponds to such Collections) with respect to an
Eligible Portfolio in the three (3) full calendar months immediately preceding the date of
computation or determination. Average Collections shall exclude Proceeds from the sale of
Portfolios.

“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11
U.S.C. §§ 101 et seq.

“Blocked Account” means each deposit account of each Borrower maintained at BLUSA or a
Third-Party Bank subject to a blocked account control agreement in favor of Lender, acceptable to
Lender in its sole discretion.

“Blocked Account Third-Party Bank” means each deposit account of each Borrower
maintained at a bank or financial institution other than BLUSA subject to a blocked account control
agreement in favor of BLUSA, acceptable to Lender in its sole discretion.

“BLUSA” means Bank Leumi USA, a New York bank.

 

A-2

 

“Books and Records” means all records, in any format whatsoever and the computer
software, programs and access codes, relating to each Consumer Loan and the Collateral.

“Borrower Representative” means Palisades in its capacity as Borrower Representative
pursuant to the provisions of Section 1.1(c).

“Borrowers” and “Borrower” have the respective meanings ascribed thereto in
the preamble to the Agreement.

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banks
are required or permitted to be closed in the State of New York.

“Capital Contribution Amounts” shall have the meaning set forth in Section
6.4(d).

“Capital Expenditures” means, with respect to any Person, all expenditures (by the
expenditure of cash or the incurrence of Indebtedness) by such Person during any measuring period
for any fixed assets or improvements or for replacements, substitutions or additions thereto that
have a useful life of more than one year and that are required to be capitalized under GAAP.

“Capital Lease” means, with respect to any Person, any lease of any property (whether
real, personal or mixed) by such Person as lessee that, in accordance with GAAP, would be required
to be classified and accounted for as a capital lease on a balance sheet of such Person.

“Capital Lease Obligation” means, with respect to any Capital Lease of any Person, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP, would appear on a
balance sheet of such lessee in respect of such Capital Lease.

“Cash Equivalent Investments” means investments deposited with a Lender which can
easily, readily and quickly be converted into cash, including Treasury bills (T-bills), money
market funds, short-term certificates of deposit, U.S. Government Securities, and savings
accounts.

“Change of Control” means any event, transaction or occurrence as a result of which
(a) Asta Funding ceases to own and control all of the economic and voting rights associated with
all of the outstanding capital Stock of the Borrowers, except Cliffs, (b) Palisades ceases to own
and control all of the economic and voting rights associated with all of the outstanding capital
Stock of Cliffs, (c) during any period of twelve consecutive calendar months, individuals who at
the beginning of such period constituted the board of directors of Asta Funding (together with any
new directors whose election by the board of directors of Asta Funding or whose nomination for
election by the Stockholders of Asta Funding was approved by a vote of the majority of the
directors then still in office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any reason other than
death or disability to constitute a majority of the directors then in office or (d) Gary Stern
shall no longer be acting as the president, chief executive officer or manager of the Borrowers
having substantially the same duties and responsibilities as on the Closing Date, unless the
Borrowers shall have within a reasonable period of time not to exceed 180 days obtained a successor
of at least comparable background, experience and ability who is reasonably acceptable to the
Lender.

 

A-3

 

For the purposes of this definition, “control” of a Person shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or otherwise.

“Charges” means all federal, state, county, city, municipal, local, foreign or other
governmental taxes (including taxes owed to the PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating to (a) the Collateral, (b) the
Obligations, (c) the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party’s ownership or use of any properties or other assets, or (e) any other aspect of any
Credit Party’s business.

“Chattel Paper” means any “chattel paper,” as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any Credit Party.

“Cliffs” means Cliffs Portfolio Acquisition I, LLC.

“Closing Checklist” means the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in connection with the
Agreement, the other Loan Documents and the transactions contemplated thereunder, substantially in
the form attached hereto as Annex D.

“Closing Date” means December 14, 2009.

“Code” means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that to the extent that the Code
is used to define any term herein or in any Loan Document and such term is defined differently in
different Articles or Divisions of the Code, the definition of such term contained in Articles or
Divisions 1 and 9 shall govern; provided, further, that in the event that, by
reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Lender’s or Lender’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the
term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions.

“Collateral” means the property covered by the Security Agreement and the other
Collateral Documents and any other property, real or personal, tangible or intangible, now existing
or hereafter acquired, that may at any time be or become subject to a security interest or Lien in
favor of Lender, to secure the Obligations.

“Collateral Documents” means the Security Agreement, the Pledge Agreements, the
Guaranties, and all similar agreements entered into guaranteeing payment of, or granting a Lien
upon property as security for payment of, the Obligations.

“Collateral Reports” means the reports with respect to the Collateral referred to in
Annex F.

 

A-4

 

“Collection Account” means that certain account of Lender in the name of Lender at
Lender in New York, New York, or such other account as may be specified in writing by Lender as the
“Collection Account”.

“Collection Report” means a report in detail satisfactory to Lender as to all
Collections received during each month and the Account or Consumer Loan to which it applies, and
including the computer discs containing all of the information contained therein.

“Collections” mean all Payments actually received and collected by or on behalf of the
Borrowers, any Credit Party or any Servicing Agent with respect to any Consumer Loan, which is
included in the Collateral and is remitted to the Lender as provided in this Agreement.

“Collections Multiple Value” means the Average Collections for an Eligible Existing
Portfolio, multiplied by three (3).

“Commitment” means $6,000,000.

“Commitment Termination Date” means the earliest of (a) December 31, 2010, (b) the
date of termination of Lender’s obligations to make Advances or permit the existing Revolving Loan
to remain outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrowers of the Revolving Loan, and the permanent reduction of the
Commitment to zero dollars ($0).

“Compliance Certificate” has the meaning ascribed to it in Annex E.

“Consumer Loans” means all Credit Card Receivables, Auto Loans, Telecom Receivables
and any other type of consumer loan acceptable to Lender now or hereafter owned or held by the
Borrowers.

“Contracts” means all “contracts,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, in any event, including all contracts, undertakings, or
agreements (other than rights evidenced by Chattel Paper, Documents or Instruments) in or under
which any Credit Party may now or hereafter have any right, title or interest, including any
agreement relating to the terms of payment or the terms of performance of any Account.

“Copyright License” means any and all rights now owned or hereafter acquired by any
Credit Party under any written agreement granting any right to use any Copyright or Copyright
registration.

“Copyrights” means all of the following now owned or hereafter adopted or acquired by
any Credit Party: (a) all copyrights (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including all registrations,
recordings and applications in the United States Copyright Office or in any similar office or
agency of the United States, any state or territory thereof, or any other country or any political
subdivision thereof, and (b) all reissues, extensions or renewals thereof.

“Credit Card Receivables” means each of the performing and non-performing credit card
receivables and/or loans presently and hereafter owned by Borrowers, as fully set forth in a

 

A-5

 

computer disc delivered to Lender, which shall be in a format acceptable to the Lender,
whether such is deemed to consist of accounts or general intangibles under the Code, together with
any chattel paper, instrument, document, general intangible, guarantee and other collateral
security held by Borrowers with respect to such receivables and/or loans, together with the
proceeds thereof.

“Credit Parties” means each Guarantor, each Borrower, and each of their respective
Subsidiaries, except Non-Credit Party Affiliates.

“Default” means any event that, with the passage of time or notice or both, would,
unless cured or waived, become an Event of Default.

“Default Rate” has the meaning ascribed to it in Section 1.3(d).

“Deposit Accounts” means all “deposit accounts” as such term is defined in the Code,
now or hereafter held in the name of any Credit Party.

“Disaster Recovery Plan” means the report entitled Information Technology dated July
15, 2009 prepared for Asta by Sunguard Availability Services, in the form delivered to Lender prior
to the date of this Agreement, and modifications thereto as may be implemented by Borrowers in the
ordinary course of business which, if material, shall be provided to Lender in writing promptly
upon implementation.

“Disclosure Document” means the document dated as of the date hereof by Borrowers and
all other Credit Parties signatory to the Agreement with respect to certain disclosures made to
Lender in the Agreement, as may be modified from time to time as provided in the Agreement. All
disclosures, representations and warranties contained in the Disclosure Document shall be
acceptable to Lender.

“Documents” means all “documents,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located.

“Dollars” or “$” means lawful currency of the United States of America.

“Effective Date” means the date on which the Agreement shall become effective, which
shall be the date on which (i) Borrowers and Guarantors, along with the Lender shall have executed
and delivered the Agreement and the other Loan Documents, and (ii) all of the conditions precedent
to the effectiveness of the Agreement, including, without limitation, the conditions precedent set
forth in Section 2.

“Environmental Laws” means all applicable federal, state, local and foreign laws,
statutes, ordinances, codes, rules, and regulations in effect, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or administrative order,
consent decree, order or judgment, imposing liability or standards of conduct for or relating to
the regulation and protection of human health, safety, the environment and natural resources
(including ambient air, surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.)

 

A-6

 

(“CERCLA”); the Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C. §§
5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.);
the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.); the Toxic Substance Control Act (15
U.S.C. §§ 2601 et seq.); the Clean Air Act (42 U.S.C. §§ 7401 et seq.); the Federal Water Pollution
Control Act (33 U.S.C. §§ 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C. §§ 651
et seq.); and the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), and any and all
regulations promulgated thereunder, and all analogous state, local and foreign counterparts or
equivalents and any transfer of ownership notification or approval statutes.

“Environmental Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs, investigation and feasibility
study costs, capital costs, operation and maintenance costs, losses, damages, punitive damages,
property damages, natural resource damages, consequential damages, treble damages, costs and
expenses (including all reasonable fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of or related to any
claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute or common law,
including any arising under or related to any Environmental Laws, Environmental Permits, or in
connection with any Release or threatened Release or presence of a Hazardous Material whether on,
at, in, under, from or about or in the vicinity of any real or personal property.

“Environmental Permits” means all permits, licenses, authorizations, certificates,
approvals or registrations required by any Governmental Authority under any Environmental Laws.

“Equipment” means all “equipment,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located and, in any event, including all such
Credit Party’s machinery and equipment, including processing equipment, conveyors, machine tools,
data processing and computer equipment, including embedded software and peripheral equipment and
all engineering, processing and manufacturing equipment, office machinery, furniture, materials
handling equipment, tools, attachments, accessories, automotive equipment, trailers, trucks,
forklifts, molds, dies, stamps, motor vehicles, rolling stock and other equipment of every kind and
nature, trade fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all substitutes for
any of the foregoing, fuel therefor, and all manuals, drawings, instructions, warranties and rights
with respect thereto, and all products and proceeds thereof and condemnation awards and insurance
proceeds with respect thereto.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time, and any regulations promulgated thereunder.

“ERISA Affiliate” means, with respect to any Credit Party, any trade or business
(whether or not incorporated) that, together with such Credit Party, are treated as a single
employer within the meaning of Sections 414(b), (c), (m) or (o) of the IRC.

“ERISA Event” means, with respect to any Credit Party or any ERISA Affiliate, (a) any
event described in Section 4043(c) of ERISA with respect to a Title IV Plan; (b) the withdrawal

 

A-7

 

of any Credit Party or ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Credit Party or any ERISA Affiliate from any
Multiemployer Plan; (d) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a plan amendment as a termination under Section 4041 of ERISA; (e) the institution of
proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any
Credit Party or ERISA Affiliate to make when due required contributions to a Multiemployer Plan or
Title IV Plan unless such failure is cured within 30 days; (g) any other event or condition that
could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for
the imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the termination of a
Multiemployer Plan under Section 4041A of ERISA or the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or 4245 of ERISA; or (i) the revocation or threatened
revocation of a Qualified Plan’s qualification or tax exempt status; or (j) the termination of a
Plan described in Section 4064 of ERISA; but in each such case, only if and to the extent it could
be reasonably be expected to result (directly or indirectly, individually or in the aggregate) in a
Material Adverse Effect.

“ESOP” means a Plan that is intended to satisfy the requirements of Section 4975(e)(7)
of the IRC.

“Event of Default” has the meaning ascribed to it in Section 8.1.

“Existing Debt” has the meaning ascribed to it in the recitals to the Agreement.

“Existing Portfolio” shall mean a Portfolio that a Borrower has owned for more than
thirty-three (33) months as to which such Borrower has all right, title and interest in the
Accounts comprising the Portfolio.

“Fair Labor Standards Act” means the Fair Labor Standards Act, 29 U.S.C. §§ 201 et
seq.

“Federal Funds Rate” means, for any day, a floating rate equal to the weighted average
of the rates on overnight Federal funds transactions among members of the Federal Reserve System,
as determined by Lender in its sole discretion, which determination shall be final, binding and
conclusive (absent manifest error).

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System.

“Fees” means any and all fees payable to Lender pursuant to the Agreement or any of
the other Loan Documents.

“Financial Statements” means the consolidated (together with consolidating worksheets)
income statements, statements of cash flows and balance sheets of Asta Funding delivered in
accordance with Section 3.4 and Annex E.

“Fiscal Month” means any of the monthly accounting periods of Borrowers.

 

A-8

 

“Fiscal Quarter” means any of the quarterly accounting periods of Borrowers, ending on
March 31, June 30, September 30 and December 31 of each year.

“Fiscal Year” means any of the annual accounting periods of Borrowers ending on
September 30 of each year, subject to any change in the Fiscal Year permitted under the Agreement.

“Fixtures” means all “fixtures” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party.

“GAAP” means generally accepted accounting principles in the United States of America
consistently applied.

“General Intangibles” means all “general intangibles,” as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including all right, title and interest
that such Credit Party may now or hereafter have in or under any Contract, all payment intangibles,
customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor and
reissues, extensions or renewals thereof, rights in Intellectual Property, interests in
partnerships, joint ventures and other business associations, licenses, permits, copyrights, trade
secrets, proprietary or confidential information, inventions (whether or not patented or
patentable), technical information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any Trademark or Trademark License), all rights and claims
in or under insurance policies (including insurance for fire, damage, loss and casualty, whether
covering personal property, real property, tangible rights or intangible rights, all liability,
life, key man and business interruption insurance, and all unearned premiums), uncertificated
securities, choses in action, deposit, checking and other bank accounts, rights to receive tax
refunds and other payments, rights to receive dividends, distributions, cash, Instruments and other
property in respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices and other papers,
including without limitation all tapes, cards, computer runs and other papers and documents in the
possession or under the control of such Credit Party or any computer bureau or service company from
time to time acting for such Credit Party.

“Goods” means all “goods” as defined in the Code, now owned or hereafter acquired by
any Credit Party, wherever located, including embedded software to the extent included in “goods”
as defined in the Code, manufactured homes, standing timber that is cut and removed for sale and
unborn young of animals.

“Governmental Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

“Guaranteed Indebtedness” means as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease, dividend, or other
obligation (“primary obligation”) of any other Person (the “primary obligor”) in any manner,
including any obligation or arrangement of such Person to (a) purchase or repurchase

 

A-9

 

any such primary obligation, (b) advance or supply funds (i) for the purchase or payment of
any such primary obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet condition of the
primary obligor, (c) purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, (d) protect the beneficiary of such arrangement from loss
(other than product warranties given in the ordinary course of business) or (e) indemnify the owner
of such primary obligation against loss in respect thereof. The amount of any Guaranteed
Indebtedness at any time shall be deemed to be an amount equal to the lesser at such time of
(x) the stated or determinable amount of the primary obligation in respect of which such Guaranteed
Indebtedness is incurred and (y) the maximum stated or determinable amount for which such Person
may be liable pursuant to the terms of the instrument embodying such Guaranteed Indebtedness, or,
if not stated or determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.

“Guaranty” means the guaranty of even date herewith executed by Asta Funding and each
Subsidiary of a Borrower in favor of Lender.

“Guaranties” means the Guaranty and any other guaranty executed by any Guarantor in
favor of Lender in respect of the Obligations.

“Guarantors” means each Guarantor and Additional Guarantor described in the preamble
to this Amendment, each Subsidiary of any Borrower that is not a Borrower, and each other Person,
if any, that executes a guaranty or other similar agreement in favor of Lender in connection with
the transactions contemplated by the Amendment and the other Loan Documents.

“Guarantor Payment” has the meaning ascribed to it in Section 12.7(a).

“Hazardous Material” means any substance, material or waste that is regulated by, or
forms the basis of liability now or hereafter under, any Environmental Laws, including any material
or substance that is (a) defined as a “solid waste,” “hazardous waste,” “hazardous material,”
“hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” “pollutant,”
“contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or other similar term or
phrase under any Environmental Laws, or (b) petroleum or any fraction or by-product thereof,
asbestos, polychlorinated biphenyls (PCB’s), or any radioactive substance.

“Inactive Subsidiaries” means AstaFunding.Com, LLC and Asta Commercial, LLC.

“Indebtedness” means, with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase price of property
payment for which is deferred 6 months or more, but excluding obligations to trade creditors
incurred in the ordinary course of business that are unsecured and not overdue by more than 6
months unless being contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers’ acceptances and surety bonds, whether or not matured, (c)
all obligations evidenced by notes, bonds, debentures or similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention agreement with respect to

 

A-10

 

property acquired by such Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale of such property),
(e) all Capital Lease Obligations and the present value (discounted at the Reference Rate as in
effect on the Closing Date) of future rental payments under all synthetic leases, (f) all
obligations of such Person under commodity purchase or option agreements or other commodity price
hedging arrangements, in each case whether contingent or matured, (g) all obligations of such
Person under any foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter the risks of that
Person arising from fluctuations in currency values or interest rates, in each case whether
contingent or matured, (h) all Indebtedness referred to above secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien
upon or in property or other assets (including accounts and contract rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of such Indebtedness, and
(i) the Obligations.

“Indemnified Liabilities” has the meaning ascribed to it in Section 1.10.

“Indemnified Person” has the meaning ascribed to in Section 1.10.

“Instruments” means all “instruments,” as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party, wherever located, and, in any event, including all
certificated securities, all certificates of deposit, and all promissory notes and other evidences
of indebtedness, other than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.

“Intellectual Property” means any and all Licenses, Patents, Copyrights, Trademarks,
and the goodwill associated with such Trademarks.

“Intercompany Notes” has the meaning ascribed to it in Section 6.3.

“Intercompany Obligations” has the meaning ascribed to it in Section 12.9(a).

“Interest Payment Date” means the first Business Day of each month; provided,
that, in addition to the foregoing, each of (x) the date upon which all of the Commitments have
been terminated and the Revolving Loans have been paid in full and (y) the Commitment Termination
Date shall be deemed to be an “Interest Payment Date” with respect to any interest that has then
accrued under the Agreement.

“Inventory” means all “inventory,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, and in any event including inventory,
merchandise, goods and other personal property that are held by or on behalf of any Credit Party
for sale or lease or are furnished or are to be furnished under a contract of service, or that
constitute raw materials, work in process, finished goods, returned goods, or materials or supplies
of any kind, nature or description used or consumed or to be used or consumed in such Credit
Party’s business or in the processing, production, packaging, promotion, delivery or shipping of
the same, including all supplies and embedded software.

 

A-11

 

“Investment Property” means all “investment property” as such term is defined in the
Code now owned or hereafter acquired by any Credit Party, wherever located, including (i) all
securities, whether certificated or uncertificated, including stocks, bonds, interests in limited
liability companies, partnership interests, treasuries, certificates of deposit, and mutual fund
shares; (ii) all securities entitlements of any Credit Party, including the rights of any Credit
Party to any securities account and the financial assets held by a securities intermediary in such
securities account and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party; (iv) all commodity
contracts of any Credit Party; and (v) all commodity accounts held by any Credit Party.

“IRC” means the Internal Revenue Code of 1986 and all regulations promulgated
thereunder.

“IRS” means the Internal Revenue Service.

“Lender” means BLUSA, and, if Lender shall decide to assign all or any portion of the
Obligations, such term shall include any assignee of Lender.

“License” means any Copyright License, Patent License, Trademark License or other
license of rights or interests now held or hereafter acquired by any Credit Party.

“Lien” means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, lien, charge, claim, security interest, easement or encumbrance, or preference,
priority or other security agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Code or comparable law of any
jurisdiction).

“Litigation” has the meaning ascribed to it in Section 3.13.

“Loan” means any Revolving Loan.

“Loan Account” has the meaning ascribed to it in Section 1.6.

“Loan Documents” means the Agreement, the Notes, the Collateral Documents and all
other agreements, instruments, documents and certificates identified in the Closing Checklist
executed and delivered to, or in favor of, Lender (including, without limitation, the Disclosure
Document and all exhibits attached thereto or referred to therein) and including all other pledges,
powers of attorney, consents, assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or any employee of any
Credit Party, and delivered to Lender in connection with the Agreement or the transactions
contemplated thereby. Any reference in the Agreement or any other Loan Document to a Loan Document
shall include all appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or such Loan Document
as the same may be in effect at any and all times such reference becomes operative.

 

A-12

 

“Margin Stock” has the meaning ascribed to in Section 3.10.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, prospects or financial or other condition of the Credit Parties considered as a whole
(but not on the Credit Parties’ industry generally, except to the extent of a direct effect on the
Credit Parties as provided above), (b) Borrowers’ ability to pay the Revolving Loan or any of the
other Obligations in accordance with the terms of the Agreement, (c) the Collateral or Lender’s
Liens, on behalf of Lender, on the Collateral or the priority of such Liens, or (d) Lender’s or
Lender’s rights and remedies under the Agreement and the other Loan Documents.

“Maximum Lawful Rate” has the meaning ascribed to it in Section 1.3(f).

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA, and to which any Credit Party or ERISA Affiliate is making, is obligated to make or has or
could reasonably be expected to have a direct or indirect liability under Title IV of ERISA or
under Section 412 of the IRC.

“Net Sales Proceeds” means the total gross sales proceeds generated from the
disposition of Accounts or a Portfolio or any portion thereof, less (A) commissions and other
reasonable and customary transaction costs, fees and expenses properly attributable to such
transaction and payable by such Credit Party in connection therewith (in each case, paid to non
Affiliates), and (B) sales, transfer, and similar taxes payable by such Credit Party in connection
therewith.

“Net Worth” means, with respect to any Person as of any date of determination, the
book value of the assets of such Person, minus the sum of (a) reserves applicable thereto, and (b)
all of such Person’s liabilities on a consolidated basis (including accrued and deferred income
taxes), all as determined in accordance with GAAP.

“New Line of Credit” has the meaning ascribed to it in the recitals to the Agreement.

“New Portfolio” shall mean a Portfolio that any Borrower has owned for thirty-three
(33) months or less as to which such Borrower has all right, title and interest in the Accounts
comprising the Portfolio.

“Non-Credit Party Affiliate” means an entity that is wholly owned by Asta Funding or
another Credit Party that is not required by the Lender to execute and deliver an Affiliate
Guaranty, an Affiliate Security Agreement and an Affiliate Confirmation pursuant to Section
6.4(b) of this Agreement and that may incur debt on a non-recourse basis for the purposes of
acquiring portfolios subject to the following conditions:

(a) The Borrower Representative has given the Lender written notification of the formation of
a Non-Credit Party Affiliate prior to the incurrence of non-recourse financing.

(b) Lender shall have declined to exercise its right of first refusal on financing any
portfolios being acquired by a Non-Credit Party Affiliate.

(c) The Non-Credit Party Affiliate is not a Borrower or a Guarantor.

 

A-13

 

(d) No Borrower or Guarantor is obligated with respect to such non-recourse financing in a
guarantee, indemnity, put agreement, participation agreement or other agreement, except for
servicing obligations and customary representations and warranties (and the indemnities relating to
such representations and warranties or servicing obligations) by Asta Funding or another Borrower
or Guarantor to the non-recourse lender.

“Notes” means, collectively, the Revolving Notes.

“Notice of Borrowing” has the meaning ascribed to it in Section 1.1(a).

“Obligations” means all loans, advances, debts, liabilities and obligations for the
performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such
performance is then required or contingent, or such amounts are liquidated or determinable) owing
by any Credit Party to Lender, and all covenants and duties regarding such amounts, of any kind or
nature, present or future, whether or not evidenced by any note, agreement or other instrument,
arising under the Agreement or any of the other Loan Documents and under all interest rate caps,
swaps or collar agreements, or similar agreements or arrangements to provide protection against
fluctuations in interest rates. This term includes all principal, interest (including all interest
that accrues after the commencement of any case or proceeding by or against any Credit Party in
bankruptcy, whether or not allowed in such case or proceeding), Fees, Charges, expenses, attorneys’
fees and any other sum chargeable to any Credit Party under the Agreement or any of the other Loan
Documents.

“PAL XVI” means Palisades Acquisition XVI, LLC.

“Palisades” means Palisades Collection, L.L.C.

“Payment Intangibles” shall have the meaning given such term in the UCC.

“Payments” means the payments of whatsoever nature made by each Account Debtor with
respect to the Accounts relating to such Account Debtor and/or the payments made by any obligor
with respect to any Account.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means a Plan described in Section 3(2) of ERISA.

“Permitted Acquisition” has the meaning ascribed to it in Section 6.1.

“Permitted Encumbrances” means the following encumbrances: (a) Liens for taxes or
assessments or other governmental Charges not yet due and payable or which are being contested in
accordance with Section 5.2(b); (b) pledges or deposits of money securing statutory
obligations under workmen’s compensation, unemployment insurance, social security or public
liability laws or similar legislation (excluding Liens under ERISA); (c) pledges or deposits of
money securing bids, tenders, contracts (other than contracts for the payment of money) or leases
to which any Credit Party is a party as lessee made in the ordinary course of business; (d)
inchoate and unperfected workers’, mechanics’, or similar liens arising in the ordinary course of
business, so long as such Liens attach only to Equipment, Fixtures and/or Real Estate;

 

A-14

 

(e) carriers’, warehousemen’s, suppliers’ or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding aggregate amount not in
excess of $100,000 at any time, so long as such Liens attach only to Inventory; (f) inchoate and
unperfected bailees’ and landlord liens with respect to locations in which a bailee or landlord
waiver is not required, and which arise in the ordinary course of business, so long as such Liens
attach only to assets located on the applicable Real Estate; (g) deposits securing, or in lieu of,
surety, appeal or customs bonds in proceedings to which any Credit Party is a party; (h) any
attachment or judgment lien not constituting an Event of Default under Section 8.1(j); (i)
with respect to any Real Estate, the permitted exceptions set forth on an Exhibit of any mortgage
granted to Lender applicable to such Real Estate, and zoning restrictions, easements, licenses, or
other restrictions on the use of any Real Estate or other minor irregularities in title (including
leasehold title) thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (j) presently existing or hereafter created Liens in favor of
Lender; (k) Liens expressly permitted under Section 6.7 (other than subsection (a)
thereto); (l) a Lien in favor of BMO Capital Markets Corp., as collateral agent, granted by the
Credit Parties to secure the Guaranteed Indebtedness of the Credit Parties to the extent permitted
under Section 6.6(c), provided, that such Lien is at all times subordinate to Lien
of the Lender pursuant to an intercreditor agreement (and any other applicable documents, from time
to time) satisfactory, in form and substance, to the Lender and (m) a Lien in favor of Asta Group,
Incorporated, as granted by the Credit Parties, to secure payment on that certain promissory note,
dated April 29, 2008 (together with such other promissory notes as supersede such promissory note,
provide that such successor notes, in the aggregate, do not exceed the original principal amount of
such promissory note, the “Group Promissory Note”), executed by Asta Funding, in favor of
Asta Group, Incorporated, in the original principal amount of $8,226,278 and a certain
indemnification agreement (the “Group Indemnification Agreement”) pursuant to which one or
more of the Credit Parties agrees to indemnify Asta Group, Incorporated (on terms reasonably
satisfactory to the Agent) for any and all losses associated with a pledge of all or a portion of
all of the Group Promissory Note to BMO Capital Markets Corp., as collateral agent in connection
with the Receivables Financing Agreement, provided, that such Lien is at all times
subordinate to Lien of the Lender pursuant to an intercreditor agreement (and any other applicable
documents, from time to time) satisfactory, in form and substance, to the Lender.

“Permitted Convertible Debt” means any secured Subordinated Debt of any Credit Party
which is convertible to Stock of such Credit Party and the terms and conditions of which
(including, without limitation, with respect to intercreditor arrangements) are reasonably
acceptable to Lender.

“Person” means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability company, institution,
public benefit corporation, other entity or government (whether federal, state, county, city,
municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or
department thereof).

“Plan” means, at any time, an “employee benefit plan”, as defined in Section 3(3) of
ERISA (other than a Multiemployer Plan), that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to or has or could reasonably be expected to have
a direct or indirect liability under Title IV of ERISA or under Section 412 of the IRC.

 

A-15

 

“Pledge Agreement” means the Pledge Agreement of even date herewith executed by each
Credit Party in favor of Lender, pledging all of the Stock of the Subsidiaries of each Credit
Party.

“Pledge Agreements” means the Pledge Agreement and any pledge agreements entered into
after the Closing Date by any Credit Party (as required by the Agreement or any other Loan
Document).

“Portfolio” means each group or pool of Consumer Loans acquired by any of the
Borrowers from a single Seller (or a single Seller and its affiliates) in a single purchase
transaction (including a forward flow transaction), which Consumer Loans are recorded and
administered in the Books and Records of the Borrower acquiring same as a separate group or pool of
Consumer Loans.

“Portfolio Bid” means the specific amount or the maximum of a range of amounts, which
are to be bid to acquire a Portfolio.

“Portfolio Loans” means the Consumer Loans, which comprise each Portfolio, as more
specifically detailed in the applicable Portfolio Proposal.

“Portfolio Proposal” means a written proposal presented by Borrowers or any other
Credit Party with respect to a Portfolio that such party intends to submit to a Seller for the
purchase of such Portfolio, which shall set forth in sufficient detail the (i) Portfolio Bid and
the terms of payment thereof, (ii) nature of the Consumer Loans comprising the Portfolio, (iii) a
computer disc or written report containing a detailed description of the Consumer Loans, and (iv)
name of the Seller.

“Prior Lender Loan Agreement” means the Fourth Amended and Restated Loan Agreement,
dated as of July 11, 2006, by and among Borrowers, certain of their affiliates, Israel Discount
Bank of New York, as administrative agent, collateral agent and co-lead arranger, Merrill Lynch
Capital, a division of Merrill Lynch Business Financial Services Inc., as co-lead arranger and as
co-administrative agent, and the lenders signatory thereto from time to time, as amended and
supplemented.

“Prior Lender Obligations” means the obligations under the Prior Lender Loan Agreement
and the agreements, documents and instruments related thereto.

“Proceeds” means “proceeds,” as such term is defined in the Code, including (a) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to any Credit Party from
time to time with respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral
by any Governmental Authority (or any Person acting under color of governmental authority), (c) any
claim of any Credit Party against third parties (i) for past, present or future infringement of any
Patent or Patent License, or (ii) for past, present or future infringement or dilution of any
Copyright, Copyright License, Trademark or Trademark License, or for injury to the goodwill
associated with any Trademark or Trademark License, (d) any recoveries by any Credit Party against
third parties with respect to any litigation or dispute concerning any of the

 

A-16

 

Collateral including claims arising out of the loss or nonconformity of, interference with the
use of, defects in, or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including dividends, interest,
distributions and Instruments with respect to Investment Property and pledged Stock, and (f) any
and all other amounts, rights to payment or other property acquired upon the sale, lease, license,
exchange or other disposition of Collateral and all rights arising out of Collateral.

“Qualified Plan” means a Pension Plan that is intended to be tax-qualified under
Section 401(a) of the IRC.

“Qualified Assignee” means (a) any Lender, any Affiliate of any Lender and, with
respect to any Lender that is an investment fund that invests in commercial loans, any other
investment fund that invests in commercial loans and that is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor, and (b) any
commercial bank, savings and loan association or savings bank or any other entity which is an
“accredited investor” (as defined in Regulation D under the Securities Act of 1933) which extends
credit or buys loans as one of its businesses, including insurance companies, mutual funds, lease
financing companies and commercial finance companies, in each case, which has a rating of BBB or
higher from S&P and a rating of Baa2 or higher from Moody’s at the date that it becomes a Lender
and which, through its applicable lending office, is capable of lending to Borrowers without the
imposition of any withholding or similar taxes.

“Real Estate” has the meaning ascribed to it in Section 3.6.

“Reference Rate” means, for any day, a floating rate equal to the rate established
from time to time by BLUSA its “Reference Rate”. Each change in any interest rate provided for in
the Agreement based upon the Reference Rate shall take effect at the time of such change in the
Reference Rate.

“Reference Rate Loan” means a Revolving Loan or portion thereof bearing interest by
reference to the Reference Rate.

“Related Transactions” means the initial borrowing under the Revolving Loan on the
Closing Date and the payment of all fees, costs and expenses associated with all of the foregoing
and the execution and delivery of all of the Related Transactions Documents.

“Related Transactions Documents” means the Loan Documents and all other agreements or
instruments executed in connection with the Related Transactions.

“Release” means any release, threatened release, spill, emission, leaking, pumping,
pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Material in the indoor or outdoor environment, including the
movement of Hazardous Material through or in the air, soil, surface water, ground water or
property.

“Restricted Payment” means, with respect to any Credit Party (a) any payment on
account of the purchase, redemption, defeasance, sinking fund or other retirement of such Credit
Party’s Stock or any other payment or distribution made in respect thereof, either directly or

 

A-17

 

indirectly; (b) any payment or prepayment of principal of, premium, if any, or interest, fees
or other charges on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to, any Subordinated
Debt, except as otherwise expressly provided in the Subordination Agreement to which such
Subordinated Debt is subject; (c) any payment made to redeem, purchase, repurchase or retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to acquire Stock of such
Credit Party now or hereafter outstanding; (d) any payment of a claim for the rescission of the
purchase or sale of, or for material damages arising from the purchase or sale of, any shares of
such Credit Party’s Stock or of a claim for reimbursement, indemnification or contribution arising
out of or related to any such claim for damages or rescission; (e) any payment, loan, contribution,
or other transfer of funds or other property to any Stockholder of such Credit Party other than
payment of compensation in the ordinary course of business and in accordance with past practices,
to Stockholders who are employees or consultants of such Person; and (f) any payment of management
fees (or other fees of a similar nature) by such Credit Party to any Stockholder of such Credit
Party or its Affiliates.

“Retiree Welfare Plan” means, at any time, a Welfare Plan that provides for continuing
coverage or benefits for any participant or any beneficiary of a participant after such
participant’s termination of employment, other than continuation coverage provided pursuant to
Section 4980B of the IRC or other applicable law or coverage through the last day of the month of a
participant’s termination of employment.

“Revolving Loan” means, at any time, the aggregate amount of Advances outstanding to
Borrower.

“Revolving Note” has the meaning ascribed to it in Section 1.1(a)(iv).

“Security Agreement” means one or more Security Agreements of even date herewith
entered into by and among Lender and each Credit Party that is a signatory thereto.

“Seller” means the party (or parties) which has agreed to sell Portfolio Loans to a
Credit Party.

“Senior Executive” means each of Gary Stern and Robert Michel.

“Senior Obligations” has the meaning ascribed to it in Section 12.9(a).

“Servicing Agent” shall mean any third-party engaged or utilized by any Credit Party
for the purpose of administrating and/or collecting Payments made by an Account Debtor with respect
to Accounts.

“Servicing Threshold” shall mean an amount equal to ten percent (10%) or more of
Collections, Proceeds and Payments (net of any collection costs and other fees permitted to be
deducted therefrom by the express terms of the servicing agreement that corresponds to such
Collections, Proceeds and Payments), taken as a whole for the Credit Parties, reported by such
Credit Parties during the Fiscal Quarter prior to the date of determination.

 

A-18

 

“Software” means all “software” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, other than software embedded in any category of Goods,
including all computer programs and all supporting information provided in connection with a
transaction related to any program.

“Solvent” means, with respect to any Person on a particular date, that on such date
(a) the fair value of the property of such Person is greater than the total amount of liabilities,
including contingent liabilities, of such Person; (b) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured; (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay
as such debts and liabilities mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which such Person’s
property would constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the
amount that, in light of all the facts and circumstances existing at the time, represents the
amount that can be reasonably be expected to become an actual or matured liability.

“Stock” means all shares, options, warrants, general or limited partnership interests,
membership interests or other equivalents (regardless of how designated) of or in a corporation,
partnership, limited liability company or equivalent entity whether voting or nonvoting, including
common stock, preferred stock or any other “equity security” (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934).

“Stockholder” means, with respect to any Person, each holder of Stock of such Person.

“Subordinated Debt” means any Indebtedness of any Credit Party subordinated to the
Obligations in a manner and form satisfactory to Lender in their sole discretion, as to right and
time of payment and as to any other rights and remedies thereunder, pursuant to a Subordination
Agreement or otherwise.

“Subordination Agreement” means any agreement between a Credit Party and the holder or
holders of such Credit Party’s Subordinated Debt, acceptable to Lender in their sole discretion,
pursuant to which such Subordinated Debt is expressly subordinated to the Obligations as to right
and time of payment and as to any other rights and remedies thereunder.

“Subsidiary” means, with respect to any Person, (a) any corporation of which an
aggregate of more than 50% of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, Stock
of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person or one or more Subsidiaries of such Person, or with respect to which
any such Person has the right to vote or designate the vote of more than 50% of such Stock whether
by proxy, agreement, operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital contribution)

 

A-19

 

of more than 50% or of which any such Person is a general partner or may exercise the powers
of a general partner. Unless the context otherwise requires, each reference to a Subsidiary shall
be a reference to a Subsidiary of a Borrower.

“Supporting Obligations” means all “supporting obligations” as such term is defined in
the Code, including letters of credit and guaranties issued in support of Accounts, Chattel Paper,
Documents, General Intangibles, Instruments, or Investment Property.

“Tangible Net Worth” means, with respect to any Person at any date, the Net Worth of
such Person at such date, excluding, however, from the determination of the total assets at such
date, (a) all goodwill, capitalized organizational expenses, capitalized research and development
expenses, trademarks, trade names, copyrights, patents, patent applications, licenses and rights in
any thereof, and other intangible items (including, without limitation, Non-Recourse Investments),
(b) all unamortized debt discount and expense, (c) treasury Stock, and (d) any write-up in the book
value of any asset resulting from a revaluation thereof.

“Taxes” means taxes, levies, imposts, deductions, Charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on or measured by the net income of
Lender or a Lender by the jurisdictions under the laws of which Lender are organized or conduct
business or maintain a permanent establishment or any political subdivision thereof.

“Tax Returns” has the meaning ascribed to it in Section 3.11.

“Telecom Receivables” means each of the performing and non-performing receivables
presently and hereafter owned by Borrowers, which have been purchased from telecommunication
service providers.

“Termination Date” means the date on which (a) the Revolving Loan has been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and the other Loan
Documents have been completely discharged and (c) none of Borrowers shall have any further right to
borrow any monies under the Agreement.

“Title IV Plan” means a Pension Plan (other than a Multiemployer Plan), that is
covered by Title IV of ERISA, and that any Credit Party or ERISA Affiliate maintains, contributes
to or has an obligation to contribute to on behalf of participants who are or were employed by any
of them.

“Total Liabilities” means, with respect to any Person as of any date of determination,
the total liabilities of such Person as determined as determined in accordance with GAAP.

“Trademark License” means rights under any written agreement now owned or hereafter
acquired by any Credit Party granting any right to use any Trademark.

“Trademarks” means all of the following now owned or hereafter existing or adopted or
acquired by any Credit Party: (a) all trademarks, trade names, corporate names, business names,
service marks, logos, all registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any state or territory

 

A-20

 

thereof, or any other country or any political subdivision thereof; (b) all reissues,
extensions or renewals thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.

“Transaction” has the meaning ascribed to it in Section 11.7.

“Unfunded Pension Liability” means, at any time, the aggregate amount, if any, of the
sum of (a) the amount by which the present value of all accrued benefits under each Title IV Plan
exceeds the fair market value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, all determined as of the most recent valuation date for each
such Title IV Plan using the actuarial assumptions for funding purposes in effect under such Title
IV Plan, and (b) for a period of 5 years following a transaction which might reasonably be expected
to be covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that could be
avoided by any Credit Party or any ERISA Affiliate as a result of such transaction.

“Welfare Plan” means a Plan described in Section 3(i) of ERISA.

All other undefined terms contained in any of the Loan Documents shall, unless the context
indicates otherwise, have the meanings provided for by the Code to the extent the same are used
or defined therein; in the event that any term is defined differently in different Articles or
Divisions of the Code, the definition contained in Articles or Divisions 1 and 9 shall control.
Unless otherwise specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in the Agreement.
The words “herein,” “hereof” and “hereunder” and other words of similar import refer to the
Agreement as a whole, including all Annexes, Exhibits and Schedules, as the same may from time
to time be amended, restated, modified or supplemented, and not to any particular section,
subsection or clause contained in the Agreement or any such Annex, Exhibit or Schedule.

Wherever from the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and the plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, feminine and neuter genders. The words
“including”, “includes” and “include” shall be deemed to be followed by the words “without
limitation”; the word “or” is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall include any amendments of
the same and any successor statutes and regulations. Reference to any agreement (including
without limitation the Loan Documents), document or instrument means the agreement, document or
instrument as amended or supplemented, subject to any restrictions on amendment contained
therein (and, if applicable, in accordance with the terms of this Agreement and the other Loan
Documents). Whenever any provision in any Loan Document refers to the knowledge (or an
analogous phrase) of any Credit Party, such words are intended to signify that such Credit Party
has actual knowledge or awareness of a particular fact or circumstance or that such Credit
Party, if it had exercised reasonable diligence, would have known or been aware of such fact or
circumstance.

 

A-21

 

ANNEX C (SECTION 1.8)

TO

LOAN AGREEMENT

CASH MANAGEMENT SYSTEM

Reserved.

 

 

 

ANNEX D (SECTION 2.1(A))

TO

LOAN AGREEMENT

CLOSING CHECKLIST

In addition to, and not in limitation of, the conditions described in Section 2.1,
pursuant to Section 2.1(a), the following items must be received by Lender in form and
substance satisfactory to Lender on or prior to the Closing Date (each capitalized term used but
not otherwise defined herein shall have the meaning ascribed thereto in Annex A):

A. Appendices. All Appendices to the Agreement, in form and substance satisfactory to
Lender.

B. Revolving Notes. Duly executed originals of the Revolving Notes for each
applicable Lender, dated the Closing Date.

C. Security Agreement. Duly executed originals of the Security Agreement, dated the
Closing Date, and all instruments, documents and agreements executed pursuant thereto.

D. Insurance. Satisfactory evidence that the insurance policies required by
Section 5.4 are in full force and effect, together with appropriate evidence showing loss
payable and/or additional insured clauses or endorsements, as requested by Lender, in favor of
Lender, on behalf of Lender.

E. Security Interests and Code Filings.

(a) Evidence satisfactory to Lender that Lender has a valid and perfected first priority
security interest in the Collateral, including (i) such documents duly executed by each Credit
Party (including financing statements under the Code and other applicable documents under the laws
of any jurisdiction with respect to the perfection of Liens) as Lender may request in order to
perfect its security interests in the Collateral and (ii) copies of Code search reports listing all
effective financing statements that name any Credit Party as debtor, together with copies of such
financing statements, none of which shall cover the Collateral, except Liens permitted under
Section 6.7(b).

(b) Evidence satisfactory to Lender, including copies, of all UCC-1 and other financing
statements filed in favor of any Credit Party.

F. Guaranty. Duly executed originals of the Guaranty, dated the Closing Date, and all
documents, instruments and agreements executed pursuant thereto.

G. Guaranty of GMS Family Investors, LLC. Duly executed originals of that certain
Guaranty, dated the Closing Date, executed by GMS Family Investors, LLC in favor of Lender, and all
documents, instruments and agreements executed pursuant thereto.

 

 

 

H. Letter of Direction. Duly executed originals of a letter of direction from
Borrower Representative addressed to Lender with respect to the disbursement on the Closing Date of
the proceeds of the initial Advance.

I. Existing Loan Balance Letter. Copies of a duly executed letter, in form and
substance reasonably satisfactory to Lender, by and between all parties to the Prior Lender Loan
Agreement evidencing the amount of all Prior Lender Obligations to be repaid with the proceeds of
the initial Advance on the Closing Date.

J. Charter and Good Standing. For each Credit Party, such Person’s (a) charter, and
all amendments thereto, (b) good standing certificates in its state of formation, (c) good standing
certificates and certificates of qualification to conduct business in each jurisdiction where its
ownership or lease of property or the conduct of its business requires such qualification, each
dated a recent date prior to the Closing Date and certified by the applicable Secretary of State or
other authorized Governmental Authority.

K. Bylaws and Resolutions. For each Credit Party, (a) such Person’s bylaws or
operating agreement, as applicable, together with all amendments thereto and (b) resolutions of
such Person’s Board of Directors or Members, as applicable, approving and authorizing the
execution, delivery and performance of the Loan Documents to which such Person is a party and the
transactions to be consummated in connection therewith, each certified as of the Closing Date by
such Person’s corporate secretary or an assistant secretary or Members, as applicable, as being in
full force and effect without any modification or amendment.

L. Incumbency Certificates. For each Credit Party, signature and incumbency
certificates of the member, officers or representative of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person’s corporate secretary or assistant
secretary or other authorized person as being true, accurate, correct and complete.

M. Opinions of Counsel. Duly executed originals of opinions of Lowenstein Sandler PC,
counsel for the Credit Parties (including with respect to New York and New Jersey law and Delaware
corporate law matters, together with existing regulatory counsel opinions rendered in connection
with Asta Funding’s last public offering) reasonably requested by Lender, each in form and
substance reasonably satisfactory to Lender and its counsel, dated the Closing Date, and each
accompanied by a letter addressed to such counsel from the Credit Parties, authorizing and
directing such counsel to address its opinion to Lender and to include in the opinion of Lowenstein
Sandler PC, an express statement to the effect that Lender are authorized to rely on such opinion.

N. Pledge Agreement. Duly executed originals of the Pledge Agreement accompanied by
(as applicable) (a) share certificates representing all of the outstanding Stock being pledged
pursuant to such Pledge Agreement and stock powers for such share certificates executed in blank
and (b) the original Intercompany Notes and other instruments evidencing Indebtedness being pledged
pursuant to such Pledge Agreement, duly endorsed in blank.

O. Pledge Agreement of GMS Family Investors, LLC. Duly executed originals of that
certain Pledge Agreement, dated the Closing Date, executed by each GMS Family Investors,

 

D-2

 

LLC in favor of Lender, accompanied by (as applicable) (a) share certificates representing all
of the outstanding Stock being pledged pursuant to such Pledge Agreement and stock powers for such
share certificates executed in blank and (b) the original Intercompany Notes and other instruments
evidencing Indebtedness being pledged pursuant to such Pledge Agreement, duly endorsed in blank.

P. Accountants’ Letters. A letter from the Credit Parties to their independent
auditors authorizing the independent certified public accountants of the Credit Parties to
communicate with Lender in accordance with Section 4.2.

Q. Disclosure Document. The Credit Parties shall execute and deliver to Lender for
the benefit of Lender the Disclosure Document and the exhibits attached thereto, all of which shall
be in form and substance acceptable to Lender.

R. Account Control Agreement of GMS Family Investors, LLC. Duly executed originals of
that certain Account Control Agreement, dated the Closing Date, by and among GMS Family Investors,
LLC, UBS Financial Services Inc. and Lender, and all documents, instruments and agreements executed
pursuant thereto.

S. Officer’s Certificate. Lender shall have received duly executed originals of a
certificate of the Chief Executive Officer or Chairman of the Board of Borrower Representative,
dated the Closing Date, stating that to such officer’s knowledge, since June 30, 2009 (a) no event
or condition has occurred or is existing which could reasonably be expected to have a Material
Adverse Effect; (b) there has been no material adverse change in the industry in which any Borrower
operates; (c) no Litigation has been commenced which, if successful, could reasonably be expected
to have a Material Adverse Effect or which challenges any of the transactions contemplated by the
Agreement and the other Loan Documents; (d) there have been no Restricted Payments made by any
Credit Party in violation of the Agreement other than in connection with the Related Transactions;
and (e) there has been no material increase in liabilities, liquidated or contingent (other than in
connection with the Related Transactions), and no material decrease in assets of any Borrower or
any of its Subsidiaries.

Furthermore, Lender shall have received duly executed originals of a certificate of the Chief
Executive Officer or Chairman of the Board of Borrower Representative, dated the Closing Date,
stating that to such officer’s knowledge, no changes have been made in the business operations or
activities or the licensing requirements of any Credit Party that would reasonably require any
changes to be made to the facts expressed in the existing regulatory counsel opinions rendered in
connection with Asta Funding’s last public offering in order for such existing regulatory counsel
opinion and the facts shown therein to continue to be true, complete and correct in all material
respects as of the Closing Date (or, if such changes would reasonably be required, then setting
forth in reasonable detail such changes) and stating that to the best of his knowledge and belief,
after having made reasonable investigations, Palisades Collection, L.L.C., is the only Credit Party
required by applicable law to be licensed to conduct the consumer debt collection business
operations and activities of the Borrowers and the other Credit Parties.

T. [RESERVED]

 

D-3

 

U. Financials; Financial Condition. Lender shall have received the Financial
Statements and other materials set forth in Section 3.4, certified by Borrower
Representative’s Chief Financial Officer or Manager. Lender shall have further received a
certificate of a Manager of Borrower Representative or with respect to any limited liability
company, other authorized person of each Borrower, to the effect that (a) such Borrower will be
Solvent upon the consummation of the transactions contemplated herein; (b) the projections fairly
present the financial condition of such Borrower as of the date thereof after giving effect to the
transactions contemplated by the Loan Documents; and (c) containing such other statements with
respect to the solvency of such Borrower and matters related thereto as Lender shall reasonably
request.

V. Other Documents. Such other certificates, documents and agreements respecting any
Credit Party as Lender may, in its reasonable discretion, request.

 

D-4

 

ANNEX E (SECTION 4.1(A))

TO

LOAN AGREEMENT

FINANCIAL STATEMENTS — REPORTING

Borrowers shall deliver or cause to be delivered to Lender or to Lender, as indicated, the
following:

A. Quarterly Financials. To Lender, within 45 days after the end of each Fiscal
Quarter, either the Form 10Q that Asta Funding filed for that Fiscal Quarter with the Securities
and Exchange Commission or, in the event Asta Funding has not filed its Form 10Q on a timely basis
(without taking into consideration any extensions granted for the filing of such Form 10Q), the
following (hereinafter referred to as the “Alternative Financial Information”) consolidated
financial information regarding Asta Funding, its Subsidiaries, and Borrowers (in each case,
together with consolidating worksheets in the event a Non-Credit Party Affiliate has Indebtedness
or owns assets of any material nature), including (A) unaudited balance sheets as of the close of
such Fiscal Quarter and the related statements of income and cash flow for that portion of the
Fiscal Year ending as of the close of such Fiscal Quarter, and (B) unaudited statements of income
and cash flows for such Fiscal Quarter, in each case setting forth in comparative form the figures
for the corresponding period in the prior year and the figures contained in the projections for
such Fiscal Year, all prepared in accordance with GAAP (subject to normal year-end adjustments) on
a review basis by an independent certified public accounting firm of national standing or otherwise
reasonably acceptable to Lender. In any event, Borrowers shall deliver to Lender and Lender a copy
of any and all Form 10Q that Asta Funding files with the Securities and Exchange Commission within
15 days after making any such filing. Such Form 10Q or Alternative Financial Information, as the
case may be, shall be accompanied by the certification of the Chief Financial Officer or other
senior officer of Borrower Representative that (i) such financial information presents fairly in
accordance with GAAP (subject to normal year-end adjustments) the financial position, results of
operations and statements of cash flows of Asta Funding, Borrowers and their Subsidiaries, on a
consolidated basis (together with consolidating worksheets in the event a Non-Credit Party
Affiliate has Indebtedness or owns assets of any material nature), as at the end of such Fiscal
Quarter and for that portion of the Fiscal Year then ended, (ii) any other information presented is
true, correct and complete in all material respects and that there was no Default, which is not
reasonably capable of being cured, or Event of Default in existence as of such time or, if a
Default, which is not reasonably capable of being cured, or Event of Default has occurred and is
continuing, describing the nature thereof and all efforts undertaken to cure such Default, which is
not reasonably capable of being cured, or Event of Default. In addition, Asta Funding and
Borrowers shall deliver to Lender, within 45 days after the end of each Fiscal Quarter, a statement
of the intercompany loan balance of all Intercompany Notes as of the end of such Fiscal Quarter.

B. Annual Audited Financials. To Lender, within 90 days after the end of each Fiscal
Year, audited Financial Statements for Asta Funding, Borrowers and their Subsidiaries on a
consolidated basis (together with consolidating worksheets), consisting of balance sheets and
statements of income and retained earnings and cash flows, setting forth in comparative form in
each case the figures for the previous Fiscal Year, which Financial Statements shall be prepared

 

 

 

in accordance with GAAP and certified without qualification, by an independent certified
public accounting firm of national standing or otherwise reasonably acceptable to Lender. Such
Financial Statements shall be accompanied by (i) a report from such accounting firm to the effect
that, in connection with their audit examination, nothing has come to their attention to cause them
to believe that the Asta Funding and/or Borrowers have failed to comply with the terms, covenants,
provisions or conditions of Section 5.3, Section 6.2 through Section 6.8
inclusive, Section 6.10, and Section 6.12 through Section 6.16 inclusive,
of this Agreement (or specifying any non-compliance that they became aware of), it being understood
that such audit examination extended only to financial and accounting matters and that no special
investigation was made with respect to the existence of any such non-compliance, (ii) from Asta
Funding and the Borrowers, the annual letters to such accountants in connection with their audit
examination detailing contingent liabilities and material litigation matters, and (iii) the
certification of the Chief Executive Officer or Chief Financial Officer of Asta Funding and the
Borrowers that all such Financial Statements present fairly in all material respect in accordance
with GAAP the financial position, results of operations and statements of cash flows of Asta
Funding, Borrowers and their Subsidiaries on a consolidated basis (together with consolidating
worksheets), as at the end of such Fiscal Year and for the period then ended, and that there was no
Default or Event of Default in existence as of such time or, if a Default, which is not reasonably
capable of being cured, or Event of Default has occurred and is continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default.

C. Management Letters. To Lender, within 5 Business Days after receipt thereof by any
Credit Party, copies of all management letters, exception reports or similar letters or reports
received by such Credit Party from its independent certified public accountants.

D. Default Notices. To Lender, as soon as practicable, and in any event within 2
Business Days after an executive officer of any Borrower has actual knowledge of the existence of
any Default, Event of Default or other event that has had a Material Adverse Effect, telephonic or
telecopied notice specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically, shall be promptly
confirmed in writing on the next Business Day.

E. SEC Filings and Press Releases. To Lender, promptly upon their becoming available,
copies of: (i) all Financial Statements, reports, notices and proxy statements made publicly
available by any Credit Party to its security holders; (ii) all regular (including, without
limitation, all 10Ks and 10Qs) and periodic reports and all registration statements and
prospectuses, if any, filed by any Credit Party with any securities exchange or with the Securities
and Exchange Commission or any governmental or private regulatory authority; and (iii) all press
releases and other statements made available by any Credit Party to the public concerning material
changes or developments in the business of any such Person.

F. Supplemental Schedules. To Lender (and upon the request of Lender, Lender),
supplemental disclosures, if any, required by Section 5.6.

G. Litigation. To Lender (and upon the request of Lender, Lender) in writing,
promptly upon learning thereof, notice of any Litigation commenced or threatened against any Credit
Party that (i) seeks damages in excess of $500,000 (except that in the case of Litigation

 

E-2

 

relating to Accounts, any Litigation that seeks damages in excess of $1,000,000 with respect
to claims for which the applicable Credit Party has no right of indemnification from the originator
or seller of any such Account, or Litigation that seeks damages in excess of $2,500,000 with
respect to claims for which the applicable Credit Party has a right of indemnification from the
originator or seller of any such Account), (ii) seeks injunctive relief, (iii) is asserted or
instituted against any Plan, its fiduciaries or its assets or against any Credit Party or ERISA
Affiliate in connection with any Plan (iv) alleges criminal misconduct by any Credit Party, (v)
alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental
Liabilities or (vi) involves any consumer credit violations.

H. Insurance Notices. To Lender (and upon the request of Lender, Lender), disclosure
of losses or casualties required by Section 5.4.

I. Lease Default Notices. To Lender (and upon the request of Lender, Lender), within
2 Business Days after receipt thereof, copies of (i) any and all default notices received under or
with respect to any leased location or public warehouse where Collateral is located, and (ii) such
other notices or documents as Lender may reasonably request.

J. Lease Amendments. To Lender (and upon the request of Lender, Lender), within 2
Business Days after receipt thereof, copies of all material amendments to real estate leases.

K. Other Documents. To Lender, such other financial and other information respecting
any Credit Party’s business or financial condition as Lender shall from time to time reasonably
request.

 

E-3

 

ANNEX F (SECTION 4.1(B))

TO

LOAN AGREEMENT

COLLATERAL REPORTS

Borrowers shall deliver or cause to be delivered to Lender (within a reasonable period of time
after request therefor) such reports, summaries and information relating to the Portfolios, the
Collateral, the Accounts, the business operations and activities of the Credit Parties, the
transactions and other matters contemplated by the Agreement, the Loan Documents, and the
Obligations, as Lender shall reasonably request from time to time.

 

F-1

 

ANNEX G

TO

LOAN AGREEMENT

RESERVED

 

G-1

 

ANNEX H (Section 9.9(a))

to

LOAN AGREEMENT

WIRE TRANSFER INFORMATION

RESERVED.

 

H-1

 

ANNEX I (Section 11.10)

to

LOAN AGREEMENT

NOTICE ADDRESSES

	 	 	 	 	 
	(A)

	 	If to Lender:	 	 
	 
	 	 	 	 
	 

	 	Bank Leumi USA	 	 
	 

	 	562 Fifth Avenue	 	 
	 

	 	New York, NY 10036	 	 
	 

	 	Attention:
	 	Mary Ellen Bianco
	 

	 	Telecopier No.:
	 	(212) 626 1329
	 

	 	Telephone No.:
	 	(212) 626 1390
	 
	 	 	 	 
	with copies to (which shall not constitute notice):
	 
	 	 	 	 
	 	 	Otterbourg, Steindler, Houston & Rosen, P.C.
	 

	 	230 Park Avenue	 	 
	 

	 	New York, NY 10169	 	 
	 

	 	Attention:
	 	Richard L. Stehl, Esq.
	 

	 	Telecopier No.:
	 	(212) 682-6104
	 

	 	Telephone No.:
	 	(212) 661-9100
	 
	 	 	 	 
	(B)	 	If to any Borrower, any Credit Party, or any Guarantor, to Borrower Representative, at:
	 
	 	 	 	 
	 

	 	Palisades Collection, L.L.C.	 	 
	 

	 	210 Sylvan Avenue	 	 
	 

	 	Englewood Cliffs, NJ 07632	 	 
	 

	 	Attention:
	 	Gary Stern
	 

	 	 	 	Robert J. Michel
	 

	 	Telecopier No.:	 	 
	 

	 	Telephone No.:
	 	(201) 308-9245
	 
	 	 	 	 
	with copies to (which shall not constitute notice):
	 
	 	 	 	 
	 

	 	Lowenstein Sandler PC	 	 
	 

	 	65 Livingston Avenue	 	 
	 

	 	Roseland, NJ 07068	 	 
	 

	 	Attention:
	 	Daniel J. Barkin, Esq.
	 

	 	Telecopier No.:
	 	(973) 597-2307
	 

	 	Telephone No.:
	 	(973) 597-2306

 

I-1

 

ANNEX J

(from Annex A — Commitments definition)

to

LOAN AGREEMENT

 

J-1

 

SCHEDULE 1.1

AGENTS’ REPRESENTATIVE

	 	 	 	 	 
	Name:

	 	Mary Ellen Bianco	 	 
	 

	 	Bank Leumi USA	 	 
	 

	 	562 Fifth Avenue	 	 
	 

	 	New York, NY 10036	 	 
	 

	 	Telecopier No.:
	 	(212) 626 1329
	 

	 	Telephone No.:
	 	(212) 626 1390

 

Schedule 1.1 - 1

 

SCHEDULE 1.1(c)

 

G-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}]]