Document:

exhibit10-3aug252008.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
10.3

    

    

    PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

    

    BETWEEN

    

    SPIRIT
OF AMERICA NATIONAL BANK

    

    AND

    

    ARIZONA
MAIL ORDER COMPANY, INC.

    

    

    DATED
AS OF August 25, 2008

    

    

    

    

    

    

    

    
      
        
          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

           

          

           

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    

    TABLE OF
CONTENTS

    

    

      
        	
                SECTION
      1.

              	
                DEFINITIONS

              	
                1

              
	
                SECTION
      2.

              	
                THE
      PLAN

              	
                9

              
	
                SECTION
      3.

              	
                OPERATION
      OF THE PLAN

              	
                19

              
	
                SECTION
      4.

              	
                REPRESENTATIONS
      AND WARRANTIES OF AMO

              	
                24

              
	
                SECTION
      5.

              	
                COVENANTS
      OF AMO

              	
                26

              
	
                SECTION
      6.

              	
                REPRESENTATIONS
      AND WARRANTIES OF BANK

              	
                29

              
	
                SECTION
      7.

              	
                COVENANTS
      OF BANK

              	
                30

              
	
                SECTION
      8.

              	
                INDEMNIFICATION

              	
                32

              
	
                SECTION
      9.

              	
                TERM,
      EXPIRATION AND TERMINATION

              	
                34

              
	
                SECTION
      10.

              	
                MISCELLANEOUS

              	
                38

              
	
                SCHEDULE
      2.1(a)

              	 
      	
                2

              
	
                Schedule
      2.1(b)

              	
                Service
      Standards

              	
                7

              
	
                Schedule
      2.3

              	
                OPERATING
      PROCEDURES

              	
                8

              
	
                Schedule
      2.5(a)

              	
                Marketing
      Promotions

              	
                11

              
	
                Schedule
      2.5(b)

              	
                Marketing
      Funds

              	
                12

              
	
                SCHEDULE
      2.7

              	 
      	
                13

              
	
                CREDIT
      CRITERIA

              	 
      	
                13

              
	
                Schedule
      2.8

              	
                Monthly
      Master File Information

              	
                16

              
	
                Schedule
      2.9(c)

              	
                Bank
      Enhancement Marketing Services

              	
                19

              
	
                Schedule
      3.1

              	
                Cross-Shopping

              	
                20

              
	
                Schedule
      3.6(d)

              	
                Summary
      of Rates and Fees

              	
                21

              
	
                Schedule
      3.11

              	
                Non-Competition

              	
                23

              
	
                Schedule
      3.13

              	
                Bank
      Reports

              	
                24

              
	
                APPENDIX
      A

              	
                AMO
      Businesses and AMO Brands and AMO Marks

              	
                25

              

      

    

    

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
         

        
          

        

      

      
         

      

    

    RIVATE
LABEL CREDIT CARD PROGRAM AGREEMENT

    

    

    THIS
PRIVATE LABEL CREDIT CARD PLAN AGREEMENT is effective as of the 25th day of
August, 2008, and is entered into between Arizona Mail Order Company, Inc., a
Delaware corporation (“Arizona Mail Order” or “AMO”), and SPIRIT OF AMERICA
NATIONAL BANK, a national banking association with its principal office at 1103
Allen Drive, Milford, Ohio 45150 (hereinafter referred to as
“Bank”).

    

    

    

    WITNESSETH:

    

    

    

    WHEREAS,
pursuant to the Crosstown Traders Business Purchase/Sale Agreement (as defined
below), Norm Thompson has agreed to acquire all of the issued and outstanding
shares of capital stock of Arizona Mail Order; and

    

    WHEREAS,
prior to the date hereof, Bank has operated the Crosstown Traders
Program   under which Bank has extended credit under the
Crosstown Traders Accounts and issued Crosstown Traders Credit Cards to
Crosstown Traders Credit Cardholders (as such capitalized terms are defined
below); and

    

    WHEREAS,
AMO has requested that Bank continue to extend credit to qualifying individuals,
in the form of private label open-ended credit card accounts (including the
Crosstown Traders Program Accounts), for the purchase of Goods and/or Services
from AMO through its Sales Channels and to issue Credit Cards to such
individuals in a manner substantially similar to that in which it has operated
the Crosstown Traders Program, on the terms set forth herein, following Closing
until the Conversion or earlier expiration of the Term as provided herein (as
such capitalized terms are defined below); and

    

    WHEREAS,
until the closing under any Account Portfolio Purchase/Sale Agreement, Bank
shall own all the Accounts, and Cardholder payments will be sent to such
location as Bank shall from time to time direct (as such capitalized terms are
defined below); and

    

    WHEREAS,
Bank will operate the Plan subject to the terms and conditions as more fully set
forth herein;

    

    NOW
THEREFORE, in consideration of the terms and conditions hereof, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
mutually acknowledged by the parties, AMO and Bank agree as
follows.

    

    SECTION
1.  DEFINITIONS

    

    1.1           Certain
Definitions.  As used herein and unless otherwise required by
the context, the following terms shall have the following respective
meanings.

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
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    “Account”
shall mean an individual open-end revolving line of credit which is (i)
established by Bank for a Customer pursuant to the terms of a Credit Card
Agreement, (ii) marketed with an AMO Brand or combination of AMO Brands; and
(iii) which can be accessed by a Credit Card issued by Bank to correspond to
such Account; including without limitation the Crosstown Traders
Accounts.

    

    “Account
Balance” means any and all amounts owing by the Cardholder thereunder, including
principal, accrued finance charges and other fees, whether or not
billed.

    

    “Account
Portfolio Purchase/Sale Agreement” shall mean the WFNNB Account Portfolio
Purchase/Sale Agreement or such other agreement entered into by Bank and an
Approved Replacement Purchaser to effect the transfer of ownership and custody
of all or substantially all of the Accounts and receivables with respect
thereto.

    

    “Accounts
Receivable “shall mean, as to any Account at the time of reference, any and all
amounts owing on such Account, including, without limitation, principal balances
from Purchases, purchases of AMO Enhancement Marketing Services, fees related to
Protection Programs and Bank Enhancement Marketing Services, accrued finance
charges (whether or not posted or billed to an Account), late fees, and all
other fees and charges assessed on the Accounts, less any payments and credits
received by Bank with respect to the Accounts. This definition specifically
excludes any amounts which have been written-off by Bank with respect to such
Accounts.

    

     “Address
Verification Service” shall mean an adjunct process to the credit authorization
process where the Cardholder’s reported billing address is verified against the
Bank’s address on file for such Cardholder.

    

    “Affiliate”
shall mean with respect to a party any entity that is owned by, owns,
or is under common control with such party.

    

    “Agreement”
shall mean this Private Label Credit Card Plan Agreement, including any
schedules, exhibits, addenda, and future amendments and supplements
hereto.

    

    “AMO”
shall mean the party identified by such name in the first paragraph on Page 1 of
this Agreement.

    

    “AMO
Brands” shall mean the brand name(s) chosen by AMO to identify the Accounts,
Credit Cards, etc. related to a corresponding AMO Business. No AMO Brand shall
do business using the AMO Brand of another AMO Business, although a single AMO
Business can do business under more than one (1) AMO Brand.  For
instance, as of the Closing Date, the AMO Brands “Bedford Fair Lifestyles” and
“Willow Ridge” comprise a single AMO Business. All AMO Brands are also AMO
Marks, but not vice-versa.  The AMO Brands are set forth on Appendix
A.

    

    “AMO
Businesses” shall mean the business operations under which AMO operates, which
are set forth on Appendix A under the column entitled “AMO Businesses”.

    

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
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    “AMO
Deposit Account” shall mean the one (1) deposit account (to be used for all AMO
Businesses) maintained by AMO and designated by it in writing to Bank as to
which Bank should direct its payments. See also Section 3.6
(a).

    

    “AMO
Mark” shall mean a trademark, service mark, or name owned by or licensed (and
capable of being sublicensed) to AMO relating to the AMO Brands and designated
by AMO to Bank for use in connection with the Plan.

    

    “Applicable
Law” shall mean any applicable federal, state or local law, rule, or regulation,
including, without limitation, any directive or guidance of the Office of the
Comptroller of the Currency.

    

    “Applicant”
shall mean an individual who is a Customer and applies for an Account under the
Plan.

    

    “Approved
Replacement Purchaser” means a bank or financial institution (i) reasonably
acceptable to AMO and Bank, which, notwithstanding the foregoing, shall include
each of the following: World Financial Network National Bank, any investment
fund managed by Golden Gate Private Equity, Inc., Orchard Brands Corporation,
Citigroup, Barclay’s, HSBC, GE Capital, Bank of America and JP Morgan
Chase, any of the respective affiliates of any of the foregoing or any other
entity mutually agreed upon by AMO and Bank and (ii) which enters into a Program
Agreement with AMO.

    

    “Bank”
shall mean the party to this Agreement identified in the first paragraph on Page
1 of this Agreement.

    

    “Bank
Mark” shall mean a trademark, service mark, or name owned by or licensed (and
capable of being sublicensed) to Bank and designated by Bank to AMO for use in
connection with the Plan.

    

    “Batch
Prescreen” shall mean a process where Bank’s offer of credit is made to certain
Customers prequalified by Bank (per its criteria), in a batch mode (often but
not exclusively within a direct to consumer environment).

    

    “Billing
Statement” shall mean Bank’s periodic statement listing the amounts of Purchases
made, credits received, and other information, as required by Applicable Law
and/or deemed desirable by Bank.

    

    “Business
Day” shall mean any day, except Saturday, Sunday or a day on which banks in Ohio
are required to be closed.

    

    “Cardholder”
shall mean any natural person to whom an Account has been issued by Bank and/or
any authorized user of the Account; including without limitation the Crosstown
Traders Credit Cardholders.

    

    “Card
Association” shall mean a nationwide payment clearing network such as MasterCard
International, Inc., Visa U.S.A. Inc., American Express, or Discover,
the

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
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    credit
accounts and cards related to which are accepted universally in the retail
market place.

    

    “Charge
Slip” shall mean a sales receipt, register receipt tape, invoice or other
documentation, whether in hard copy or electronic form, in each case evidencing
a Purchase that is to be charged to a Cardholder’s Account.

    

    “Closing”
shall mean the transfer of ownership and custody of all issued and outstanding
shares of Arizona Mail Order from Crosstown Traders, Inc. to Norm Thompson
Outfitters, Inc., as set forth in the Crosstown Traders Business Purchase/Sale
Agreement.

    

    “Closing
Date” means the date of the Closing.

    

    “Consumer
Personal Information” shall mean that non-public personal information regarding
Applicants, Customers, and Cardholders, including but not limited to Account
information consumer reports, and information derived from consumer reports,
that is subject to protection from publication under Applicable
Law.

    

    “Conversion”
shall mean the transition of private label credit card services from Bank to a
Program Provider (who shall be an Approved Replacement Purchaser) pursuant to a
Program Agreement.

    

    “Conversion
Date” shall mean the date of the closing of a Conversion.

    

    “Conversion
Plan” shall mean the plan as set forth on Schedule 2.1 attached
hereto.

    

    “Credit
Card” shall mean the credit card issued by Bank to Cardholders, corresponding to
a related Account for the purpose of purchasing Goods and/or Services pursuant
to this Agreement; including, without limitation, the Crosstown Traders Credit
Cards.

    

    “Credit
Card Agreement” shall mean the open-end revolving credit agreement between a
Cardholder and Bank governing the Account and Cardholder’s use of the Credit
Card, together with any modifications or amendments which may be made to such
agreement.

    

    “Credit
Sales Day” shall mean any day, whether or not a Business Day, on which Goods
and/or Services are sold by AMO through its Sales Channels.

    

    “Credit
Slip” shall mean a sales credit receipt or other documentation, whether in hard
copy or electronic form, evidencing (i) a return or exchange of Goods, or (ii) a
credit on an Account as an adjustment by AMO for goodwill or for Services
rendered or not rendered by AMO to a Cardholder.

    

    “Crosstown
Traders Accounts” shall mean the private label credit accounts issued under the
Crosstown Traders Program for the AMO Brands.

    

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
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    “Crosstown
Traders Business Purchase/Sale Agreement” shall mean that Stock Purchase
Agreement, dated as of the date hereof, by and between Crosstown Traders, Inc.
and Norm Thompson, under the terms of which Norm Thompson. shall acquire all of
the issued and outstanding shares of capital stock of Arizona Mail
Order.

    

    “Crosstown
Traders Credit Cards” shall mean the private label credit cards issued under the
Crosstown Traders Program, used to access Crosstown Traders Accounts for the AMO
Brands.

    

    “Crosstown
Traders Credit Cardholders” shall mean those individuals to whom Crosstown
Traders Accounts and Crosstown Traders Credit Cards were issued.

    

    “Crosstown
Traders Program” shall mean the private label credit account program operated by
Bank for Arizona Mail Order prior to the Closing Date relating to the AMO
Brands.

    

    “Cross
Shopping” shall mean the reciprocal honoring, by different AMO Businesses, of
Accounts corresponding to other AMO Businesses.  See also Schedule
3.1.

    

    “Customer”
shall mean any individual consumer who is a customer or potential customer of an
AMO Business.  Use of the term shall encompass all AMO Businesses
unless the context of the reference dictates otherwise.

    

    “Deferred
Program” shall mean a program featuring special repayment terms approved by
Bank, including any one or more of the following: deferred and/or waived
interest, deferred payments, minimum purchase amounts, minimum monthly payments,
and any other terms and conditions set forth by Bank.  Bank offers 60
day Deferred Programs at the Discount Fee set forth on Schedule
1.1.  Any other Deferred Programs may be made part of this Agreement
only by written amendment.

    

    “Deferred
Program Purchases” shall mean Purchases made under the terms of any Deferred
Program.

    

    “Discount
Fee” shall have the meaning set forth in Schedule 1.1.

    

    “Electronic
Customer Service (or eCS)” shall mean a web-based customer service system Bank
makes available on a Bank website.

    

    “Equal
Payment Program” shall mean a program featuring special repayment terms,
approved by Bank, including repayment based on equal payments over a
predetermined period of time, and any other terms and conditions set forth by
Bank. As of the date hereof, there are no Equal Payment Programs. Equal Payment
Programs may be made part of this Agreement only by written
amendment.

    

    “Equal
Payment Program Purchases” shall mean Purchases made under the terms of any
Equal Payment Program.

    

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
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    “Financial
Products” shall mean credit card issuance or payment processing arrangements or
programs similar in purpose to those components of the Plan (including but not
limited to ones involving a credit card) dealing with the extension of credit
and repayment of debt extended to Customers as contemplated under this
Agreement, including cardless, Internet-based or Internet-only payment vehicles
and contactless payment vehicles to be used as devices and/or methods by
Customers to purchase Goods and/or Services.

    

    “Forms”
shall have the meaning set forth in Section 2.4.

    

    “Goods
and/or Services” shall mean those goods and/or services sold at retail by AMO
through its Sales Channels to the general public for individual, personal,
family or household use.  Use of the term shall encompass all AMO
Businesses unless the context of the reference dictates
otherwise.  This definition specifically excludes goods and services
that are sold to Customers by third-party vendors of AMO and not AMO
itself.

    

    “Ineligible
Account” has the meaning set forth for such term in the WFNNB Account
Portfolio/Sale Agreement (as in effect as of the date hereof); provided that any
references therein to the “Transfer Date” shall be deemed references to the date
of the closing under any Account Portfolio/Purchase Sale Agreement.

    

    “Initial
Term” shall have the meaning set forth in Section 9.1.

    

    “Instant
Credit” shall mean an Account application procedure designed to open Accounts
whereby the application information is communicated to Bank either (i) verbally
at Point of Sale; or (ii) systemically during the order entry
process.

    

    “IVR”
shall mean an interactive voice response system and/or procedure.

    

    “Marketing
Fund” shall have the meaning set forth in Section 2.5(b).

    

    “Net
Proceeds” shall mean Purchases  less:  (i) credits to
Accounts for the return or exchange of Goods, or a credit on an Account as an
adjustment by AMO for goodwill or for Services rendered or not rendered by AMO
to a Cardholder, all as shown in the Transaction Records (as corrected by Bank
in the event of any computational error), calculated each Business Day; (ii)
payments from Cardholders received by AMO from Cardholders on Bank’s behalf;
(iii) applicable Discount Fees, and (iv) any other amounts owed to or by Bank
pursuant to this Agreement.  See Schedule 1.1

    

    “Net
Sales” shall mean Purchases, less credits or refunds for Goods and/or Services,
all as shown in the Transaction Records (as corrected by Bank in the event of
any computational error), calculated each Business Day.

    

    “Net
Sales on Regular Revolving Purchases” shall mean Regular Revolving Purchases,
less credits or refunds for Goods and/or Services, all as shown in the
Transaction Records (as corrected by Bank in the event of any computational
error), calculated each Business Day.

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
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    “Net
Sales on Promotional Program Purchases” shall mean Promotional Program
Purchases, less credits or refunds for Goods and/or Services, all as shown in
the Transaction Records (as corrected by Bank in the event of any computational
error), calculated each Business Day.

    

    “Norm
Thompson” means Norm Thompson Outfitters, Inc.

    

    “On-Line
Prescreen” shall mean a process where an offer of credit is made to certain
pre-qualified Customers, in real time pre-approved manner, at the POS at the
time of a transaction.

    

    “Operating
Procedures” shall mean Bank’s instructions and procedures regarding the Plan as
written by Bank and provided to AMO to be followed by AMO.

    

    “Plan”
shall mean the private label credit card plan established and administered by
Bank for Customers by virtue of this Agreement which shall replace the Crosstown
Traders Program in its entirety.

    

    “Plan
Documents” shall have the meaning set forth in Section 2.4.

    

    “Plan
Year” shall mean each consecutive twelve (12) month period commencing on the
Closing Date (or the first day of the first full calendar month following the
Closing Date if the Closing Date is not the first day of a calendar month) and
each anniversary thereof.

    `

    “Point of
Sale (or POS)” shall mean the physical or electronic location at which
transactions (sales, credits, and returns) take place.  This includes
but is not limited to a point of order entry or website (as
applicable).

    

    “Prescreen
Acceptance” shall mean a POS process designed to recognize and activate Bank’s
pre-approved batch offers for Accounts for Customers.

    

    “Program
Agreement” shall mean the WFNNB Program Agreement or any other agreement between
AMO and a Program Provider for the establishment and maintenance of private
label credit card services for the AMO Brands.

    

    “Program
Provider” shall mean World Financial Network National Bank or any other Person
that provides private label credit card services to AMO for the AMO Brands
following the expiration of the Term of this Agreement (or earlier termination
in accordance with the terms hereof) pursuant to a Program
Agreement.

    

    “Promotional
Programs” shall mean any special Cardholder payment terms approved by Bank (in
the form of an amendment) for certain Purchases, including without limitation
Deferred Programs and Equal Payment Programs. As of the date hereof, there are
no Promotional Programs. Promotional Programs may be made part of this Agreement
only by written amendment.

    

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
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    “Promotional
Program Purchase” shall mean a Purchase made under the terms of a Promotional
Program.

    

    “Purchase”
shall mean a purchase of Goods and/or Services, including without limitation all
applicable taxes and shipping costs, with a specific extension of credit by Bank
to a Cardholder using an Account as provided for under this
Agreement.  The term shall be interpreted to include Regular Revolving
Purchases as well as Promotional Program Purchases unless the context of the
reference clearly indicates otherwise.  Use of the term shall
encompass purchases from all AMO Businesses unless the context of the reference
dictates otherwise.

    

    “Regular
Revolving Purchases” shall mean Purchases which are not subject to any
Promotional Programs.

    

    “Sales
Channels” shall mean those certain sales channels (i.e., websites, catalogues,
etc.) through which AMO sells its Goods and/or Services under the AMO Brands
during the Term (and encompasses all AMO Businesses unless the context of the
reference dictates otherwise), which as of the Closing Date include website and
catalog.  As a point of clarification, this definition includes
different or additional sales channels that are part of AMO’s expansion of its
business under the AMO Brands as then constituted, if such expansion does not
include an entity other than AMO or a brand other than an AMO Brand. For
example: the opening of a retail location (by AMO, or by its Affiliate or a
franchisee or licensee operating under an AMO Mark) through either (i) “organic
growth” or (ii) acquisition of the assets (but not the ownership interest) of
another business. (See also Section 3.14 regarding the internal development or
acquisition of a business that would be new to AMO’s business as then
constituted or that involves an entity other than AMO).  However, the
ownership or operation by an AMO Affiliate of a business that is substantially
similar to that of AMO (at the then current point in time) shall be considered
an expansion of AMO for the purposes of this Agreement and such business (and
its owner entity) shall, at Bank’s option, be included in this Agreement by
amendment.

    

    “Service
Standards” shall have the meaning set forth in Schedule 2.1 (b).

    

    “Term”
shall mean the Initial Term as defined in Section 9.1.

    

    “Transaction
Record” shall mean the following, with respect to each Purchase or with respect
to a credit or return related to a Purchase (as applicable), and each payment
received by AMO from a Cardholder on Bank’s behalf:  (a) the Charge
Slip or Credit Slip corresponding to the Purchase, credit or return; or (b) a
computer readable tape/cartridge or electronic transmission containing the
following information: the Account number of the Cardholder, identification of
the AMO’s Sales Channel (location) where the Purchase, credit or return was made
(if applicable), the total of (i) the Purchase price of Goods or Services
purchased or amount of the credit, as applicable, plus (ii) the date of the
transaction, a description of the Goods or Services purchased, credited or
returned and the authorization code, if any, obtained by AMO prior to completing
the transaction; or (c) electronic record whereby AMO or one of its Sales
Channels electronically transmits the information described in subsection
(b)

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
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    hereof to
a network provider (selected by AMO at its expense), which in turn transmits
such information to Bank by a computer tape/cartridge or electronic tape or
transmission.

    

    “Web (or
Internet)” shall mean the world-wide web internet network as generally
understood in the greater business community.

    

    “Web
Application” shall mean a web based new Account application procedure made
available by Bank.  See also Section 2.2
(d).

    

    “WFNNB
Program Agreement” means the Private Label Credit Card Plan Agreement, dated as
of the date hereof, between Norm Thompson and World Financial Network National
Bank.

    

    “WFNNB
Account Portfolio Purchase/Sale Agreement” shall mean that purchase agreement
dated as of the date hereof, by and between Bank  (as seller), and
World Financial Network National Bank (as buyer) for the sale by Bank of certain
Accounts issued under the Crosstown Traders Program and the Plan and the
receivables related thereto (excluding Ineligible Accounts).

    

    1.2           Other
Definitions.  As used herein, terms defined in the introductory
paragraph hereof and in other sections of this Agreement shall have such
respective defined meanings.  Defined terms stated in the singular
shall include reference to the plural and vice versa.  The terms
“shall” and “will” have the identical meaning (i.e., that something is
compulsory and certain), and the use of one versus the other is not to be
interpreted as implying less certainty or a sense of possibility or
choice.

    

    SECTION
2.  THE
PLAN

    

    2.1           Establishment and Operation
of the Plan/Conversion
Plan.  (a) The Plan is established for the primary purposes of
providing Customer financing for purchasing Goods and/or Services through AMO
Brands.  The Plan shall commence on the Closing
Date.  Qualified Applicants desiring to use the Plan shall be granted
an Account by Bank with a credit line in an amount to be determined by Bank in
its discretion for each individual Applicant (but subject to
Section 2.7).  Subject to Section 3.6 (d) and Applicable Law,
Bank shall determine the terms and conditions of the Account to be contained in
a Credit Card Agreement.  For clarification, prior to the Closing,
Bank has operated the Crosstown Traders Program and pursuant to this Agreement,
Bank will operate the Plan following Closing until the Conversion or earlier
termination of the Term on the terms set forth herein, it being agreed that the
intent of this Agreement is for Bank to continue offering services to AMO,
consistent with the services provided under the Crosstown Traders Program as in
effect prior to the date hereof, until the Conversion or earlier termination of
this Agreement.  Bank and AMO shall use their commercially reasonable
efforts to pursue completion of the Conversion by October 31, 2008 in accordance
with the Conversion Plan set forth in Schedule 2.1(a) and the parties hereby
agree that to the extent any modifications to the Conversion Plan are required
to ensure the successful and efficient transition of a fully operational private
label credit card program consistent with the Plan as operated hereunder to the
Program Provider the parties shall negotiate in good faith to implement such
mutually agreed-upon

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
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    modifications.  In
the event any requests for enhancement or revisions to the credit Plan contained
in this Agreement would conflict with the timely completion of the Conversion
Plan, the Conversion Plan shall take precedence.  The parties shall
dedicate sufficient resources to the Conversion Plan as necessary to ensure its
timely completion.

    

    (b)           Bank
shall perform in accordance with the Service Standards. Bank will provide AMO
with a monthly summary of Bank’s performance regarding the Service Standards, as
set forth in Schedule 2.1 (b).  Bank shall use commercially reasonable
efforts to meet the Service Standards set forth in
Schedule 2.1(b).  Bank shall provide eCS, and AMO shall provide a
weblink to the eCS.  Regardless of whether any Bank website related to
eCS is the same as any referenced in 2.2 (d) below, AMO shall be subject to the
same obligations and terms and conditions set forth therein with regard to
maintaining connections, use of Bank’s Mark, Applicable Law, etc.

    

    2.2           Applications for Credit
Under the Plan;
Internet Services.  (a) AMO shall not promote or participate in
any application by a Customer for financing the purchase of Goods and/or
Services other than for participation in the Plan as provided in Section
3.11.  Applicants who wish to apply for an Account under the Plan must
submit a completed application on a form or in an electronic format approved by
Bank, and Bank shall grant or deny the request for credit based solely upon
Bank’s credit criteria.  When facilitating any method of application,
AMO shall follow all applicable Operating Procedures. The application shall be
submitted to Bank by the Applicant or submitted by AMO on behalf of the
Applicant, as required in the Operating Procedures.  If Bank grants
the request for an Account, Bank will issue a Credit Card to the Applicant to
accesses an individual line of credit in an amount determined by
Bank.

    

    (b)           Bank
shall make available, and AMO shall utilize, as applicable, the following
application procedures as of the Closing Date: Batch Prescreen Applications,
Address Verification Service, Instant Credit (Web and telephone based) and
mail-in application procedures.  See also subsection
(d) below regarding the Web Application procedure.  To the extent the
same are available under the Crosstown Traders Program as in effect on the date
hereof, the Bank further agrees to provide each Cardholder with the ability to
view its Account information and billing statements online, make payments on
such Cardholder’s Account via automated clearing house transfer or other payment
mechanism approved by the Bank and send other secure correspondence; obtain
billing statements; set up personal credit alert reminders; and request a credit
line increase on-line.  Bank will make available the use of its smart
messaging system at no cost to AMO provided the messaging format and volume are
substantially similar to the Crosstown Traders Program currently
provided.  See also clause (d) below.  Bank hereby
represents that as of the date hereof and as of the Closing Date, it does not
provide On-Line Prescreen services to the Crosstown Traders
Program.

    

    (c)           Regarding
applications submitted in whole or in part by AMO, AMO agrees that it will (i)
protect and keep confidential any and all Applicant information (which
information shall be Bank Consumer Personal Information) acquired as a result of
participating in the submission of any such applications, and not disclose the
information (except as required by Applicable Law or legal process) to anyone
other than authorized representatives of Bank,

    
      
        
           

          

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    and its
representatives and agents, and (ii) follow all Operating Procedures applicable
to such Bank Consumer Personal Information.

    

    Bank
shall make available the Web Application procedure by establishing a website for
such purpose, which shall be accessible from AMO’s website.  AMO
acknowledges that as of the date hereof, such website has been
established.  Bank will maintain and operate the website and Web
Application procedure consistent with past practices. AMO shall appropriately
monitor its website to ensure proper functioning.  In the event Bank
changes or otherwise modifies the website address for its designated website,
AMO will either update or modify its website thereto, as directed by
Bank.  In providing Web Application on the AMO website, if
appropriate, AMO shall make it clear and conspicuous that the Customer is
leaving AMO’s website and is being directed to Bank’s website for the exclusive
purpose of accessing Bank’s website and submitting an application for
credit.  AMO agrees that, in connection with the Web Application, it
will use Bank’s name, or any logo, statements, or any other information that is
related to Bank, only as directed by Bank, or as previously approved by Bank in
writing. Without limiting the generality of the scope of required approvals, but
by way of example, AMO shall seek Bank’s approval not only with respect to
content, but also with respect to any typestyle, color, or abbreviations used in
connection with the Web Application.

    

    If
Accounts opened via Web Applications prove to be unprofitable to Bank, Bank
shall have the right upon thirty (30) days prior written notice to AMO to
propose that AMO pay Bank a certain fee related to Web
Applications.  However, Bank shall not impose such fee if within such
thirty (30) days after receipt of Bank’s notice setting forth the amount of such
fee, AMO has rejected the fee and proposed an alternative.  However,
Bank may choose to discontinue Web Applications if the parties cannot agree upon
a fee or an alternative.

    

    (d) Bank
agrees that, to integrate and maintain the webpage and to ensure access to the
Plan website and reduce technical errors, it will use commercially reasonable
efforts to ensure that its software providing the link will function, and
continue to function, in a sound technical manner. Bank hereby represents and
warrants that as of the date hereof and as of the Closing Date, its software
providing the link functions in a sound technical manner consistent with past
practice (including cooperating with Charming Shoppes of Delaware, Inc. in
performing its obligations related thereto as set forth in Appendix A to that
certain Transition Services Agreement to be entered into between Charming
Shoppes of Delaware, Inc. and AMO).  AMO branding style (including
color, font and type size), marketing content and marketing design format of the
Plan website shall be subject to approval by the parties.  Bank shall
appropriately monitor the Plan website to ensure it is functioning properly. AMO
represents and warrants that, to integrate and maintain the link, and to ensure
access to the Plan website and reduce technical errors, it will use its
commercially reasonable efforts to ensure that its software providing the link
will function, and continue to function, in a sound technical manner. AMO shall
appropriately monitor the link to ensure it is functioning properly. In the
event Bank changes or otherwise modifies the website address for the Plan
website, AMO will either update or modify the link as reasonably requested by
Bank.  AMO agrees that, in connection with the link, it will only use
Bank's name, or any logo, statements, or any other information that is related
to Bank, only in accordance with this Agreement, or as approved in advance and
in writing by Bank.  Bank shall ensure that the Bank's Privacy Policy
is clearly and prominently posted on the pages of the Plan
website.

    
      
        
           

          

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    (e) Each
party represents and warrants to the other with respect to its Internet site
used to support the Plan as of the Closing Date and during the Term of this
Agreement that such party has the license, right or privilege to use the
hardware, software and content acquired from third parties for use in its
respective Internet website, and that it is the owner (or licensee) of all
hardware, software and content used in its respective Internet website and that
neither the website as a whole, nor any part thereof, infringes upon or violates
any patent, copyright, trade secret, trademark, invention, proprietary
information, nondisclosure or other rights of any third party.

    

    2.3           Operating
Procedures.  Each of AMO and Bank shall observe and comply with
the Operating Procedures and such other reasonable procedures as Bank may
prescribe on not less than thirty (30) days’ prior notice to AMO or otherwise
required by Applicable Law.  The Operating Procedures may be amended
or modified by Bank from time to time in its reasonable discretion; provided,
however, unless such changes are required by Applicable Law, a copy of any such
amendment or modification shall be provided to AMO at least thirty (30) days
before its effective date, and for those changes required by Applicable Law,
notice shall be given as soon as practicable.  The initial Operating
Procedures are attached hereto as Schedule 2.3.

    

    2.4           Plan Documents (Forms and
Collateral).  (a)  Forms - General.
Subject to (b) below, Bank shall design, determine the terms and conditions of,
and generate the form of the Credit Card Agreement, applications, Credit Card,
card mailers, privacy notices, Billing Statements (including backers),
Cardholder letters, templates, and other documents and forms  to be
used under the Plan which (i) relate to the Plan, (ii) relate to Bank’s and/or
the Cardholder’s obligations, (iii) are used by Bank in maintaining and
servicing the Accounts; or (iv) are required by Applicable Law (collectively,
“Forms”).  By way of clarification, Bank’s responsibilities do not
include any obligations AMO may have as a retailer, such as creating the form of
Charge Slips and Credit Slips.  All Forms shall be in the English
language only unless otherwise agreed by the parties in writing, and there shall
be only one design for each Form as to each AMO Business (which are the five (5)
identified on Appendix A).

    

    (b)           Forms -
Conditions.  The provisions of (a) above are subject to the
following conditions.  First, Bank’s actions are subject to Section
3.6 (d), Applicable Law, and Section 2.10.  Second, Bank and AMO shall
jointly design any Customer marketing aspects of Billing Statements, Credit
Cards, and card mailers.

    

    (c)           Collateral. AMO may
design and produce promotional material, direct mail pieces, catalog, newspaper,
radio and Internet advertisements, and other collateral documents (collectively,
“Collateral”) which reference the Plan.  AMO shall submit all
Collateral to Bank for its review and approval of the Plan disclosures, as well
as references to the Plan and use of Bank Marks.  Pursuant to this
review and approval process, AMO will make (or have made) all changes that Bank
requests to satisfy Applicable Law and/or in exercising its rights under this
Agreement promptly following such request.  Except as otherwise set
forth in this Agreement, AMO shall otherwise have sole discretion as to any
action with respect to any catalogue mailing or circulation.

    

    
      
        
           

          

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    (d)           Bank’s
Costs.  Subject to subsection (e) below, Bank will at its
expense provide to AMO at one central location, the template of any appropriate
Forms.

    

    (e)           AMO’s
Costs.

    

    (i) AMO Re-issuances. AMO shall pay
all costs related to any re-issuance of Credit Cards to Cardholders that AMO
requests or that is necessitated by AMO’s decisions and/or actions (collectively
“AMO Re-issuances”).  The costs associated with an AMO Re-issuance
include those of the card itself (including all embossing and encoding), card
mailers, envelopes, Credit Card Agreements, other Forms, Collateral, and
postage.  As a point of clarification, none of the following
constitutes an AMO Re-issuance: Bank’s replacement (on an Account-by-Account
basis) of lost or stolen Credit Cards, expired Credit Cards, or in response to
some other Cardholder request.

    

    (ii)           Variations from Bank’s
Standards.  If, in Bank’s good faith determination, a request
or requirement (as applicable) of AMO with regard to any Plan Documents requires
a variation from Bank’s standard specifications, and such variation causes an
increase in any cost of Bank, the following shall apply. First, Bank will advise
AMO in writing of the variance and provide a written estimate of the related
cost increase.  Second, AMO shall thereafter notify Bank in writing of
its decision to forego the request, to modify the request such that no cost
increase is generated, or agree to bear the additional expense. In the event any
Forms become obsolete as a result of changes requested by AMO or is reasonably
necessitated by its decisions and/or actions, AMO shall reimburse Bank for the
itemized and documented costs associated with any unused obsolete
Forms.

    

    (iii)           Mass Mailings.  As
to any mass mailings requested by AMO (including but not limited to catalog
mailings, pre-approved mailings, and zero balance mailings), AMO shall pay all
costs of such mass mailings.

    

    2.5           Marketing and Promotion of
Plan.  (a) Throughout the Term of this Agreement, AMO shall
take commercially reasonable steps to actively and consistently market, promote,
participate in and support the Plan in a manner consistent with past practices,
which may include, without limitation, those marketing promotions set forth in
Schedule 2.5 (a) and such other methods mutually agreed upon by AMO and
Bank.  AMO and Bank will jointly agree upon programs to market the
Plan, both initially and on a continuing basis. Once AMO and Bank agree upon
standards for the use of AMO Marks and Bank Marks, respectively, neither party
will deviate from such standards without express prior approval of the other
party. Bank must approve in advance AMO’s use of Bank’s Marks and any references
to the Plan.  Any cross-marketing agreements between AMO and Bank are
subject to the mutual agreement of the parties at a later date.

    

    (b)           Bank
shall contribute the amounts, if any, set forth in Schedule 2.5 (b) to apply to
marketing and promotion expenses associated with the Plan.  All of
such funds shall be referred to herein as the “Marketing Fund.”  If
the Marketing Funds are not used in the Plan Year or other time period
contributed, they will roll over to the next Plan Year.  AMO shall pay
all marketing and promotion expenses directly as they are incurred, and, if any
funds are then available in the Marketing Fund, shall send Bank an invoice for
the aggregate amount of

    
      
        
           

          

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    the
expenditures mutually agreed upon by the parties, together with copies of paid
invoices or other supporting documentation reasonably satisfactory to Bank for
such expenses.  Bank shall then reimburse AMO (within 30 days of
Bank’s receipt of each individual’s reimbursement request) until Bank’s maximum
contribution amount for the applicable Plan Year has been met.  Bank
shall have the right to cease the availability of the Marketing Funds
contributed by Bank for any future marketing or promotions if either party: (i)
terminates this Agreement, (ii) notifies the other party of an intent to
terminate or the fact that the notifying party has already terminated this
Agreement, or (iii) notifies the other of an intent to allow this Agreement to
expire.  However, Bank shall renew the availability of the Marketing
Funds for the then current Plan Year on a retroactive basis under the following
circumstances.  If, despite the occurrence of  (i), (ii), or
(iii) but prior to this Agreement’s expiration or termination, the parties renew
this Agreement and/or extend the expiration date by at least one (1)
year.

    

    2.6           Administration of Accounts
and Plan.  Bank shall perform, in compliance with Applicable
Law, all functions necessary to administer and service the Accounts, including
but not limited to: processing of applications; Credit Card production and
issuance; making all necessary credit investigations; notifying Applicants in
writing of acceptance or rejection of credit under the Plan; preparing and
mailing Billing Statements; making collections; handling Cardholder inquiries;
and processing payments.  Bank reserves the right to deny (or reverse)
an extension of credit for particular transactions in order to comply with
Applicable Law, which might include but not be limited to prohibitions against
transactions related to gambling.

    

    2.7           Credit
Decision.  Subject to the other provisions of this
Section 2.7, the decision to extend credit to any Applicant under the Plan
shall be Bank’s decision.  Bank will work in good faith with AMO to
develop business strategies with respect to the issuance of Credit Cards which
are intended to maximize the potential of the Plan, and which are mutually
beneficial to AMO and Bank, provided the same are generally consistent with the
strategies utilized in connection with the Crosstown Traders
Program.  In addition to Promotional Programs, commencing February 1,
2009 AMO may from time to time request Bank to consider offering certain other
types of special credit programs.  Bank shall reasonably consider
AMO’s requests and negotiate with AMO in good faith.  However, Bank
shall, in its sole discretion, subject to Applicable Laws and its safety and
soundness considerations, determine whether or not to offer any of such
programs.  In the event Bank agrees to any special credit program,
such agreement shall be documented in the form of a written amendment, which
amendment shall set forth any applicable terms related thereto, including but
not limited to fees associated with the special credit program.  The
Bank hereby agrees that in connection with the Plan it will continue to utilize
substantially similar credit criteria as it currently uses with respect to the
Crosstown Traders Program (which credit criteria are attached as Schedule 2.7
hereto) and that it shall continue to offer and maintain Accounts in a manner
substantially consistent with such credit criteria.  Bank hereby
represents that the criteria attached as Schedule 2.7 accurately reflect the
credit criteria currently applied by Bank under the Crosstown Traders Program
and that Bank has no present intent to modify such criteria.  In
addition, during the Term of this Agreement, except as may otherwise be required
to comply with Applicable Law, Bank shall offer and maintain Accounts in such a
manner that would not impair the ability of Bank to consummate a sale of the
Accounts under the WFNNB Account Portfolio Purchase/Sale Agreement (or after the
termination of the

    
      
        
           

          

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    WFNNB
Account Portfolio Purchase/Sale Agreement under any other Account Portfolio
Purchase/Sale Agreement).  Bank hereby agrees that unless Bank
determines, in its reasonable discretion (after consultation with AMO) that
continued usage of such credit criteria would have a material adverse effect on
the Bank’s ability to consummate a sale of the Accounts under the WFNNB Account
Portfolio Purchase/Sale Agreement or unless otherwise required by Applicable
Law, it shall not amend, supplement or otherwise modify the aforementioned
credit criteria attached hereto as Schedule 2.7 unless Bank obtains AMO’s prior
written consent.

    

    2.8           Ownership of Accounts and
Information. (a) The parties recognize that Cardholders are Customers,
and that each of Bank and AMO has certain ownership rights in information
relating to such individuals in their respective roles as Cardholders and
Customers.  The parties acknowledge that the same or similar
information may be contained in the Bank Cardholder Information (defined below)
and the AMO Customer Information (defined below); such common information being
referred to herein as “Common Information”.  Each such pool of data
shall therefore be considered separate information subject to the specific
provisions applicable to that data hereunder.  For example, in
subsection (b) below Bank is authorized to use AMO Customer Information only for
certain limited purposes.  For illustrative purposes only, presume
such information included names of both Customers who were Cardholders and
non-Cardholder Customers. The names of those who were both Customers and
Cardholders would be Common Information. So, Bank would not be limited by the
terms of subsection (b) as to such names. However, the names of non-Cardholder
Customers would not be Common Information, and thus would be subject to the
limitations set forth in subsection (b). Likewise, though subsection (c) below
limits what AMO can do with Bank Cardholder Information, such limitations do not
apply to that portion of Bank Cardholder Information that is comprised of Common
Information.

    

    (b)           The
Customer’s names and addresses and other Customer information collected by AMO
independent of Bank and set forth in AMO’s records shall be the exclusive
property of AMO; such information and AMO’s Common Information shall be referred
to collectively as “AMO  Customer Information”.  AMO Customer
Information might or might not be comprised exclusively of AMO’s Consumer
Personal Information. As requested by Bank, AMO shall provide the names and
addresses of Customers to Bank, to be used only for purposes of (i) evaluating
such Customer’s creditworthiness, (ii) soliciting such Customers for Credit
Cards, (iii) administering  the Plan in accordance with the terms of
this Agreement and Applicable Law. Bank shall protect the confidentiality of
such information as set forth in Section 10.17.

    

    (c)           (i)           The
Accounts and all information related thereto set forth in Bank’s records,
including without limitation the information listed in Schedule 2.8, the
information obtained through applications, the receivables, names, addresses,
credit, and transaction information of Cardholders shall be the exclusive
property of Bank during the Term, and thereafter (unless the Accounts are
purchased by AMO or its designee pursuant to Section 9.5). Such information and
Bank’s Common Information shall be referred to collectively as “Bank Cardholder
Information”. Bank Cardholder Information might or might not be comprised
exclusively of Bank’s Consumer Personal Information. 

    
      	
               
      

            	 

    

    
      
        
           

          

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    (ii)           Bank
shall provide to AMO monthly one (1) master file extract, initially containing
the information set forth on Schedule 2.8 to the extent such information is
available to and may be shared by Bank, and subject to change by Bank at any
time.  Bank shall also provide to AMO any other Bank Cardholder
Information agreed to by AMO and Bank, to the extent permitted by Applicable Law
and Bank’s privacy and security policies. AMO may use such information in
connection with maintaining and servicing the Accounts; furthermore, AMO may use
it to market its Goods and/or Services or its business in general to the
Cardholders, but in any event only as permitted by Applicable
Law.  The parties recognize that AMO’s efforts related to such
approved purposes might necessitate disclosure of Bank Cardholder Information to
AMO’s vendors and contractors.  Such disclosure shall be permitted,
provided the third-parties agree in writing to use the information only for the
aforementioned approved purposes and to protect the confidentiality of such
information as set forth in Section 10.17.  Except as so provided,
unless Bank consents otherwise in advance and in writing, AMO shall keep such
Bank Cardholder Information confidential as set forth in Section 10.17, and
shall not disclose such information to any third party nor sell, lease, or
otherwise transfer such information to any third party.

    

    (iii)           Notwithstanding
any provision herein to the contrary, except as may be necessary to effectuate a
conversion or sale of the Accounts under Section 9.5 as set forth below, at no
time shall Bank have any right to use any information relating to the Plan, the
Accounts, the Customers or the Cardholders (other than any such information
which satisfies any of clauses (i) through (iv) of Section 10.17(a)) for any
marketing purposes whatsoever other than with respect to the Plan unless it
shall have previously obtained AMO’s consent in writing.  For the
avoidance of doubt, nothing in this clause (iii) shall limit the ability of Bank
to use such information as may be required by Applicable Law.  In
connection with a conversion or sale of the Accounts under Section 9.5, Bank or
the purchaser of the Accounts shall be entitled to market to the Cardholders any
of the programs permitted in connection with a wind up of the Plan under Section
9.5(b)(iii); provided, however, that in so marketing the card, Bank and such
purchaser shall not be entitled to use any sales history or other transaction
history or other information obtained or related to the usage of the Credit Card
which occurred during the operation of the Plan or the Crosstown Traders
Program.  For clarification, once the Cardholders’ Accounts are
converted to non-AMO Accounts in accordance with Section 9.5, then such
Cardholders shall have an independent relationship with Bank and Bank’s use of
information obtained after the conversion date not in violation of this
Agreement, and so long as the same does not constitute Confidential Information
of AMO hereunder, shall not be subject to the restrictions herein.

    

    2.9           Protection Programs and
Enhancement Marketing Services.  (a) Protection Programs. AMO and
Bank agree that Bank will have the exclusive right but not the obligation to
make available to Cardholders* various types of debt cancellation and credit
related protection programs (collectively referred to herein as “Protection
Programs”) offered by Bank.  Commencing February 1, 2009, Bank may but
is not obligated to offer such Protection Programs through direct marketing
channels including but not limited to telemarketing, call transfer (of inbound
calls to Bank and not inbound calls to AMO), inbound customer service call
offers (inbound calls to Bank and not inbound calls to AMO), call to confirm
programs,

    
      
        
           

          

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    IVR, and
eCS.  Bank also has the right but not the obligation to make written
offers through Billing Statement bangtails and inserts Billing Statement
messaging, and direct mail. The fees for Protection Programs will be charged to
the applicable Cardholder’s Account.  AMO will assist Bank’s effort to
offer Protection Programs so long as such assistance will not require AMO to
incur any direct expense or cost.  Bank shall have the right but not
the obligation to immediately terminate any Protection Programs if and when
either party:  (i) terminates this Agreement, (ii) notifies the other
party of an intent to terminate or that the notifying party has already
terminated this Agreement, or (iii) notifies the other of an intent to allow
this Agreement to expire.

    

    *Recognizing that, with regard to
non-Cardholder Customers who have specifically rejected an offer of credit from
Bank (or offer to apply for same), AMO has the right to offer its own debt
cancellation and credit related protection programs and
products.

    

    (b)           Pursuant
and subject to the provisions of this Section 2.9 (b) and Schedule 2.9 (b),
commencing February 1, 2009, AMO shall have the right (but not the obligation)
to market to Customers products and services which are not Protection Programs
and which are sold to Customers by third-party vendors of AMO and not AMO itself
(collectively, “AMO Enhancement Marketing Services”). AMO Enhancement Marketing
Services shall include, but not be limited to, travel clubs, legal services, and
merchandise.  The parties shall also adhere to the provisions set
forth in Schedule 2.9 (b).

    

    (c)           Pursuant
and subject to the provisions of this Section 2.9 (c), AMO’s rights under
Section 2.9 (b) and Schedule 2.9 (b), and AMO’s rights under this Section 2.9
(c) and Schedule 2.9 (c), commencing February 1, 2009 Bank may (but is not
obligated) to solicit Cardholders, through solicitations made in connection with
their Accounts, those products and services (which are not Protection Programs
and not competitive with Goods and/or Services, or AMO Enhancement Marketing
Services, which shall be referred to herein as “Bank Enhancement Marketing
Services”); provided, however, that Bank may not begin to market or sell any
particular AMO Enhancement Marketing Service without AMO’s prior written
approval of such AMO Enhancement Marketing Service (not to be unreasonably
withheld). It shall not be deemed unreasonable for AMO to fail to provide such
approval solely because AMO plans to market competing Goods and/or Services or
AMO Enhancement Marketing Services.  Bank Enhancement Marketing
Services may. include, but not be limited to, travel clubs, legal services,
and merchandise products. Bank may but is not obligated to offer Bank
Enhancement Marketing Services through direct marketing channels including but
not limited to telemarketing, call transfer, inbound customer service call
offers, call to confirm programs, IVR and ECS.  Bank also has the
right but not the obligation to make written offers through Billing Statement
bangtails and inserts, Billing Statement messaging, and direct mail. Bank will
notify AMO of proposed offers through direct mail, telemarketing, statement
inserts, and statement messaging prior to execution.  The charges for
Bank Enhancement Marketing Services will be billed to the applicable
Cardholder’s Account when appropriate.  Bank shall have the right but
not the obligation to immediately terminate any Bank Enhancement Marketing
Services if and when either party:  (x) terminates this Agreement, (y)
notifies the other party of an intent to terminate or that the notifying party
has already terminated this Agreement, or (z) notifies the other of an intent to
allow this Agreement to expire. In addition, Bank shall also adhere to the
requirements set forth on Schedule 2.9 (c). 

    
      
        
           

          

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    2.10                      Ownership and Licensing of
the Party’s Marks.  (a)  Subject to the other
provisions of this Agreement, AMO hereby grants to Bank a non-exclusive (except
as to branded credit account and card plans per Section 3.11), non-transferable
license to use the AMO’s Marks solely in satisfaction of its duties, rights and
obligations described in this Agreement, including without limitation, using
same in any and all promotional materials, Account documentation, advertising,
websites, marketing, and solicitations related to the Plan, during the
Term.  Bank shall use the trademark designations “®” or “TM” or such
other designation as AMO may specify or approve in connection with the AMO’s
Marks on the Credit Cards, Account documentation and promotional
materials.  Bank agrees it will not use the AMO’s Marks on or in
connection with any products or services or for any other purpose other than as
explicitly described in this Agreement except as required by Applicable
Law.  For the avoidance of doubt, Bank may not use AMO’s Marks in
connection with the marketing and sale of any Bank Enhancement Marketing Service
without the prior written consent of AMO.

    

    (b)           Anything
in this Agreement to the contrary notwithstanding, AMO shall retain all rights
in and to AMO Mark pertaining to such Accounts, and all goodwill associated with
the use of AMO Marks (whether under this Agreement or otherwise) shall inure to
the benefit of AMO.  AMO shall have the right, in its sole and
absolute discretion, to prohibit the use of any AMO Marks in any Forms,
advertisements or other materials or references proposed to be used by Bank
which AMO in its reasonable business judgment deems objectionable or
improper.  Bank shall cease all use of AMO Marks upon the termination
of this Agreement for any reason unless Bank retains the Accounts after
termination of the Agreement. In that case, Bank may use AMO Marks solely in
connection with the administration and collection of the balance due on the
Accounts.

    

    (c)           AMO
recognizes that Bank is the sole owner of the Bank Marks, that AMO has no rights
of ownership or license therein, and that AMO is not entitled to (and shall not)
use the Bank’s Marks other than as explicitly and specifically provided in this
Agreement. As a point of clarification, Bank has and retains all rights in and
to Bank’s Marks and the use thereof, and all goodwill associated with the use of
Bank’s Marks (whether under this Agreement or otherwise) shall inure to the
benefit of Bank.  Bank shall have the right, in its sole and absolute
discretion, to prohibit the use of any Bank’s Marks in any Plan Documents,
advertisements, or other materials or references proposed to be used by AMO
which Bank in its reasonable business judgment deems objectionable or
improper.  AMO shall cease all use of Bank’s Marks upon the
termination of this Agreement for any reason.

    

    

    SECTION
3.  OPERATION OF THE
PLAN

    

    3.1           Honoring
Accounts.  AMO agrees that each AMO Business will honor any
Account properly issued and authorized by Bank and bearing an AMO Brand that
corresponds with such AMO Business, as set forth in Appendix A. For example, the
AMO Business “Arizona Mail Order” shall be authorized to honor a properly issued
and authorized Account bearing the AMO Brand “Coward Shoes”, as long as that AMO
Brand remains related to that AMO Business. In addition, as of the Closing Date,
and subject to Schedule 3.1, there shall be Cross Shopping between and amongst
all the AMO Businesses and AMO

    
      
        
           

          

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    Brands.
Furthermore, AMO shall deliver to Bank all Transaction Records evidencing
transactions made under the Plan, in accordance with the provisions of this
Agreement and the Operating Procedures.

    

    3.2           Re-Branding of Accounts with
Lost Utility.  The parties agree that, in the event certain
Accounts (including their corresponding Credit Cards) lose utility with respect
to certain geographic market areas as a result of changes in AMO’s business,
Bank shall have the right to re-brand the Accounts for the affected Cardholders
and issue such Cardholders a replacement or substitute account (including, at
Bank’s discretion, a corresponding card) with such characteristics as Bank
considers appropriate.  Such new accounts (and any corresponding
cards) shall not be part of the Plan nor governed by this Agreement, but also
shall not be issued in connection with any other retailer. Bank shall be
responsible for providing any affected Cardholders with notice of such
changes.  The cost of designing and issuing such new cards shall be
borne by Bank.  Prior to issuing any newly branded accounts for the
AMO Brands or AMO Businesses, Bank shall discuss the matter with
AMO.

    

    3.3           Cardholder Disputes
Regarding Accounts, and Goods and/or Services.  (a) AMO shall
promptly notify Bank regarding any Cardholder dispute regarding an
Account.  This includes but is not limited to claims related to
outstanding balances, Bank reports to credit bureaus, finance charges, fees, and
collection efforts (e.g., notification that the Cardholder has filed bankruptcy
or wants collection communications directed to legal counsel,
etc.).

    

    (b)           AMO
shall act promptly to investigate and work to resolve disputes with Cardholders
regarding Goods and/or Services obtained through AMO pursuant to the
Plan.  AMO shall timely process credits or refunds for Cardholders
utilizing the Plan.

    

    3.4           No Special
Agreements.  AMO will not extract any special agreement,
condition, fee, or security from Cardholders in connection with their use of a
Credit Card, unless approved in advance by Bank in writing.

    

    3.5           Cardholder Disputes
Regarding Violations of Applicable Law.  AMO shall assist Bank
in further investigating and using its reasonable efforts to help resolve any
Applicant or Cardholder claim, dispute, or defense which may be asserted under
Applicable Law.

    

    3.6           Payment to AMO; Ownership of
Accounts; Fees; Accounting.  (a)  Unless otherwise
agreed to by the parties in a written amendment to this Agreement, there shall
be one (1) settlement for all AMO Businesses.  AMO shall
electronically transmit all Transaction Records (from its main offices and/or
its Sales Channels) to Bank within a reasonable period of time and in a format
acceptable to Bank. Upon receipt, Bank shall use commercially reasonable efforts
to promptly verify and process such Transaction Records and, in the time frames
specified herein, Bank will remit to AMO an amount equal to the Net Proceeds
indicated by such Transaction Records for the Credit Sales Day(s) for which such
remittance is made. Bank will transfer funds via Automated Clearing House
(“ACH”) to an account designated in writing by AMO to Bank (the “AMO Deposit
Account”).  The parties recognize and agree that the above referenced
designation may come as part of, and be subject to, a deposit account control
agreement entered into by the parties and one or more third-parties with whom
AMO has a relationship.  If Transaction Records are received by
Bank’s

    
      
        
           

          

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    processing
center before 12 noon Eastern time on a Business Day, Bank will initiate such
ACH transfer no later than 12 noon on the second Business Day
thereafter.  In the event that the Transaction Records are received
after 12 noon Eastern time on a Business Day, then Bank will initiate such
transfer no later than 12 noon on the third Business Day
thereafter.  The term “initiate” shall mean that Bank shall transmit
an ACH file to Bank’s financial institution for settlement on the next Business
Day.

    

    (b)           Bank
shall own all the Accounts under the Plan from the time of establishment, and
except as otherwise provided herein, AMO shall not have any right to any
indebtedness on an Account or to any Account payment from a Cardholder arising
out of or in connection with any Purchases under the Plan.  Effective
upon the delivery of each Charge Slip by AMO to Bank and payment to AMO by Bank
pursuant to Section 3.6(a), AMO shall be deemed to have transferred, conveyed,
assigned and surrendered to Bank all right, title or interest in all such Charge
Slips and in all other rights and writings evidencing such Purchases, if
any.

    

    (c)           All
Transaction Records are subject to review and acceptance by Bank.  In
the event of a computational or similar error of an accounting or record keeping
nature with respect to such Transaction Records, Bank may credit to the AMO’s
Deposit Account or net against the Net Proceeds (as the case may be) the proper
amount as corrected. If the Net Proceeds are insufficient, AMO shall remit the
proper amount to Bank immediately upon written demand.  Upon any such
correction, Bank shall give AMO prompt notice of same, including details of the
discrepancy and correction.

    

    (d)           The
Credit Card Agreement shall initially include the terms and conditions regarding
rates and fees as are set forth in Schedule 3.6 (d) (“Rates and
Fees”).  Bank hereby represents that these Rates and Fees accurately
reflect such rates and fees charged in connection with the Crosstown Traders
Program as of the date hereof.  In connection with its servicing of
the Accounts, Bank may make changes to the Credit Card Agreement on an
individual Account by Account basis and without notice to AMO.  On
other than an Account by Account basis, Bank may make non-Rates and Fees changes
at any time, or as required by Applicable Law, but must provide notice of same
to AMO as is reasonable under the circumstances. With respect to any changes in
the Rates and Fees, Bank will, prior to making any such changes, notify AMO of
such changes and discuss such changes with AMO.

    

    (e)           AMO
shall obtain and maintain at its own expense such Point of Sale terminals, cash
registers, network (electronic communication interchange system), telephone or
other communication lines, software, hardware and other items of equipment as
are necessary for it to request and receive authorizations, transmit Charge Slip
and Credit Slip information, process applications and perform its obligations
under this Agreement. The computer programs and telecommunications protocols
necessary to facilitate communications between Bank and AMO (and/or Bank and
specific Sales Channels, if applicable) shall be determined by Bank from time to
time, subject to reasonable prior notice of any change in such programs,
equipment or protocols.

    

    (f)           AMO
shall be responsible for ensuring that all Promotional Program Purchases are
properly designated as such on the Transaction Record in accordance with Bank’s
instructions.

    
      
        
           

          

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    (g)           Bank
may, if AMO fails to pay Bank any amounts due to Bank pursuant to this Agreement
for more than thirty (30) days after the due date, offset such amounts against
the Net Proceeds or any other amounts owed by Bank to AMO under this
Agreement.

    

    (h)           In
the event either party fails to pay the other party any sum when due hereunder
and such failure continues for ten (10) days after written notice that the same
is past due, interest shall commence to accrue on the unpaid amount at an annual
interest rate equal to twelve percent (12%) per annum from the date such sum was
due until the date the same is paid in full.

    

    

    3.7           Bank Mailings; Insertion of
AMO’s Promotional Materials.  Envelope space (including
bangtail) for Billing Statements and Credit Card mailers shall be allocated as
follows:

    

    (a)           “Priority
Materials”, defined as: legally required material, privacy notices, disclosures,
Cardholder notices, Billing Statements, new Credit Card mailers, Credit Card
Agreement, and notices sent by Bank;

    

    (b)           Bank’s
other inserts (including bangtail).

    

    (c)           AMO’s
promotional materials, subject to the following terms:

    

    At AMO’s
request, Bank will include with the Billing Statements and new Credit Card
mailers AMO promotional materials (including those relating to AMO Enhancement
Marketing Services described in Schedule 2.9 (b)) provided by AMO (which
promotional materials shall be prepared and provided to Bank or its vendor at
AMO’s expense), so long as the materials:  (i) are provided to Bank at
least thirty (30) days prior to the scheduled mailing date of such statements or
notices and pursuant to an insert schedule that AMO provided to Bank at least
sixty (60) days in advance; (ii) have been approved as to content by Bank (in
its reasonable discretion) with respect to any manner of reference to Bank or
the Plan; (iii) meet all size, weight, or other specifications for such inserts
as shall be reasonably set by Bank from time to time; (iv) would not require the
removal (in Bank’s standard envelope) of Priority Materials and/or Bank’s other
inserts; and (v) are paid for by AMO, along with all additional postage
costs caused by Bank’s insertion of such materials.  Notwithstanding
the immediately preceding sentence, Bank must provide AMO reasonable advance
notice of any such additional postage charge.  Furthermore, Bank shall
only insert AMO materials (and charge such additional expense to AMO) if AMO
approves such insertion regardless of the additional postage
costs.  In addition to paying for the costs and expenses of the
promotional materials and additional postage expenses as set forth above AMO
shall pay Bank an insert fee for any AMO promotional materials inserted in
accordance with this Section 3.7 in an amount equal to $0.02 per billing
statement in which such insertion is inserted.  Bank hereby represents
that the foregoing accurately represents the actual costs incurred by Bank in
performing the insertions as of the date hereof.

    

    Bank
reserves the right to disallow any inserts which are in violation of Applicable
Law, conflict with any other provision of this Agreement, or whose subject
matter is reasonably deemed by Bank to be salacious in nature.

    
      
        
           

          

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    3.8           Payments.  All
payments to be made by Cardholders with respect to any amounts outstanding on
the Accounts shall be made in accordance with the instructions of Bank and at
the location or address specified by Bank.  AMO hereby authorizes
Bank, or any of its employees or agents, to endorse “Spirit of America National
Bank” upon all or any checks, drafts, money orders or other evidence of payment,
made payable to AMO and intended as payment on an Account, that may come into
Bank’s possession from Cardholders and to credit said payment against the
appropriate Cardholder’s Account.  Bank has the sole right to receive
and retain all payments made with respect to all Accounts and to pursue
collection of all amounts outstanding, unless a Purchase is charged back to AMO
pursuant to the provisions of Section 3.9 and 3.10.

    

    3.9           Chargebacks.  Bank
shall have the right to charge back AMO the amount of any Purchase, including
the unpaid principal balance, applicable sales tax, accrued and billed finance
charges, fees, charges and any of such amounts written off by
Bank.  

    

    (a)           If
any Applicant or Cardholder claim, defense, dispute, or basis for non-payment is
based on an alleged action or inaction by AMO and/or otherwise involves the
Goods and/or Services, including but not limited to an alleged: (i) breach of
warranty or representation; (ii) unauthorized use of the Credit Card; (ii)
charge for something other than an actual Purchase; (iii) the Charge Slip
related to the Purchase is a duplicate of one already paid and/or the price on
it differs from the price on the Cardholder’s copy of same; and/or (Bank’s
determination, upon receipt of a fraud affidavit from the Cardholder, that the
signature on any Charge Slip has been forged or is counterfeit; or

    

    (b)           If
Bank determines that, with respect to such Purchase or the Account
that:  (i) there is a breach of any warranty or representation
made by or with respect to AMO under this Agreement; (ii) there is a failure by
AMO to comply with any term or condition of this Agreement, which failure shall
not have been cured within fifteen (15) days after receipt of written notice
thereof from Bank; or (iii) after; or

    

    (c)           For
any chargeback reason as set forth in the Operating Procedures.

    

    3.10                      Exercise of
Chargebacks.  With respect to any amounts to be charged back
pursuant to Section 3.9, Bank will offset such amount as part of the Net
Proceeds to be paid to AMO, to the extent the balance thereof is sufficient or
Bank may demand payment from AMO in immediately available funds for the full or
any partial amount of such chargeback.  Upon payment in full of the
related amount by AMO to Bank, or off-setting, as the case may be, Bank shall
transfer to AMO, without any representation, warranty or recourse, all of Bank’s
right to payments of such amounts charged back in connection with such
Purchase.  Bank will exercise commercially reasonable efforts to
cooperate with AMO in any efforts by AMO to collect the chargeback
amount.  Bank may reduce the amount owed by a Cardholder on any
Purchase subject to chargeback, but the related chargeback shall then be equal
to the reduced (or net) amount owed by the Cardholder.  AMO shall not
resubmit or re-transmit any charged back Purchase to Bank, without Bank’s prior
written consent.

    

    3.11                      Non-Competition.  (a)
AMO shall actively and consistently market, promote, participate in and support
the Plan as set forth in this Agreement. Furthermore, except as

    
      
        
           

          

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    otherwise
provided in subsections (b), (c) and (d) below, AMO agrees that, in
consideration of and as an inducement for Bank to make the Plan available to AMO
as provided in this Agreement, AMO (including its Affiliates) shall not, either
on its own or under contract or in concert with any third party, establish,
provide, own, accept or process any (i) “private label” or “co-brand” revolving
credit card, (ii) debit card that is  “branded” (with an AMO Mark or
other mark related to or for the promotion of AMO and/or its Affiliates); or
(iii) other Financial Product.

    

    (b)           Notwithstanding
the provisions set forth in subsection (a) above or elsewhere in this Agreement,
nothing contained in this Agreement will be construed to prohibit or prevent AMO
from accepting (i) any Card Association credit account and/or card that is not
“branded”; (ii) any form of Card Association debit account and/or card that is
not “branded”; or (iii) any fixed payment (installment) credit programs for
Applicants declined by Bank.

    

    (c)           The
prohibitions set forth in subsection (a) will not apply: (i) as to a particular
state after Bank has terminated the operation of the Plan in such state pursuant
to Section 9.4; (ii) after termination or expiration of this Agreement, or (iv)
in cases where AMO is exercising its rights under Section 3.14 of this
Agreement.

    

    (d)           Following
the earlier to occur of January 31, 2009 or the date the WFNNB Account Portfolio
Purchase/Sale Agreement is terminated, if the sale under the WFNNB Account
Portfolio Purchase/Sale Agreement has not closed, Bank hereby acknowledges and
agrees that AMO shall be permitted to enter into a Program Agreement at any time
thereafter and its actions in connection therewith shall in no circumstances be
deemed to violate, or be limited or restricted by, this
Section 3.11.

    

    (e)  See also Schedule
3.11.

    

    3.12                      Postage.  If
during the Term Bank’s aggregate cost of mailing Billing Statements, form
letters, or Credit Cards (including card mailers) increases due to an increase
in postage cost implemented by the United States Postal Service, the following
provisions shall apply.  The parties shall evenly share any cost
increase. Adjustments will be made for any subsequent decreases in the cost of
postage.  Bank will use commercially reasonable efforts to obtain the
best bulk rate discount for Plan related mailings.

    

    3.13                      Reports.  Bank
will deliver to AMO the reports set forth in Schedule 3.13, as specified therein
and to the extent information is available and applicable.  Bank may
provide any additional reports requested by AMO upon such terms and conditions
(including cost) as are mutually agreed to by the parties.

    

    3.14                      New Businesses and Existing
Credit Program Conversions. 

    

    

    (a)           No Other AMO
Obligations.  (AMO shall have no obligation to (1) include in
the Plan any credit card portfolios acquired in connection with any merger,
consolidation, acquisition or other transaction; (2) otherwise cause such
portfolios to be transferred to Bank; or (3) otherwise transfer any such
portfolios to Bank.  The non-competition provisions set

    
      
        
           

          

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    forth in
Section 3.11 shall not apply to the ownership and/or administration of
accounts described in this Section 3.14, nor any additional accounts related
thereto.

    

    (b)           See also Schedule
3.11.

    

    SECTION
4.  REPRESENTATIONS AND
WARRANTIES OF AMO

    

    AMO
hereby represents and warrants to Bank as follows:

    

    4.1           Organization, Power and
Qualification.  As of the date of execution of this Agreement
and as of the Closing, AMO is duly organized, validly existing and in good
standing under the laws of its formation or organization and has full power and
authority to enter into this Agreement and to carry out the provisions of this
Agreement.  As of the date of execution of this Agreement and as of
the Closing, AMO is duly qualified and in good standing to do business in all
jurisdictions where located and/or conducting business, except where the failure
to be so qualified would not have a material adverse effect on AMO’s business,
AMO’s or Bank’s ability to perform as required under this Agreement, or
operation of the Plan.

    

    4.2           Authorization, Validity and
Non-Contravention.  As of the date of execution of this
Agreement and as of the Closing:

    

    (a) This
Agreement has been duly authorized by all necessary corporate proceedings (or
analogous governing proceedings).  Further, this Agreement has been
duly executed and delivered by AMO, and is a valid and legally binding agreement
of AMO and duly enforceable in accordance with its terms (except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors’ rights generally and by
general equity principles).

    

    (b)           No
consent, approval, authorization, order, registration or qualification of or
with any court or regulatory authority or other governmental body having
jurisdiction over AMO is required for (nor would the absence of such adversely
affect) the legal and valid execution and delivery of this Agreement, and the
performance of the transactions contemplated by this Agreement.

    

    (c)           The
execution and delivery of this Agreement by AMO and the compliance by AMO with
all provisions of this Agreement:  (i) will not conflict with or
violate any Applicable Law; and (ii) will not conflict with or result in a
breach of or default under any of the terms or provisions of any indenture, loan
agreement, or other contract or agreement to which AMO is a party (including but
not limited to any under which AMO is an obligor or by which its property is
bound) where such conflict, breach or default would have a material adverse
effect on AMO or the Plan, nor will such execution, delivery or compliance
violate or result in the violation of the Articles of Incorporation or By-Laws
(or analogous rules of governance) of AMO.

    

    4.3           Accuracy of
Information.  All factual information furnished by AMO to Bank
in writing at any time pursuant to any requirement of, or furnished in response
to any written request of Bank under this Agreement or any transaction
contemplated hereby has been,

    
      
        
           

          

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    and all
such factual information hereafter furnished by AMO to Bank will be, to AMO’s
best knowledge and belief, true and accurate in every respect material to the
transactions contemplated hereby on the date as of which such information was or
will be stated or certified.

    

    4.4           Validity of Charge
Slips.  (a)  As of the date any Transaction Records
are presented to Bank in accordance with the provisions of this Agreement, each
Charge Slip relating to such Transaction Records shall represent the obligation
of a Cardholder in the respective amount set forth therein for Goods sold or
Services rendered, together with applicable taxes, if any, and shall not involve
any element of credit for any other purpose.

    

    (b)           As
of the date any Transaction Records are presented to Bank in accordance with the
provisions of this Agreement, AMO has no knowledge or notice of any fact or
matter which would immediately or ultimately impair the validity of any Charge
Slip relating to such Transaction Records, the transaction evidenced thereby, or
its collectability.

    

    4.5           Compliance with
Law.  AMO’s conduct of its business, including but not limited
to sales of Goods and/or Services and compliance with its obligations under the
Plan, is in compliance with all Applicable Law, including but not limited to not
engaging in: the sale of any illegal goods and/or services, the illegal sale of
otherwise legal goods and/or services, and sales in violation of federal and
state laws designed to prevent unlawful gambling, except where the failure to
comply individually or in the aggregate, does not or will not have a material
adverse effect on AMO, Bank or the Plan.

    

    4.6           AMO’s
Marks.  AMO has the legal right to use and to permit the Bank
to use, to the extent set forth herein, AMO Marks.

    

    4.7           Intellectual Property
Rights.  In the event AMO provides any software or hardware to
Bank, AMO has the legal right to such software or hardware and the right to
permit Bank to use such software or hardware, and such use shall not violate any
intellectual property rights of any third party.  Any software,
hardware or technology provided by or on behalf of AMO is without warranty of
merchantability or warranty of fitness for any particular use, and is provided
“AS-IS”, but nothing in this Section 4.7 shall relieve AMO of its obligations
set forth elsewhere in this Agreement with respect to the performance of its
systems and operations.  Any software or other technology developed by
or for AMO or its Affiliates, to facilitate the Plan, including but not limited
to, software and software modifications developed in response to Bank’s request
or to accommodate Bank’s special requirements and all derivative works,
regardless of the developer thereof, will remain the exclusive property of AMO
and/or its Affiliates.  Nothing in this Agreement shall be deemed to
convey a proprietary interest to Bank or any third party in any of the software,
hardware, technology or any of the derivative works thereof which are owned or
licensed by AMO and/or its Affiliates, and Bank shall return to AMO all
materials containing such intellectual property upon termination of this
Agreement.

    

    4.8           WFNNB Program
Agreement.  AMO has entered into the WFNNB Program Agreement
with World Financial Network National Bank and the same is in full force and
effect on the date hereof and constitutes the legal and binding obligation of
AMO and, to

    
      
        
           

          

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    AMO’s
knowledge, World Financial Network National Bank.  The anticipated
Conversion Date under the WFNNB Program Agreement is on or before October 31,
2008.

    

    SECTION
5.  COVENANTS OF
AMO

    

    AMO
hereby covenants and agrees as follows:

    

    5.1           Notices of
Changes.  AMO will as soon as reasonably possible notify Bank
of any:  (a) change in the name or form of business organization of
AMO, change in the location of its chief executive office or the location of the
office where its records concerning the Plan are kept; (b) merger or
consolidation of AMO, the sale of a significant portion of its stock (or other
form of ownership) or  the sale of a substantial amount of its assets
not in the ordinary course of business, or any change in the control of AMO; (c)
material adverse change in its financial condition or operations; (d) the
planned opening or closing of any Sales Channels (including individual AMO
Businesses); (e) any change in business practices of AMO that would have a
material adverse effect on this Agreement or the Plan; or (f) any occurrence
that would constitute a Bank Termination Event under Section 9.2.  AMO
will furnish such additional information with respect to any of the foregoing as
Bank may reasonably request, for the purpose of Bank’s evaluating the effect of
such change on the financial condition and operations of AMO and on the
Plan.  Prior to the earliest to occur of (x) February 1, 2009, (y) the
closing under the WFNNB Account Portfolio Purchase/Sale Agreement and (z) the
date of termination of the WFNNB Account Portfolio Purchase/Sale Agreement, AMO
shall not discontinue or sell any Sales Channels or AMO Businesses (except that
AMO shall have the right, in its sole discretion, to discontinue or sell all or
any portion of the Lew-Magram Brand and/or Lew-Magram Business).

    

    5.2           Conversion.  AMO
shall use commercially reasonable good faith efforts to comply with the
Conversion Plan (as such Conversion Plan may modified by the parties in
accordance with Section 2.1(a)) and AMO shall not agree to any amendment or
modification of the WFNNB Program Agreement which would reduce World Financial
Network National Bank’s obligations with respect to the Conversion or extend or
delay the Conversion Date (as such term is defined in the WFNNB Program
Agreement) beyond January 31, 2009.   AMO shall request that
World Financial Network National Bank comply with its obligations under the
WFNNB Program Agreement with respect to the Conversion.

    

    5.3           Access
Rights.  Subject to (b) below, AMO will permit, once per Plan
Year unless Bank has reasonable cause to do so more than once, authorized
representatives designated by Bank, at Bank’s expense, to visit its facilities
and inspect, to the extent permitted by Applicable Law, any of the books and
records of AMO and/or its Sales Channels pertaining to Applicants, Accounts,
Transaction Records and any category of payments owed by one party to the other,
and to make copies and take extracts there from, and to discuss the same with
its officers and independent public accountants, all at reasonable times during
normal business hours.  In addition, AMO shall permit regulatory
bodies having jurisdiction over Bank to visit its facilities related to the Plan
during normal business hours with advance notice.

    

    (b)           AMO’s
obligations under (a) shall not be required to the extent that (i) such access
is prohibited by Applicable Law, (ii) such records are legally privileged, or
(iii) such

    
      
        
           

          

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    records
are AMO planning documents or those of any of its Affiliates, operating budgets,
management reviews or employee records.

    

    5.4           AMO’s
Business.  AMO shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
(or analogous business form) and to comply with all Applicable Laws in
connection with its business and the sale of Goods and/or Services, including,
but not limited to: (i) compliance with all applicable license requirements
related to its business, and (ii) fulfilling its obligations under the
Plan.  AMO shall provide to Bank, annually, a forecast of the next
year in terms of AMO’s total sales, number of catalog mailings (in aggregate and
by Brand), and expansion or contraction of any Sales Channels.

    

    5.5           Insurance.  AMO
shall maintain insurance policies with insurers, and in such amounts and against
such types of loss and damage, as are customarily maintained by other companies
engaged in similar businesses within AMO’s industry.

    

    5.6           Sales
Information.  AMO shall furnish to Bank on a quarterly
basis a report showing AMO’s total sales of Goods and/or
Services, categorized by tender type.

    

    5.7           Business
Continuation/Disaster Recovery Plan.  AMO shall maintain a plan
designed to mitigate damages resulting from Force Majeure or other causes that
would threaten operation of AMO’s business and/or loss or exposure of
information requiring protection as described in Sections 2.8 and
10.17.

    

    5.8           Compliance with Agreement
and Operating Procedures.  AMO shall use commercially
reasonable efforts to ensure that its Affiliates, licensees, franchises,
officers, directors, associates and agents comply with the terms of this
Agreement and the Operating Procedures.

    

    5.9           Compliance with Program
Agreement and Conversion.  AMO will comply with its obligations
under any Program Agreement and will use its commercially reasonable efforts to
cooperate with Bank and the Program Provider in facilitating the
Conversion.  AMO shall use its commercially reasonable efforts to
perform its obligations under the Conversion Plan and acknowledges that, in
connection with the Conversion, AMO will not request or require any system
interface elements beyond those set forth in the Conversion Plan.

    

    5.10                      Program Assets Sale
Agreement.  If the WFNNB Account Portfolio/Sale Agreement is
terminated, AMO and Bank shall endeavor in good faith until the expiration of
the Term, or earlier termination of this Agreement in accordance with its terms
to identify an Approved Replacement Purchaser with which Bank shall enter into
an Account Portfolio/Sale Agreement (and Bank agrees to enter into an Account
Portfolio/Sale Agreement with an Approved Replacement Purchaser) in form and
substance reasonably acceptable to AMO and Bank, it being understood that an
Account Portfolio/Sale Agreement shall be deemed to be reasonably acceptable to
Bank so long as it contains terms that in the aggregate are not materially less
favorable to Bank than those contained in the WFNNB Account Portfolio/Sale
Agreement; provided that if such Account Portfolio/Sale Agreement provides for
(i) a sale to an Approved Replacement Purchaser for a purchase price of less
than 100% but greater than 80% of the aggregate Account Balances of the Accounts
transferred thereunder (other

    
      
        
           

          

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    than with
respect to any Ineligible Accounts) and (ii) AMO agrees to pay to Bank an amount
equal to 50% of the shortfall between (x) the actual purchase price and (y) 100%
of the aggregate Account Balances of the Accounts transferred thereunder (other
than with respect to any Ineligible Accounts), up to a cap of 10% of such
aggregate Account Balances, then the purchase price under such Account
Portfolio/Sale Agreement shall be deemed to be not materially less favorable to
Bank than the purchase price contained in the WFNNB Account Portfolio/Sale
Agreement and the purchase price shall be deemed reasonably satisfactory to
Bank; provided, however if the Approved Replacement Purchaser is World Financial
Network National Bank, any investment fund managed by Golden Gate Private
Equity, Inc., Orchard Brands Corporation, or any of their respective affiliates
or subsidiaries, then, unless Bank otherwise agrees, the Account Portfolio/Sale
Agreement shall not be deemed reasonably acceptable to Bank unless the purchase
price is 100% of the aggregate Account Balances of the Accounts transferred
thereunder (other than with respect to any Ineligible Accounts).  In
addition, in such event, Bank and AMO shall also endeavor in good faith until
the expiration of the Term or earlier termination of this Agreement in
accordance with its terms to identify a Program Provider with which AMO shall
enter into a Program Agreement reasonably acceptable to AMO (it being agreed
that such Program Agreement shall be deemed to be reasonably acceptable to AMO
if it contains terms which in the aggregate are not materially less favorable to
AMO than those contained in the WFNNB Program Agreement).

    

    

    SECTION
6.  REPRESENTATIONS AND
WARRANTIES OF BANK

    

    Bank
hereby represents and warrants to AMO as follows:

    

    6.1           Organization, Power and
Qualification.  As of the date of execution of this Agreement
and as of the Closing, Bank is a national banking association, duly organized,
validly existing and in good standing under the laws of the United States of
America and has full power and authority to enter into this Agreement and to
carry out the provisions of this Agreement.  As of the date of
execution of this Agreement and as of the Closing, Bank is duly qualified and in
good standing to do business in all jurisdictions where such qualification is
necessary for Bank to carry out its obligations under this
Agreement.

    

    6.2           Authorization, Validity and
Non-Contravention.  As of the date of execution of this
Agreement and as of the Closing,

    

    (a) This
Agreement has been duly authorized by all necessary proceedings, has been duly
executed and delivered by Bank and is a valid and legally binding agreement of
Bank and duly enforceable in accordance with its terms (except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors’ rights generally and by
general equity principles).

    

    (b)           No
consent, approval, authorization, order, registration or qualification of or
with any court or regulatory authority or other governmental body having
jurisdiction over Bank is required for (nor would the absence of such materially
adversely affect) the legal and valid execution and delivery of this Agreement,
and the performance of the transactions contemplated by this
Agreement.

    

    
      
        
           

          

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    (c)           The
execution and delivery of this Agreement by Bank hereunder and the compliance by
Bank with all provisions of this Agreement:  (i) will not conflict
with or violate any Applicable Law; (ii) will not conflict with or result in a
breach of the terms or provisions of any indenture, loan agreement or other
contract or agreement to which Bank is a party (including but not limited to any
under by which Bank’s property is bound) where such conflict, breach or default
would have a material adverse effect on Bank, nor will such execution, delivery
or compliance violate or result in the violation of the Charter or By-Laws of
Bank.

    

    6.3           Accuracy of
Information.  All factual information furnished by Bank to AMO
in writing at any time pursuant to any requirement of, or furnished in response
to any written request of AMO under this Agreement or any transaction
contemplated hereby has been, and all such factual information hereafter
furnished by Bank to AMO will be, to Bank’s best knowledge and belief, true and
accurate in every respect material to the transactions contemplated hereby on
the date as of which such information has or will be stated or
certified.

    

    6.4           Compliance with
Law.  As of the date of execution, Bank’s conduct of its
business is in compliance with all Applicable Law, except where the failure to
comply individually or in the aggregate, does not or will not have a material
adverse effect on AMO, Bank or the Plan.

    

    6.5           Intellectual Property
Rights.  In the event Bank provides any software or hardware to
AMO, Bank has the legal right to such software or hardware and the right to
permit AMO to use such software or hardware, and such use shall not violate any
intellectual property rights of any third party.  Any software,
hardware or technology provided by or on behalf of Bank is without warranty of
merchantability or warranty of fitness for any particular use, and is provided
“AS-IS”, but nothing in this Section 6.5 shall relieve Bank of its obligations
set forth elsewhere in this Agreement (including but not limited to Section 2
and Section 3 with respect the performance of its systems and
operations.  Any software or other technology developed by Bank or its
Affiliates or developed for Bank or its Affiliates at Bank’s expense, to
facilitate the Plan, including but not limited to, software and software
modifications developed in response to AMO’s request or to accommodate AMO’s
special requirements and all derivative works, regardless of the developer
thereof, will remain the exclusive property of Bank and/or its
Affiliates.  Nothing in this Agreement shall be deemed to convey a
proprietary interest to AMO or any third party in any of the software, hardware,
technology or any of the derivative works thereof which are owned or licensed by
Bank and/or its Affiliates, and AMO shall return to Bank all materials
containing such intellectual property upon termination of this
Agreement.

    

    6.6           WFNNB Account Portfolio
Purchase/Sale Agreement.  Bank has entered into the WFNNB
Account Portfolio Purchase/Sale Agreement with World Financial Network National
Bank and the same is in full force and effect on the date hereof and constitutes
the legal and binding obligation of Bank and, to the knowledge of Bank, World
Financial Network National Bank.

    

    
      
        
           

          

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    SECTION
7.  COVENANTS OF
BANK

    

    Bank
hereby covenants and agrees as follows:

    

    7.1           Notices of
Changes.  Bank will as soon as reasonably possible notify AMO
of any:  (a) change in the name or form of business organization of
Bank, change in the location of its chief executive office or the location of
the office where its records concerning the Plan are kept; (b) merger or
consolidation of Bank or the sale of a significant portion of its stock or of
any substantial amount of its assets not in the ordinary course of business or
any change in the control of Bank; (c) material adverse change in its financial
condition or operations; or (d) litigation, whether actual, pending or
threatened, which would have a material adverse effect on the Plan or on Bank’s
ability to fulfill any of its obligations hereunder or thereunder. Bank will
furnish such additional information with respect to any of the foregoing as AMO
may request for the purpose of evaluating the effect of such transaction on the
financial condition and operations of Bank and on the Plan.

    

    7.2.           Intentionally
Omitted.

    

    7.3           Access
Rights.  Subject to (b) below, Bank will permit, once per Plan
Year unless AMO has reasonable cause to do so more than once, authorized
representatives designated by AMO, at AMO’s expense, to visit its facilities
and  inspect, to the extent permitted by Applicable Law, any of Bank’s
books and records pertaining to Purchases and any category of payments owed by
one party to the other, and to make copies and take extracts there from, and to
discuss the same with its officers and independent public accountants, all at
reasonable times during normal business hours.  Bank shall permit AMO,
once per Plan Year, during normal business hours and upon reasonable notice, and
in a manner which does not disrupt the operations, to visit the offices at which
services relating to the Plan are provided, to review the activities of Bank and
its subcontractors.

    

    (b)           Bank’s
obligations under (a) shall not be required to the extent that (i) such access
is prohibited by Applicable Law, (ii) such records are legally privileged, (iii)
such records are Bank planning documents or those of any of its Affiliates,
operating budgets, management reviews or employee records, or (iv) such records
relate to other clients of, or credit programs operated by, Bank.

    

    7.4           Bank’s
Business.  Bank shall do or cause to be done all things
necessary to preserve and keep in full force and affect its corporate existence
and to comply with all Applicable Laws in connection with its business and the
issuance of credit by Bank.

    

    7.5           Insurance.  Bank
shall maintain insurance policies with insurers and in such amounts and against
such types of loss and damage as are customarily maintained by other banks
engaged in similar businesses as Bank.

    

    7.6           Business
Continuation/Disaster Recovery Plan.  Bank shall maintain a
plan designed to mitigate damages resulting from Force Majeure or other causes
that would threaten operation of Bank’s business and/or loss or exposure of
information requiring protection as described in Sections 2.8 and
10.17.

    

    
      
        
           

          

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    7.7           Compliance with
Law.  Any action or inaction taken by Bank (where Bank has a
duty to act) in connection with the Plan shall be in compliance with all
Applicable Law except where the failure to so comply does not or will not have
an adverse effect on the Bank, AMO or the Plan.

    

    7.8           
Termination of WFNNB
Account Portfolio Purchase/Sale Agreement; Termination of WFNNB Program
Agreement.

    

    (i) Bank
shall not (i) extend the “Transfer Date” (as such term is defined in the WFNNB
Account Portfolio Purchase/Sale Agreement) beyond January 31, 2009 or (ii)
otherwise amend, waive, supplement or modify the WFNNB Account Portfolio
Purchase/Sale Agreement in any manner that would reasonably be expected to
materially adversely affect AMO or its Affiliates (including, after the Closing,
Norm Thompson Outfitters Inc.), in each case, without the prior written consent
of AMO.  If the WFNNB Account Portfolio Purchase/Sale Agreement is
terminated, Bank and AMO shall endeavor in good faith until the expiration of
the Term or earlier termination of this Agreement in accordance with its terms
to execute an Account Portfolio Purchase/Sale Agreement with an Approved
Replacement Purchaser which is in a form reasonably acceptable to AMO and Bank
and contains terms that in the aggregate are not materially less favorable to
Bank than those contained in the WFNNB Account Portfolio Purchase/Sale Agreement
as set forth in Section 5.10.  Any sale pursuant to such Account
Portfolio Purchase/Sale Agreement entered into with an Approved Replacement
Purchaser shall be subject to the payment provisions set forth in the proviso to
Section 5.10.

    

    (ii)  In
connection with the termination of this Agreement on account of a Conversion,
Bank shall use commercially reasonable efforts to assist AMO with the transition
of the Plan to a Program Provider pursuant to a Program Agreement reasonably
acceptable to AMO.  In connection therewith, Bank shall be responsible
for the items set forth as Bank’s obligations under the Conversion Plan
including the cost of transitioning the Plan from the current processing system
utilized by Bank to such Program Provider (it being agreed that Bank shall not
be responsible for any of such Program Provider’s costs in connection
therewith), but excluding any expenses incurred in the transition or development
of information technology systems that allow AMO to interface with such Program
Provider.

    

    SECTION
8.  INDEMNIFICATION

    

    8.1           Indemnification
Obligations.  (a) AMO shall be liable to and shall indemnify
and hold harmless Bank and its Affiliates and their respective officers,
directors, employees, subcontractors and their successors and assigns
(collectively “Bank Indemnified Parties”) from any and all Losses (as
hereinafter defined) incurred by them by reason of:  (i) AMO’s breach
of any representation, warranty or covenant hereunder; (ii) AMO’s failure to
perform its obligations hereunder; (iii) any property damage or personal injury
damage caused by or related to Goods or Services charged to an Account; (iv) any
action or failure to act (where there was a duty to act) by AMO related to the
Plan and/or as otherwise provided for in this Agreement; (v) AMO having caused
Losses to third parties, where such third parties have sought recovery from Bank
Indemnified Parties; and (vi) Bank’s defending against claims described in
(v).  In any case, AMO’s liability does not extend to Losses
proximately arising from an act or failure to act by Bank Indemnified
Parties.

    
      
        
           

          

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    (b)           Bank
shall be liable to and shall indemnify and hold harmless AMO and its Affiliates
and their respective officers, directors, employees, sub-contractors and their
successors and assigns (collectively, “AMO Indemnified Parties”) from any and
all losses incurred by reason of:  (i) Bank’s breach of any
representation, warranty or covenant hereunder; (ii) Bank’s failure to perform
its obligations hereunder; and (iii) any action or failure to act (where there
was a duty to act) by Bank and its officers, directors, and employees relating
to the Plan and/or as otherwise provided for in this Agreement;
(iv)  Bank having caused Losses to third-parties, where such
third-parties have sought recovery from AMO Indemnified Parties; and (v) Bank’s
defending against claims described in (iv).  In any case, Bank’s
liability does not extend to Losses proximately arising from an act or failure
to act by AMO Indemnified Parties.

    

    (c)           For
purposes of this Section 8.1 the term “Losses” shall mean any liability, damage,
costs, fees, losses, judgments, penalties, fines, and expenses, including
without limitation, any reasonable attorneys’ fees, disbursements, settlements
(which require the other party’s consent which shall not be unreasonably
withheld), and court costs, reasonably incurred by Bank, AMO, or a third party,
as the case may be, without regard to whether or not such Losses would be deemed
material under this Agreement; provide however, that Losses shall not include
any overhead costs that either party would normally incur in conducting its
everyday business.

    

    8.2           LIMITATION ON
LIABILITY.  (a)  IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, PUNITIVE, SPECIAL OR
CONSEQUENTIAL DAMAGES THE OTHER PARTY INCURS OR CLAIMS TO HAVE INCURRED ARISING
OUT OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT THIS LIMITATION SHALL NOT APPLY
WITH RESPECT TO A PARTY’S INTENTIONAL BREACH OF THIS AGREEMENT.

    

    (b)           BANK’S
TOTAL ANNUAL LIABILITY TO AMO FOR ALL DAMAGES INCURRED BY IT, FOR ANY CAUSE
WHATSOEVER DURING ANY CALENDAR YEAR OF THE TERM OF THIS AGREEMENT, SHALL NOT
EXCEED ONE MILLION DOLLARS ($1,000,000.00).  BANK’S TOTAL CUMULATIVE
LIABILITY TO AMO FOR ALL DAMAGES INCURRED BY IT, FOR ANY CAUSE WHATSOEVER, SHALL
NOT EXCEED FIVE MILLION DOLLARS ($5,000,000.00); PROVIDED, HOWEVER, THAT THIS
LIMITATION SHALL NOT APPLY WITH RESPECT TO BANK’S INTENTIONAL BREACH OF THIS
AGREEMENT OR TO BANK’S OBLIGATION TO PAY ANY SPECIFIC AMOUNTS DUE AMO AS
SPECIFIED UNDER THIS AGREEMENT (SUCH AS NET PROCEEDS, ETC.).

    

    (c)           AMO’S
TOTAL ANNUAL LIABILITY TO BANK FOR ALL DAMAGES INCURRED BY IT, FOR ANY CAUSE
WHATSOEVER OCCURRING DURING ANY CALENDAR YEAR OF THE TERM OF THIS AGREEMENT,
SHALL NOT EXCEED ONE MILLION DOLLARS ($1,000,000.00).  AMO’S TOTAL
CUMULATIVE LIABILITY TO BANK FOR ALL DAMAGES IT INCURS, FOR ANY CAUSE
WHATSOEVER, SHALL NOT EXCEED FIVE MILLION DOLLARS ($5,000,000.00); PROVIDED,
HOWEVER, THAT THIS LIMITATION SHALL NOT APPLY WITH RESPECT TO AMO’S INTENTIONAL
BREACH OF THIS AGREEMENT OR TO AMO’S OBLIGATION TO PAY ANY SPECIFIC AMOUNTS
DUE

    
      
        
           

          

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    BANK AS
SPECIFIED UNDER THIS AGREEMENT (SUCH AS CHARGEBACKS, DISCOUNT FEES, INSERT FEES,
ETC.).

    

    8.3           NO
WARRANTIES.  EXCEPT AS PROVIDED HEREIN, THERE ARE NO EXPRESS OR
IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, RESPECTING THE SERVICES AND/OR OTHER PRODUCTS
SOLD OR PROVIDED BY BANK PURSUANT TO THIS AGREEMENT.

    

    8.4           Notification of
Indemnification; Conduct of Defense.  (a) In no case shall the
indemnifying party be liable under Section 8.1 of this Agreement with respect to
any claim or claims made against the indemnified party or any other person so
indemnified unless it shall be notified in writing of the nature of the claim
within a reasonable time after the assertion thereof. However, failure to so
notify the indemnifying party shall not relieve it from any liability which it
may have under other provisions of this Agreement, except to the extent that the
indemnifying party’s right to defend the matter is materially and irrevocably
prejudiced by such failure to give prompt notice.

    

    (b)           The
indemnifying party shall be entitled to participate, at its own expense, in the
defense of any suit brought against the indemnified party which gives rise to a
claim against the indemnifying party.  Alternatively, the indemnified
party may elect to assume defense of such claim, but must do so within a
reasonable time after receiving notice of the claim.  However, if the
indemnifying party so elects to assume the defense, such defense shall be
conducted by counsel chosen by the indemnifying party  and approved by
the indemnified party (or the person or persons so indemnified, who are the
defendant or defendants in any suit so brought), which approval shall not be
unreasonably withheld.  Once the indemnifying party has retained
counsel approved by the indemnifying party, the indemnified party (or the person
or persons so indemnified who are the defendant or defendants in the suit),
shall bear the fees and expenses of any additional counsel it chooses to
retain.

    

    SECTION
9.  TERM,
EXPIRATION AND TERMINATION

    

    9.1           Term and
Expiration.  Upon execution by authorized representatives of
both parties, and unless terminated as provided herein, this Agreement shall
become effective as of the date hereof and remain in effect until the earlier to
occur of (x) the Conversion Date and (y) January 31, 2010 (such period, the
“Term”).

    

    9.2           Termination with Cause by
Bank; Bank Termination Events.  Any of the following conditions
or events shall constitute a “Bank Termination Event” hereunder, and Bank may
terminate this Agreement immediately if such a Bank Termination Event occurs by
providing written notice of such decision to AMO setting forth Bank’s reason for
termination and the effective date of termination:

    

    (a)           If
AMO shall:  (i) generally not pay its debts as they become due; (ii)
file, or consent by answer or otherwise to the filing against it, of a petition
for relief, reorganization or arrangement or any other petition in bankruptcy,
for liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction; (iii) make an assignment for the benefit of its creditors; (iv)
consent to the appointment of a custodian, receiver, trustee or other officer
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    similar
powers of itself or of any substantial part of its property; (v) be adjudicated
insolvent or be liquidated; (vi) take corporate action for the purpose of any of
the foregoing and such event shall materially adversely affect the ability of
AMO to perform under this Agreement or the Plan; (vii) have a materially adverse
change in its financial condition; or (viii) receive an adverse opinion by its
auditors or accountants as to its viability as a going concern; or (ix) breach
or fail to perform or observe any covenant or other term contained in any
creditor loan agreement, debt instrument or any other material agreement to
which it is bound, which breach or failure, if left uncured could result in a
default of such agreement, except in each such case if the
creditor waives rights of foreclosure or acceleration under such agreement in
writing or such breach otherwise does not trigger an acceleration of amounts
owed under such agreement; or

    

    (b)           If
a court or government authority of competent jurisdiction shall enter an order
appointing, without consent by AMO, a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, or if an order for relief shall be entered in
any case or proceeding for liquidation or reorganization or otherwise to take
advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding up or liquidation of AMO, or if any petition for any
such relief shall be filed against AMO and such petition shall not be dismissed
within sixty (60) days; or

    

    (c)           If
AMO shall materially default (or default in such a manner that it has a material
adverse impact on Bank and/or the Plan) in the performance of or compliance with
any term or violate any of the covenants, representations, warranties or
agreements contained in this Agreement and AMO shall not have remedied such
default within thirty (30) days after written notice thereof shall have been
received by AMO from Bank; or

    

    (d)           If
at any time the type of Goods and/or Services sold by AMO materially changes
from the type of Goods and/or Services sold by AMO on the date of execution of
this Agreement; or

    

    (e)           If
at any time AMO eliminates or ceases operations of Sales Channels which,
immediately prior to such elimination or cessation, account for more than twenty
percent (20%) of AMO’s sales volume  in the aggregate (or announces or
notifies Bank of an intent or anticipation of the foregoing); or
 

    

    (f)           If
there are any changes in business practices of AMO that have a material adverse
effect on this Agreement or the Plan.

    

    

               9.3           Termination with Cause by
AMO; AMO Termination Events.  Any of the following conditions
or events shall constitute a “AMO Termination Event” hereunder, and AMO may
terminate this Agreement immediately if such AMO Termination Event occurs by providing written
notice of such decision to Bank setting forth AMO’s reason for termination and
the effective date of termination,:

    

    (a)           If
Bank shall:  (i) generally not be paying its debts as they become due;
(ii) file or consent by answer or otherwise to the filing against it, of a
petition for relief, reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any

    
      
        
           

          

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    bankruptcy
or insolvency law of any jurisdiction; (iii) make an assignment for the benefit
of its creditors; (iv) consent to the appointment of a custodian, receiver,
trustee or other officer with similar powers for itself or of any substantial
part of its property; (v) be adjudicated insolvent or be liquidated; or (vi)
take corporate action for the purpose of any of the foregoing and such event
shall materially adversely affect the ability of Bank to perform under this
Agreement or the operation of the Plan and such event shall materially adversely
affect the ability of Bank to perform under this Agreement or the Plan; or (vii)
have a materially adverse change in its financial condition; or (viii) receive
an adverse opinion by its auditors or accountants as to its viability as a going
concern; or (ix) breach or fail to perform or observe any covenant or other term
contained in any creditor loan agreement, debt instrument or any other material
agreement to which it is bound, which breach or failure, if left uncured could
result in a default of such agreement except in each such case if the
creditor waives rights of foreclosure or acceleration under such agreement in
writing or such breach otherwise does not trigger an acceleration of amounts
owed under such agreement; or

    

    (b)           If
a court or government authority of competent jurisdiction shall enter an order
appointing, without consent by Bank, a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, or if an order for relief shall be entered in
any case or proceeding for liquidation or reorganization or otherwise to take
advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding up or liquidation of Bank, or if any petition for any
such relief shall be filed against Bank and such petition shall not be dismissed
within sixty (60) days; or

    

    (c)           Except
with respect to the Service Standards, if Bank shall default in the performance
of or compliance with any term or violates any of the covenants,
representations, warranties or agreements contained in this Agreement and Bank
shall not have remedied such default within thirty (30) days (ten (10) days in
the case of failure to pay AMO pursuant to Section 3.6(a)) after written notice
of the default thereof shall have been received by Bank from AMO;
or

    

    (d)           If
Bank fails for three (3) consecutive months to perform any one of the same
Service Standards in a Service Factor Category, and such failure is not the
result of an act of AMO, or as a result of a force majeure event specified in
Section 10.11, and Bank fails to remedy such failure within thirty (30) days
after receipt of written notice from AMO;

    

    (e)           If
there are any changes in business practices of Bank that have a material adverse
effect on this Agreement or the Plan; or

    

    (f)           Upon
90 days’ prior written notice from AMO to Bank (and, for the avoidance of
doubt, without any further obligation under Section 5.10) (which notice may not
be delivered prior to the first to occur of (i) January 31, 2009 and (ii)
such date as World Financial Network National Bank shall have notified AMO (or
any of its Affiliates) that a closing under the WFNNB Account Portfolio
Purchase/Sale Agreement is not expected to occur (whether by reason of
termination of such WFNNB Account Portfolio Purchase/Sale Agreement or
otherwise)).

    

    9.4           Termination of Particular
State.  In addition, Bank may terminate the operation of the
Plan in a particular state or jurisdiction if the Applicable Law of the state or
jurisdiction

    
      
        
           

          

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    is
amended or interpreted in such a manner so as to render all or any part of the
Plan illegal or unenforceable, and in such event Bank will, if requested, assist
AMO with finding a new credit provider for such state or
jurisdiction.

    

    9.5           Liquidation/Purchase of
Accounts and
Additional Termination Provisions.

    

    (a)           AMO's Option to Purchase the
Accounts.

    

    (i)           If
this Agreement expires or is terminated by either party for whatever reason
prior to the closing under an Account Portfolio Purchase/Sale Agreement, AMO has
the option to purchase from, or arrange the purchase by a third party nominated
or selected by AMO (a "Nominated Purchaser") from, Bank the Accounts, except for
any Accounts which are charged off or inactive or otherwise mutually deemed
ineligible by AMO and Bank (it being agreed that the Ineligible Accounts as
defined in the WFNNB Account Portfolio Purchase/Sale Agreement shall be
ineligible Accounts), on such terms and conditions mutually acceptable to AMO
(or a Nominated Purchaser) and Bank, including commercially reasonable
representations and warranties.  AMO and Bank hereby agree that the
terms of the WFNNB Account Portfolio Purchase/Sale Agreement are mutually
acceptable.

    

    (ii)           The
purchase option given by Section 9.5(i) is exercisable by AMO or the Nominated
Purchaser serving notice on Bank within sixty (60) days after the expiration or
termination of this Agreement.

    

    (iii) If
such purchase option is exercised, AMO or the Nominated Purchaser must complete
the purchase of the Accounts within ninety (90) days after the notice has been
given pursuant to Section 9.5(ii); provided, however, that such times may be
extended for required regulatory approvals, rating agency consents, and to
complete any interim servicing obligation agreed to by AMO and Bank. The date of
such completion shall be the "Plan Purchase Date."

    

    (iv) The
purchase price for the Accounts shall be shall be equal to 100% of the face
value of the Accounts (excluding ineligible accounts referred to in Section 9.5
(i) above) and the receivables related thereto, including without limitation all
accrued finance charges and fees.

    

    (v) The
parties will use reasonable commercial efforts to minimize transaction costs.
Once a purchase agreement for purchase of Accounts has been executed, Bank shall
transfer to AMO or the Nominated Purchaser all right title and interest in and
to the Accounts and the related receivables and provide AMO or the Nominated
Purchaser with access to the Accounts and such other information related thereto
as agreed upon by Bank and AMO or the Nominated Purchaser.

    

    (b)           If Purchase Option Is not
Exercised.

    

    If this
Agreement is terminated and AMO (or a Nominated Purchaser) does not give written
notice to Bank of the exercise of the its option to purchase the Accounts as set
forth in Section 9.5(a), in addition to all other remedies available to the
parties at law or in equity as a result of any default
hereunder:

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
        36

        
          

        

      

      
         

      

    

    (i)           subject
to clauses (ii) through (iv) below, AMO shall have no further rights whatsoever
in the Accounts;

    

    (ii)           Bank
may use AMO Marks solely to communicate with Cardholders in connection with the
billing and collection of Accounts and as otherwise required by Applicable Law
until the Account balances have been collected in full or written-off and
liquidated, prior notice of which shall be provided by Bank to AMO; provided
that Bank shall provide AMO with a reasonable opportunity to comment on all such
communications which use any AMO Mark;

    

    (iii)           Bank
shall, at its own expense, terminate and wind up the Plan which may include any
or all of the following, all of which shall be performed in accordance with
Applicable Law:

    

    (1) in
the event the applicable Cardholder has an account under another credit card
program originated and maintained by Bank, Bank shall have the right to transfer
such Cardholder’s Account Balance to such other account;

    

    (2)  Bank
shall have the right to convert any or all of the Accounts to a general purpose
credit card account maintained by Bank (e.g. VISA, Mastercard,
etc.);

    

    (3) Bank
shall have the right to sell any or all of the Accounts to a third party bank or
financial institution (which may but need not be an Approved Replacement
Purchaser), provided such sale shall not be subject to the provisions of Section
5.10); and

    

     (4)
Bank shall be entitled to liquidate any or all of the Accounts in accordance
with its commercially reasonable collection policies and practices; provided,
however, in the event Bank determines to adopt collection policies and practices
for effectuating the liquidation process which differ from its policies and
practices applicable to its non-liquidating portfolios, Bank shall take into
account in making such determination the preservation of AMO’s existing customer
relationships as well as the efficiency of the liquidation process and the
recovery of the Account Balances.  In the event AMO desires Bank to
send a letter to Cardholders that have receivable balances owed to the Bank
regarding the termination and/or liquidation of the Accounts, Bank shall send
such letter to such Cardholders (in form and content reasonably agreed by the
parties) at AMO’s sole cost and expense.

    

    

    (c)           Transition
Assistance.  If the WFNNB Program Agreement shall terminate
prior to the end of the Term of this Agreement, AMO shall be responsible for any
expenses, fees or costs incurred by AMO or any new provider under a Program
Agreement during the course of such transition and conversion process except for
the conversion costs to be borne by Bank as set forth in the Conversion Plan
unless the WFNNB Program Agreement is terminated as a result of an AMO default
thereunder first occurring after the Closing Date (and the WFNNB Portfolio
Account Purchase/Sale Agreement is terminated as a result thereof), in which
event such costs shall be borne by AMO.

    

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
        37

        
          

        

      

      
         

      

    

    SECTION
10.  MISCELLANEOUS

    

    10.1                      Entire
Agreement.  This Agreement constitutes the entire Agreement and
supersedes all prior agreements and understandings, whether oral or written,
among the parties hereto with respect to the subject matter hereof and merges
all prior discussions between them.

    

    10.2                      Coordination of Public
Statements.  Except as required by Applicable Law, neither
party will make any public announcement of the Plan or provide any information
concerning the Plan to any representative of any news, trade or other media
without the prior approval of the other party, which approval will not be
unreasonably withheld.  Neither party will respond to any inquiry from
any public or governmental authority, except as required by Applicable Law,
concerning the Plan without prior consultation and coordination with the other
party.

    

    10.3                      Amendment.  Except
as otherwise provided for in this Agreement, the provisions herein may be
modified only upon the mutual written agreement of the parties; provided that,
prior to Closing, in no event shall any modification to this Agreement be made
or effective without the prior written consent of Norm Thompson.

    

    10.4                      Successors and
Assigns.  This Agreement and all obligations and rights arising
hereunder shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, transferees and assigns.  Assignment.
Neither party may assign this Agreement or any of its rights hereunder in any
manner without the prior written consent of the other party, except such consent
shall not be required if such assignment is in connection with an acquisition of
control of AMO by an entity other than an Affiliate of AMO, or an acquisition of
control of Bank by an entity other than an Affiliate of Bank, as the case may
be, or sale of substantially all of the assets of AMO or Bank, as the case may
be.

    

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

    

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

    

    10.7                      Notices.  All
communications and notices pursuant hereto to either party shall be in writing
and addressed or delivered to it at its address shown below, or at such other
address as may be designated by it by notice to the other party, and shall be
deemed given

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
        38

        
          

        

      

      
         

      

    

    when
delivered by hand, or two (2) Business Days after being mailed (with postage
prepaid) or when received by receipted courier service:

    

    
      	
              If to Bank:

              Spirit
      of America National Bank

              1103
      Allen Drive

              Milford,
      Ohio 45150

              Attn.:
      President

               

               

               

              With
      a Copy to:

              Spirit
      of America National Bank

              450
      Winks Lane

              Bensalem,
      PA 19020

              Attn.:  General
      Counsel

            	
              If to AMO:

              Arizona
      Mail Company, Inc.

              c/o
      Orchard Brands, Inc.

              30
      Tozer Road

              Beverly,
      MA 01915

              Attn.:  David
      Walde

              Chief
      Financial Officer

               

              With
      a Copy to:

              Kirkland
      & Ellis LLP

              555
      California Street

              San
      Francisco, California 94104

              Attn:
      Nathan Shinn

               

            

    

    

    10.8                      Captions and
Cross-References.  The table of contents and various captions
in this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this
Agreement.  References in this Agreement to any Section are to such
Section of this Agreement.

    

    10.9                      GOVERNING LAW / WAIVER OF
JURY TRIAL.  THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF OHIO, REGARDLESS OF THE DICTATES
OF OHIO CONFLICTS OF LAW, AND THE PARTIES HEREBY SUBMIT TO EXCLUSIVE
JURISDICTION AND VENUE IN THE UNITED STATES FEDERAL DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF OHIO OR ANY OF THE STATE COURTS LOCATED IN FRANKLIN COUNTY,
OHIO.  EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL.

    

    10.10                      Counterparts.  This
Agreement may be signed in one or more counterparts, all of which shall be taken
together as one agreement.

    

    10.11                      Force
Majeure.  Neither party will be responsible for any failure or
delay in performance of its obligations under this Agreement because of
circumstances beyond its reasonable control, and not due to the fault or
negligence of such party, including, but not limited to, acts of God, flood,
criminal acts, fire, riot, computer viruses or hackers where such party has
utilized commercially reasonable means to prevent the same, accident, strikes or
work stoppage, embargo, sabotage, terrorism, inability to obtain material,
equipment or phone lines, government action (including any laws, ordinances,
regulations or the like which restrict or prohibit the providing of the services
contemplated by this Agreement), and other causes whether or not of the same
class or kind as specifically named above.  In the event a party is
unable to perform substantially for any of the reasons described in this
Section, it will notify the other party promptly of its inability so to perform,
and if the inability continues for at least one hundred eighty (180) consecutive
days (thirty (30) days in the cases of credit authorizations and processing of
new Accounts), the party so notified may then terminate this Agreement
forthwith.  This provision shall not, however, release the party
unable to perform

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
        39

        
          

        

      

      
         

      

    

    from
using its best efforts to avoid or remove such circumstance and such party
unable to perform shall continue performance hereunder with the utmost dispatch
whenever such causes are removed.

    

    10.12                      Relationship of
Parties.  This Agreement does not constitute the parties as
partners or joint venturers and neither party will so represent
itself.

    

    10.13                      Survival.  No
termination of this Agreement shall in any way affect or impair the powers,
obligations, duties, rights, indemnities, liabilities, covenants or warranties
and/or representations of the parties with respect to times and/or events
occurring prior to such termination.  No powers, obligations, duties,
rights, indemnities, liabilities, covenants or warranties and/or representations
of the parties with respect to times and/or events occurring after termination
shall survive termination except for the following Sections and their
corresponding schedules: Section 2.10, Section 3.3, Section 3.5, Section 3.6,
Section 3.8, Section 3.9, Section 3.10, Section 8, Section 9.5, Section 10.7,
Section 10.9, Section 10.11, Section 10.17 and Section 10.18.

    

    10.14                      Mutual
Drafting.  This Agreement is the joint product of AMO and Bank
and each provision hereof has been subject to mutual consultation, negotiation
and agreement of AMO and Bank; therefore to the extent any language in this
Agreement is determined to be ambiguous, it shall not be construed for or
against any party based on the fact that either party controlled the drafting of
the document.

    

    10.15                      Independent
Contractor.  The parties hereby declare and agree that Bank is
engaged in an independent business, and shall perform its obligations under this
Agreement as an independent contractor; that any of Bank’s personnel performing
the services hereunder are agents, employees, Affiliates, or subcontractors of
Bank and are not agents, employees, Affiliates, or subcontractors of AMO; that
Bank has and hereby retains the right to exercise full control of and
supervision over the performance of Bank’s obligations hereunder and full
control over the employment, direction, compensation and discharge of any and
all of the Bank’s agents, employees, Affiliates, or subcontractors, including
compliance with workers’ compensation, unemployment, disability insurance,
social security, withholding and all other federal, state and local laws, rules
and regulations governing such matters; that Bank shall be responsible for
Bank’s own acts and those of Bank’s agents, employees, Affiliates, and
subcontractors; and that except as expressly set forth in this Agreement, Bank
does not undertake by this Agreement or otherwise to perform any obligation of
AMO, whether regulatory or contractual, or to assume any responsibility for
AMO’s business or operations.

    

    10.16                      No Third Party
Beneficiaries.  The provisions of this Agreement are for the
benefit of the parties hereto and not for any other person or entity; provided
that the parties agree that Norm Thompson shall be a third party beneficiary of
the Agreement solely for purposes of Section 10.3.

    

    10.17                      Confidentiality and Security
Control.

    

    (a)           Confidential
Information.  Except as specifically provided in this Section
10.17, neither party shall disclose any Confidential Information (defined below)
which it learns as a

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
        40

        
          

        

      

      
         

      

    

    result of
negotiating or implementing this Agreement. “Confidential Information” shall
mean information not of a public nature concerning the business or properties of
the other party including, without limitation: the terms and conditions of this
Agreement (as well as proposed terms and conditions of any amendments, renewals,
or extensions of this Agreement), any proposed and/or agreed upon terms and
conditions of any other credit card program agreement between the parties and/or
their Affiliates, sales volumes, test results, and results of marketing
programs, Plan reports and files generated by Bank (in the case of Bank), trade
secrets, business and financial information, source codes, business methods,
procedures, know-how and other information (including but not limited to
intellectual property) of every kind that relates to the business of either
party.   For the avoidance of doubt, the confidential information
protected by this Section 10.17 shall
include the names and addresses and other information relating to the
Cardholders, and such information shall be the exclusive property of AMO
following the Closing, recognizing that certain of such Cardholders may also
have made purchases from Bank and its affiliates other than AMO (other than
purchases under this Agreement) and the names and addresses and other
information relating to such Cardholders, to the extent such information relates
solely to such transactions with Bank and such Affiliates of Bank (other than
AMO) shall be the exclusive property of the Bank and its Affiliates following
the Closing.

    

    However,
the definition of “Confidential Information” specifically excludes information
which:

    

    (i)           is
generally known to the trade or to the public at the time of such disclosure;
or

    

    (ii)           becomes
generally known to the trade or the public subsequent to the time of such
disclosure; provided, however, that such general knowledge is not the result of
a disclosure in violation of this Section 10.17; or

    

    (iii)           is
obtained by a party from a source other than the other party, without breach of
this Agreement or any other obligation of confidentiality or secrecy owed to
such other party or any other person or organization; or

    

    (iv)           is
independently conceived and developed by the disclosing party and proven by the
disclosing party through tangible evidence not to have been developed as a
result of a disclosure of information to the disclosing party, or any other
person or organization which has entered into a confidential arrangement with
the non-disclosing party.

    

    (b)           Other Protected
Information. The use and/or disclosure of any Consumer Personal
Information, AMO Customer Information, and/or Bank Cardholder Information shall
be subject to Applicable Law, Section 2.8, and this Section 10.17.

    

    (c)           Permitted Uses and
Disclosures.

    

    (i)
Nothing in this Section 10.17 shall be interpreted to mean that a party is
restricted with respect to the use or disclosure of Confidential Information
which it owns. The parties may also disclose any Consumer Personal Information
or Confidential Information under the

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
        41

        
          

        

      

      
         

      

    

    following
circumstances.  First, to the extent disclosure is required by
Applicable Law.  Second, to the extent disclosure is both permitted by
Applicable Law and either necessary for the performance of the disclosing
party’s obligation under this Agreement and/or agreed to in writing by the other
party, provided that:  (i) prior to disclosing any such information to
any third party, the party making the disclosure (to the third party) shall give
notice to the other party of the nature of such disclosure and of the fact that
such disclosure will be made; and (ii) prior to filing a copy of this Agreement
(whole or partial) with any governmental authority or agency, the filing party
will consult with the other party with respect to such filing and shall redact
such portions of this Agreement which the other party requests be redacted,
unless, in the filing party’s reasonable judgment based on the advice of its
counsel (which advice shall have been discussed with counsel to the other
party), the filing party concludes that such request is inconsistent with the
filing party’s obligations under Applicable Law.

    

    (ii)
Nothing in this Section 10.17 shall be interpreted to mean that a party is
restricted with respect to the use or disclosure of Confidential Information in
connection with disclosure (A) prior to January 31, 2009 (or the earlier
termination of the WFNNB Account Portfolio Purchase/Sale Agreement), to World
Financial Network National Bank in connection with the performance of the
obligations set forth in the WFNNB Account Portfolio Purchase/Sale Agreement and
the WFNNB Program Agreement and (B) thereafter, to prospective purchasers of the
Accounts and prospective program providers in connection with the efforts of AMO
and Bank to enter into a Account Portfolio Purchase/Sale Agreement and a Program
Agreement.

    

    (d)           Protecting Disclosed
Information. When, pursuant to subsection (c) above, one party discloses
the other party’s Confidential Information or Consumer Personal Information to
the disclosing party’s Affiliate or a third party, the disclosing party shall be
responsible for ensuring that such disclosure complies with Applicable
Law.  Furthermore, the disclosing party shall ensure that the
Affiliate or third party executes a confidentiality agreement provided by or
approved in writing by the non-disclosing party, and that it keeps all such
information in confidence.  Each party covenants that at all times it
shall have in place procedures designed to assure that each of its employees who
is given access to the other party’s Consumer Personal Information or
Confidential Information shall protect the privacy of such
information.  Each party acknowledges that any breach of the
confidentiality provisions of this Agreement by it will result in irreparable
damage to the other party and therefore in addition to any other remedy that may
be afforded by law any breach or threatened breach of the confidentiality
provisions of this Agreement may be prohibited by restraining order, injunction
or other equitable remedies of any court.  The provisions of this
Section 10.17 will survive termination or expiration of this
Agreement.

    

    (e)           Protecting Stored
Information.  Each party shall
establish commercially reasonable controls to ensure the confidentiality of any
Consumer Personal Information and the other’s Confidential
Information.  Each party shall also ensure that such information is
not disclosed contrary to the provisions of this Agreement, or any applicable
privacy, security or other laws, rules, and regulations.  Without
limiting the foregoing, each party shall implement such physical and other
security measures as are necessary to (i) ensure the security and
confidentiality of any Consumer Personal Information and the other’s
Confidential Information, (ii) protect against any threats or hazards to the
security and integrity of such information, (iii) protect against any
unauthorized access to or use of such information, and

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
        42

        
          

        

      

      
         

      

    

    (iv)
properly dispose of any Consumer Personal Information as required under
Applicable Law.  AMO shall promptly notify Bank in the event it
believes, or has reason to believe, that a confidentiality or security breach,
or any other unauthorized intrusion, has occurred with respect to Consumer
Personal Information.  AMO shall estimate the intrusion’s affect on
Bank and shall specify the corrective action taken and to be taken by
AMO.

    

    (f)           If,
upon expiration or termination of this Agreement, AMO or its designee does not
purchase the Accounts from Bank pursuant to Section and Schedule 9.5, AMO shall
take appropriate measures to destroy or remove from its systems Bank’s
Cardholder, Confidential, and Consumer Personal Information.  This
includes but is not limited to any and all records regarding Cardholders,
whether in paper, electronic, or other form, that is maintained or otherwise
possessed by or on behalf of AMO, including a compilation of such
records.

    

    If AMO or
its designee does purchase the Accounts at such time, AMO’s obligation to remove
or destroy information shall apply only to any Bank Confidential
Information that is not
comprised of Bank Cardholder
Information or Consumer Personal Information.

    

    10.18                      Taxes.  AMO
will be responsible for, and agrees to pay, all sales, use, excise, and
value-added taxes, or taxes of a similar nature (excluding personal property
taxes and taxes based on Bank’s income which shall be borne by Bank), imposed by
the United States, any state or local government, or other taxing authority, on
all services provided by Bank under this Agreement.  The parties agree
to cooperate with each other to minimize any applicable sales, use, or similar
tax and, in connection therewith, the parties shall provide each other with any
relevant tax information as reasonably requested (including without limitation,
resale or exemption certificates, multi-state exemption certificates,
information concerning the use of assets, materials and notices of
assessments).  All amounts set forth in this Agreement are expressed
and shall be paid in lawful U.S. dollars.

    

    

    [Signature
block on following page.]

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
        43

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement in manner and
form sufficient to bind them as of the date first above written.

    

    

    
      	
              ARIZONA
      MAIL ORDER COMPANY, INC.

            	
              SPIRIT
      OF AMERICA NATIONAL BANK

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              By:  ________________________

            	
              By:  _________________________

            
	 
      	 
      
	 
      	 
      
	
              ___________________________

            	
              ____________________________

            
	
              Printed
      Name

            	
              Printed
      Name

            
	 
      	 
      
	
              ___________________________

            	
              ____________________________

            
	
              Title

            	
              Title

            

    

    

    

    

    

    

    

    

    

    
      
        
           

          

          PRIVATE
LABEL CREDIT CARD PLAN AGREEMENT

        

         

      

      
        44ENERGY CONVERSION DEVICES, INC.

TO

THE BANK OF NEW YORK TRUST COMPANY, N.A.,

AS TRUSTEE,

INDENTURE

DATED AS OF JUNE 24,2008

SENIOR DEBT SECURITIES

 

TABLE OF CONTENTS

 

	
ARTICLE 1.  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

	
1

	
 

	
SECTION

	
1.1.

	
DEFINITIONS

	
1

	
 

	
SECTION

	
1.2.

	
COMPLIANCE CERTIFICATES AND OPINIONS

	
8

	
 

	
SECTION

	
1.3.

	
FORM OF DOCUMENTS DELIVERED TO TRUSTEE

	
9

	
 

	
SECTION

	
1.4.

	
ACTS OF HOLDERS; RECORD DATES

	
9

	
 

	
SECTION

	
1.5.

	
NOTICES, ETC., TO TRUSTEE AND COMPANY

	
11

	
 

	
SECTION

	
1.6.

	
NOTICE TO HOLDERS; WAIVER

	
11

	
 

	
SECTION

	
1.7.

	
CONFLICT WITH TRUST INDENTURE ACT.

	
12

	
 

	
SECTION

	
1.8.

	
EFFECT OF HEADINGS AND TABLE OF CONTENTS.

	
12

	
 

	
SECTION

	
1.9.

	
SUCCESSORS AND ASSIGNS

	
12

	
 

	
SECTION

	
1.10.

	
SEPARABILITY CLAUSE

	
12

	
 

	
SECTION

	
1.11.

	
BENEFITS OF INDENTURE

	
12

	
 

	
SECTION

	
1.12.

	
GOVERNING LAW

	
13

	
 

	
SECTION

	
1.13.

	
LEGAL HOLIDAYS

	
13

	
 

	
SECTION

	
1.14.

	
INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS

	
13

	
 

	
SECTION

	
1.15.

	
INDENTURE MAY BE EXECUTED IN COUNTERPARTS

	
13

	
 

	
SECTION

	
1.16.

	
WAIVER OF JURY TRIAL

	
13

	
 

	
SECTION

	
1.17.

	
FORCE MAJEURE

	
14

	
ARTICLE 2.  SECURITY FORMS

	
14

	
 

	

SECTION

	
2.1.

	
FORMS GENERALLY

	
14

	
 

	

SECTION

	
2.2.

	
FORM OF FACE OF SECURITY

	
14

	
 

	

SECTION

	
2.3.

	
FORM OF REVERSE OF SECURITY

	
16

	
 

	

SECTION

	
2.4.

	
FORM OF LEGEND FOR GLOBAL SECURITIES

	
21

- i -

 

 

 

	
 

	

SECTION

	
2.5.

	
FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION

	
21

	
 

	

SECTION

	
2.6.

	
FORM OF CONVERSION NOTICE

	
21

	
ARTICLE 3.  THE SECURITIES

	
22

	
 

	

SECTION

	
3.1.

	
AMOUNT UNLIMITED; ISSUABLE IN SERIES

	
22

	
 

	

SECTION

	
3.2.

	
DENOMINATIONS

	
25

	
 

	

SECTION

	
3.3.

	
EXECUTION, AUTHENTICATION, DELIVERY AND DATING

	
25

	
 

	

SECTION

	
3.4.

	
TEMPORARY SECURITIES

	
27

	
 

	

SECTION

	

3.5.

	

REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE

	
27

	
 

	

SECTION

	
3.6.

	
MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES

	
29

	
 

	

SECTION

	
3.7.

	
PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED

	
30

	
 

	

SECTION

	
3.8.

	
PERSONS DEEMED OWNERS

	
31

	
 

	

SECTION

	
3.9.

	
CANCELLATION

	
31

	
 

	

SECTION

	
3.10.

	
COMPUTATION OF INTEREST

	
31

	
ARTICLE 4.  SATISFACTION AND DISCHARGE

	
32

	
 

	

SECTION

	
4.1.

	
SATISFACTION AND DISCHARGE OF INDENTURE

	
32

	
 

	

SECTION

	
4.2.

	
APPLICATION OF TRUST MONEY

	
33

	
ARTICLE 5.  REMEDIES

	
33

	
 

	

SECTION

	
5.1.

	
EVENTS OF DEFAULT.

	
33

	
 

	

SECTION

	
5.2.

	
ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT

	
34

	
 

	

SECTION

	
5.3.

	
COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE

	
35

	
 

	

SECTION

	
5.4.

	
TRUSTEE MAY FILE PROOFS OF CLAIM.

	
36

- ii -

 

 

	
 

	

SECTION

	
5.5.

	
TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES

	
36

	
 

	

SECTION

	
5.6.

	
APPLICATION OF MONEY COLLECTED

	
36

	
 

	

SECTION

	
5.7.

	
LIMITATION ON SUITS

	
37

	
 

	

SECTION

	
5.8.

	
UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST AND TO CONVERT

	
37

	
 

	

SECTION

	
5.9.

	
RESTORATION OF RIGHTS AND REMEDIES

	
38

	
 

	

SECTION

	
5.10.

	
RIGHTS AND REMEDIES CUMULATIVE

	
38

	
 

	

SECTION

	
5.11.

	
DELAY OR OMISSION NOT WAIVER

	
38

	
 

	

SECTION

	
5.12.

	
CONTROL BY HOLDERS

	
38

	
 

	

SECTION

	
5.13.

	
WAIVER OF PAST DEFAULTS

	
39

	
 

	

SECTION

	
5.14.

	
UNDERTAKING FOR COSTS

	
39

	
 

	

SECTION

	
5.15.

	
WAIVER OF USURY, STAY OR EXTENSION LAWS

	
39

	
ARTICLE 6.  THE TRUSTEE

	
40

	
 

	

SECTION

	
6.1.

	
DUTIES AND RESPONSIBILITIES

	
40

	
 

	

SECTION

	
6.2.

	
NOTICE OF DEFAULTS

	
40

	
 

	

SECTION

	
6.3.

	
CERTAIN RIGHTS OF TRUSTEE

	
40

	
 

	

SECTION

	
6.4.

	
NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES

	
42

	
 

	

SECTION

	
6.5.

	
MAY HOLD SECURITIES AND ACT AS TRUSTEE UNDER OTHER INDENTURES

	
42

	
 

	

SECTION

	
6.6.

	
MONEY HELD IN TRUST

	
42

	
 

	

SECTION

	
6.7.

	
COMPENSATION AND REIMBURSEMENT

	
42

	
 

	

SECTION

	
6.8.

	
CONFLICTING INTERESTS

	
43

	
 

	

SECTION

	
6.9.

	
CORPORATE TRUSTEE REQUIRED; ELIGIBILITY

	
43

	
 

	

SECTION

	
6.10.

	
RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR

	
44

- iii -

 

 

	
 

	

SECTION

	
6.11.

	
ACCEPTANCE OF APPOINTMENT BY SUCCESSOR

	
45

	
 

	

SECTION

	
6.12.

	
MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS

	
46

	
 

	

SECTION

	
6.13.

	
PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY

	
46

	
 

	

SECTION

	
6.14.

	
APPOINTMENT OF AUTHENTICATING AGENT

	
46

	
ARTICLE 7.  HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

	
48

	
 

	

SECTION

	
7.1.

	
COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS

	
48

	
 

	

SECTION

	
7.2.

	
PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS

	
48

	
 

	

SECTION

	
7.3.

	
REPORTS BY TRUSTEE

	
49

	
 

	

SECTION

	
7.4.

	
REPORTS BY COMPANY

	
49

	
ARTICLE 8.  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

	
49

	
 

	

SECTION

	
8.1.

	
COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS

	
49

	
 

	

SECTION

	
8.2.

	
SUCCESSOR SUBSTITUTED

	
50

	
ARTICLE 9.  SUPPLEMENTAL INDENTURES

	
50

	
 

	

SECTION

	
9.1.

	
SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS

	
50

	
 

	

SECTION

	
9.2.

	
SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS

	
52

	
 

	

SECTION

	
9.3.

	
EXECUTION OF SUPPLEMENTAL INDENTURES

	
53

	
 

	

SECTION

	
9.4.

	
EFFECT OF SUPPLEMENTAL INDENTURES

	
53

	
 

	

SECTION

	
9.5.

	
CONFORMITY WITH TRUST INDENTURE ACT

	
53

	
 

	

SECTION

	
9.6.

	
REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES

	
53

	
ARTICLE 10.  COVENANTS

	
53

- iv -

 

 

	
 

	

SECTION

	
10.1.

	
PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST

	
53

	
 

	

SECTION

	
10.2.

	
MAINTENANCE OF’ OFFICE OR AGENCY

	
54

	
 

	

SECTION

	
10.3.

	
MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST

	
54

	
 

	

SECTION

	
10.4.

	
STATEMENT BY OFFICERS AS TO DEFAULT

	
55

	
 

	

SECTION

	
10.5.

	
EXISTENCE

	
55

	
 

	

SECTION

	
10.6.

	
MAINTENANCE OF PROPERTIES

	
55

	
 

	

SECTION

	
10.7.

	
PAYMENT OF TAXES AND OTHER CLAIMS

	
56

	
 

	

SECTION

	
10.8.

	
WAIVER OF CERTAIN COVENANTS

	
56

	
ARTICLE 11.  REDEMPTION OF SECURITIES

	
56

	
 

	

SECTION

	
11.1.

	
APPLICABILITY OF ARTICLE

	
56

	
 

	

SECTION

	
11.2.

	
ELECTION TO REDEEM; NOTICE TO TRUSTEE

	
56

	
 

	

SECTION

	
11.3.

	
SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED

	
57

	
 

	

SECTION

	
11.4.

	
NOTICE OF REDEMPTION

	
57

	
 

	

SECTION

	
11.5.

	
DEPOSIT OF REDEMPTION PRICE

	
58

	
 

	

SECTION

	
11.6.

	
SECURITIES PAYABLE ON REDEMPTION DATE

	
59

	
 

	

SECTION

	
11.7.

	
SECURITIES REDEEMED IN PART

	
59

	
ARTICLE 12.  SINKING FUNDS

	
59

	
 

	

SECTION

	
12.1.

	
APPLICABILITY OF ARTICLE

	
59

	
 

	

SECTION

	
12.2.

	
SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES

	
60

	
 

	

SECTION

	
12.3.

	
REDEMPTION OF SECURITIES FOR SINKING FUND

	
60

	
ARTICLE 13.  DEFEASANCE AND COVENANT DEFEASANCE

	
60

	
 

	

SECTION

	
13.1.

	
COMPANY’S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE

	
60

	
 

	

SECTION

	
13.2.

	
DEFEASANCE AND DISCHARGE

	
61

- v -

 

	
 

	

SECTION

	
13.3.

	
COVENANT DEFEASANCE

	
61

	
 

	
 

	
13.4.

	
CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE

	
62

	
 

	

SECTION

	
13.5.

	
DEPOSITED MONEY, U.S. GOVERNMENT OBLIGATIONS AND FOREIGN GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; MISCELLANEOUS PROVISIONS

	
63

	
 

	

SECTION

	
13.6.

	
REINSTATEMENT

	
64

	
ARTICLE 14.  CONVERSION OF SECURITIES

	
64

	
 

	

SECTION

	
14.1.

	
APPLICABILITY OF ARTICLE

	
64

	
 

	

SECTION

	
14.2.

	
EXERCISE OF CONVERSION PRIVILEGE

	
64

	
 

	

SECTION

	
14.3.

	
NO FRACTIONAL SHARES

	
66

	
 

	

SECTION

	
14.4.

	
ADJUSTMENT OF CONVERSION PRICE

	
66

	
 

	

SECTION

	
14.5.

	
NOTICE OF CERTAIN CORPORATE ACTIONS

	
66

	
 

	

SECTION

	
14.6.

	
RESERVATION OF SHARES OF COMMON STOCK

	
67

	
 

	

SECTION

	
14.7.

	
PAYMENT OF CERTAIN TAXES UPON CONVERSION

	
67

	
 

	

SECTION

	
14.8.

	
NONASSESSABILITY

	
68

	
 

	

SECTION

	
14.9.

	
PROVISION IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS

	
68

	
 

	

SECTION

	
14.10.

	
DUTIES OF TRUSTEE REGARDING CONVERSION

	
69

	
 

	

SECTION

	
14.11.

	
REPAYMENT OF CERTAIN FUNDS UPON CONVERSION

	
69

 

 

- vi -

 

INDENTURE

INDENTURE, dated as of June 24,2008, between Energy Conversion Devices, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), having its principal executive office at 2956 Waterview Drive, Rochester Hills, Michigan 48309, and The Bank of New York Trust Company, N.A., a national banking association, as Trustee (herein called the “Trustee”).

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as provided in this Indenture.

All things necessary to make this Indenture a valid and legally binding agreement of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof appertaining, as follows:

ARTICLE 1.

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

	
SECTION 1.1.  
 	
DEFINITIONS.
 

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1)       the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(2)       all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(3)       all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles in the United States of America as are generally accepted at the date of such computation;

(4)       all references to “$” refer to the lawful currency of the United States of America;

(5)       unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Indenture; and

(6)       the words “herein,” “hereof’ and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

“Act,” when used with respect to any Holder, has the meaning specified in Section 1.4.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.

“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 6.14 to act on behalf of the Trustee to authenticate Securities of one or more series.

“Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board empowered to act for it with respect to this Indenture.

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

“Business Day,” when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

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

“Common Stock” includes any stock of any class of the Company which 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; provided, however, subject to the provisions of Section 14.9, shares issuable upon conversion of Securities shall include only shares of the class designated as Common Stock of the Company at the date of this Indenture or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have 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 are not subject to redemption by the Company; provided, further, that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

“Company” means the corporation named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

“Company Request” or “Company Order” means a written request or order signed in the name of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief 

 

Executive Officer, its President or a Vice President, and by its principal financial officer, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

“Control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the dated hereof is located at 2 N. LaSalle Street, Suite 1020, Chicago, IL 60602, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

“Corporation” means a corporation, association, company, joint-stock company or business trust.

“Covenant Defeasance” has the meaning specified in Section 13.3.

“Defaulted Interest” has the meaning specified in Section 3.7.

“Defeasance” has the meaning specified in Section 13.2.

“Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 3.1.

“Euro” or “Euros” means the currency adopted by those nations participating in the third stage of the economic and monetary union provisions of the Treaty on European Union, signed at Maastricht on February 2, 1992.

“European Economic Area” means the member nations of the European Economic Area pursuant to the Oporto Agreement on the European Economic Area dated May 2, 1992, as amended.

“European Union” means the member nations of the European Union established by the Treaty of European Union, signed at Maastricht on February 2, 1992, which amended the Treaty of Rome establishing the European Community.

“Event of Default” has the meaning specified in Section 5.1.

“Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time.

“Expiration Date” has the meaning specified in Section 1.4.

 

- 3 -

“Foreign Government Obligation” means with respect to Securities of any series which are not denominated in the currency of the United States of America (x) any security which is (i) a direct obligation of the government which issued or caused to be issued the currency in which such security is denominated and for the payment of which obligations its full faith and credit is pledged or, with respect to Securities of any series which are denominated in euros, a direct obligation of any member nation of the European Union for the payment of which obligation the full faith and credit of the respective nation is pledged so long as such nation has a credit rating at least equal to that of the highest rated member nation of the European Economic Area, or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of a government specified in
clause (i) above the payment of which is unconditionally guaranteed as a full faith and credit obligation by the such government, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any Foreign Government Obligation which is specified in clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any Foreign Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Foreign Government Obligation or the specific payment of principal or interest evidenced by such depositary
receipt.

“Global Security” means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 2.4 (or such legend as may be specified as contemplated by Section 3.1 for such Securities).

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

“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 3.1; provided, however, that if at any time more than one Person is acting as Trustee under this Indenture due to the appointment of one or more separate Trustees for any one or more separate series of Securities, “Indenture” shall mean, with respect to such series of Securities for which
any such Person is Trustee, this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities for which such Person is Trustee established as contemplated by Section 3.1, exclusive, however, of any provisions or terms which relate solely to other series of Securities for which such Person is not Trustee, regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms adopted by means of one or more indentures supplemental hereto executed and delivered after such Person had become such Trustee, but to which such person, as such Trustee, was not a party; provided, further that in the event that this Indenture is supplemented or amended by one or more indentures supplemental 

 

- 4 -

hereto which are only applicable to certain series of Securities, the term “Indenture” for a particular series of Securities shall only include the supplemental indentures applicable thereto.

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

“Interest Payment Date,” when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

“Investment Company Act” means the Investment Company Act of 1940 and any statute successor thereto, in each case as amended from time to time.

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

“Notice of Default” means a written notice of the kind specified in Section 5.1(4).

“Officers’ Certificate” means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the President or a Vice President, and by the principal financial officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 10.4 shall be the principal executive, financial or accounting officer of the Company.

“Opinion of Counsel” means a written opinion of counsel, who may be counsel for, or an employee of, the Company.

“Original Issue Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.

“Outstanding,” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture except:

(1)       Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

(2)       Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

(3)       Securities as to which Defeasance has been effected pursuant to Section 13.2; and

 

- 5 -

(4)       Securities which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 5.2, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 3.1, (C) the principal amount of a Security denominated in one or more non-U.S. dollar currencies or currency units
which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 3.1, of the principal amount of such Security (or, in the case of a Security described in clause (A) or (B) above, of the amount determined as provided in such clause), and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which the Trustee knows to be 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 any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

“Paying Agent” means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.

“Person” means any individual, corporation, limited liability company, partnership, joint venture, 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 any premium and interest on the Securities of that series are payable as specified as contemplated by Section 3.1.

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

“Record Date” means any Regular Record Date or Special Record Date.

 

- 6 -

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

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

“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 3.1.

“Responsible Officer” shall mean, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

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

“Securities Act” means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time.

“Security Register” and “Security Registrar” have the respective meanings specified in Section 3.5.

“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7.

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

“Subsidiary” means a Person of which at least a majority of the outstanding voting stock having the power to elect a majority of the board of directors of such Person (in the case of a corporation) is, or of which at least a majority of the equity interests (in the case of a Person which is not a corporation) are, at the time owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

 

- 7 -

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

“U.S. Government Obligation” means (x) any security which is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in clause

(x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.

“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 “vice president.”

	
SECTION 1.2.  
 	
COMPLIANCE CERTIFICATES AND OPINIONS.
 

Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include,

(1)       a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(2)       a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3)       a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

- 8 -

(4)       a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

	
SECTION 1.3.  
 	
FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
 

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

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

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

	
SECTION 1.4.  
 	
ACTS OF HOLDERS; RECORD DATES.
 

Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by 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 and, where it is hereby expressly required, to the Company. The Trustee shall promptly deliver to the Company copies of all such instrument or instruments delivered to the Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him or her the execution thereof. Where such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority. The fact and 

 

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date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

The ownership of Securities shall be proved by the Security Register.

Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, vote, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the
relevant series in the manner set forth in Section 1.6.

The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 5.2, (iii) any request to institute proceedings referred to in Section 5.7(2), or (iv) any direction referred to in Section 5.12, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action 

 

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taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6.

With respect to any record date set pursuant to this Section, the party hereto which sets such record dates may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto which set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding
the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.

Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

	
SECTION 1.5.  
 	
NOTICES, ETC., TO TRUSTEE AND COMPANY.
 

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(1)       the Trustee by any Holder or by the Company shall be Sufficient for every purpose hereunder if made, given, furnished or filed in writing (or by facsimile transmissions, provided that oral confirmation of receipt shall have been received) to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Administration, or

(2)       the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first- class postage prepaid, personally delivered or sent via overnight courier to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company, Attention: Chief Financial Officer.

	
SECTION 1.6.  
 	
NOTICE TO HOLDERS; WAIVER.
 

Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first- class postage prepaid, or delivered by hand or overnight courier to each Holder affected by such event, at its address as it appears in the Security Register, not later than the latest date (if any), 

 

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and not earlier than the earliest date (if any), prescribed for the giving of such notice. Neither the failure to mail or deliver by hand or overnight courier any notice, nor any defect in any notice so mailed or delivered by hand or overnight courier, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. 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 case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

	
SECTION 1.7.  
 	
CONFLICT WITH TRUST INDENTURE ACT.
 

If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under the Trust Indenture Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act, which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

	
SECTION 1.8.  
 	
EFFECT OF HEADINGS AND TABLE OF CONTENTS.
 

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

	
SECTION 1.9.  
 	
SUCCESSORS AND ASSIGNS.
 

All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

	
SECTION 1.10.  
 	
SEPARABILITY CLAUSE.
 

In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

	
SECTION 1.11.  
 	
BENEFITS OF INDENTURE.
 

Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

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SECTION 1.12.  
 	
GOVERNING LAW.
 

THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

	
SECTION 1.13.  
 	
LEGAL HOLIDAYS.
 

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security or the last date on which a Holder has the right to convert a Security at a particular conversion price shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) or, if applicable to a particular series of Securities, conversion need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, at the Stated Maturity or on such last day for conversion, as the case may be.

SECTION 1.14.   INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS.

No recourse for the payment of the principal of or premium, if any, or interest on any Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer, or director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Securities.

	
SECTION 1.15.  
 	
INDENTURE MAY BE EXECUTED IN COUNTERPARTS.
 

This instrument 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 1.16.  
 	
WAIVER OF JURY TRIAL.
 

EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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SECTION 1.17.  
 	
FORCE MAJEURE.
 

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

ARTICLE 2.

SECURITY FORMS

	
SECTION 2.1.  
 	
FORMS GENERALLY.
 

The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution 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, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3 for the authentication and delivery of such Securities. Any such Board Resolution or record of such action shall have attached thereto a true and correct copy of the form of Security referred to therein approved by or pursuant to such Board Resolution.

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

	
SECTION 2.2.  
 	
FORM OF FACE OF SECURITY.
 

 [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND

THE REGULATIONS THEREUNDER.]

ENERGY CONVERSION DEVICES, INC.

	
No. _______
 	
 
 	
$ _________
 
	
 
 	
CUSIP:
 	
 
 

 

 

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Energy Conversion Devices, Inc., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to __________,or registered assigns, the principal sum of __________ dollars on __________

[IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT —, and to pay interest thereon from or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on and in each year, commencing ,at the rate of % per annum, until the principal hereof is paid or made available for payment [IF APPLICABLE, INSERT -,provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the or (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in
said Indenture].

[IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT —, The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of _____% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment. Interest on any overdue principal or premium shall be payable on demand. [Any such interest on overdue principal or premium which is not paid on demand shall bear interest at the rate of _____% per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available
for payment. Interest on any overdue interest shall be payable on demand.]]

Payment of the principal of (and premium, if any) and [IF APPLICABLE, INSERT — any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in ,in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts

 

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[IF APPLICABLE, INSERT —, provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register].

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	
Dated: 
 	
 
 	
ENERGY CONVERSION DEVICES, Inc.
 
	
 
 	
By: 
 	
 
 
	
 
 	
Title:
 	
 
 
	
ATTEST:
 	
 
 	
 
 
	
 
 	
 
 	
 
 

 

	
SECTION 2.3.  
 	
FORM OF REVERSE OF SECURITY.
 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of ____________, 200_ herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and ________________, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the
series designated on the face hereof [IF APPLICABLE, INSERT -,limited in aggregate principal amount to $ ____________].

[IF APPLICABLE, INSERT — The Securities of this series are subject to redemption upon not less than [if APPLICABLE, INSERT — (1) days’ notice by mail, [IF APPLICABLE, INSERT— (1) on ___________ in any year commencing with the year ________ and ending with the year __________ through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [IF APPLICABLE, INSERT — on or after _________, 20__, as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [IF APPLICABLE, INSERT — on or before _________, ____%, and if redeemed] during the 12-month period beginning ____________ of the years indicated,

	
_______YEAR_______
 	
 
 	
REDEMPTION

_______PRICE_______
 	
 
 	
_______YEAR_______
 	
 
 	
REDEMPTION

PRICE
 

 

 

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and thereafter at a Redemption Price equal to _____% of the principal amount, together in the case of any such redemption [IF APPLICABLE, INSERT— (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

[IF APPLICABLE, INSERT— The Securities of this series are subject to redemption upon not less than [if applicable, insert 30] days’ notice by mail, (1) on __________ in any year commencing with the year __________ and ending with the year __________ through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [IF APPLICABLE, INSERT— on or after __________], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning __________ of the years indicated,

	
YEAR
 	
 
 	
REDEMPTION PRICE FOR
REDEMPTION THROUGH

OPERATION OF THE
SINKING FUND
 	
 
 	
REDEMPTION PRICE FOR
REDEMPTION OTHERWISE 
THAN THROUGH OPERATION 
THE SINKING FUND
 

 

and thereafter at a Redemption Price equal to ____% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

[IF APPLICABLE, INSERT — Notwithstanding the foregoing, the Company may not, prior to _________,redeem any Securities of this series as contemplated by [IF APPLICABLE, INSERT— clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than ____% per annum.]

[IF APPLICABLE, INSERT — The sinking fund for this series provides for the redemption on _____ in each year beginning with the year _____ and ending with the year _____ of [IF APPLICABLE, INSERT —  not less than $_____ (“mandatory sinking fund”) and not more than] $_____ aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Company otherwise than through [IF APPLICABLE, INSERT —  mandatory] sinking fund payments may be credited against subsequent [IF APPLICABLE, INSERT —mandatory] sinking fund payments otherwise required to be made [IF APPLICABLE, INSERT — , in the inverse order in which they become due].]

 

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[IF THE SECURITY IS SUBJECT TO REDEMPTION OF ANY KIND, INSERT — In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]

[IF APPLICABLE, INSERT —  The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default with respect to this Security] [, in each case] upon compliance with certain conditions set forth in the Indenture.]

[IF THE SECURITY IS CONVERTIBLE INTO COMMON STOCK OF THE COMPANY, INSERT — Subject to the provisions of the Indenture, the Holder of this Security is entitled, at its option, at any time on or before [insert date] (except that, in case this Security or any portion hereof shall be called for redemption, such right shall terminate with respect to this Security or portion hereof, as the case may be, so called for redemption at the close of business on the first Business Day next preceding the date fixed for redemption as provided in the Indenture unless the Company defaults in making the payment due upon redemption), to convert the principal amount of this Security (or any portion hereof which is $1,000 or an integral multiple thereof), into fully paid and non- assessable shares (calculated as to each conversion to the nearest 1/100th of a share) of the Common Stock of the Company, as
said shares shall be constituted at the date of conversion, at the conversion price of $ _____ principal amount of Securities for each share of Common Stock, or at the adjusted conversion price in effect at the date of conversion determined as provided in the Indenture, upon surrender of this Security, together with the conversion notice hereon duly executed, to the Company at the designated office or agency of the Company in ____________,accompanied (if so required by the Company) by instruments of transfer, in form satisfactory to the Company and to the Trustee, duly executed by the Holder or by its duly authorized attorney in writing. Such surrender shall, if made during any period beginning at the close of business on a Regular Record Date and ending at the opening of business on the Interest Payment Date next following such Regular Record Date (unless this Security or the portion being converted shall have been called for redemption on a Redemption Date during the period
beginning at the close of business on a Regular Record Date and ending at the opening of business on the first Business Day after the next succeeding Interest Payment Date, or if such Interest Payment Date is not a Business Day, the second such Business Day), also be accompanied by payment in funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment Date on the principal amount of this Security then being converted. Subject to the aforesaid requirement for payment and, in the case of a conversion after the Regular Record Date next preceding any Interest Payment Date and on or before such Interest Payment Date, to the right of the Holder of this Security (or any Predecessor Security) of record at such Regular Record Date to receive an installment of interest (with certain exceptions provided in the Indenture), no adjustment is to be made on conversion for interest accrued hereon or for dividends on shares of Common Stock issued on conversion.
The Company is not required to issue fractional shares upon any such conversion, but shall make adjustment therefor in cash on the basis of the current market value of such fractional interest as provided in the Indenture. The conversion price is subject to adjustment as provided in the Indenture. In addition, the Indenture provides 

 

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that in case of certain consolidations or mergers to which the Company is a party or the sale of substantially all of the assets of the Company, the Indenture shall be amended, without the consent of any Holders of Securities, so that this Security, if then outstanding, will be convertible thereafter, during the period this Security shall be convertible as specified above, only into the kind and amount of securities, cash and other property receivable upon the consolidation, merger or sale by a holder of the number of shares of Common Stock into which this Security might have been converted immediately prior to such consolidation, merger or sale (assuming such holder of Common Stock failed to exercise any rights of election and received per share the kind and amount received per share by a plurality of non-electing shares). In the event of conversion of this Security in part only, a new Security or
Securities for the unconverted portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof.]

[IF THE SECURITY IS CONVERTIBLE INTO OTHER SECURITIES OF THE COMPANY, SPECIFY THE CONVERSION FEATURES.]

[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT — If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]

[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT — If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to -INSERT FORMULA FOR DETERMINING THE AMOUNT.  Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.]

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of more than 50% in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

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As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than a majority in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed
to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities of this series are issuable only in registered form without coupons in denominations of $_____ and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

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SECTION 2.4.  
 	
FORM OF LEGEND FOR GLOBAL SECURITIES.
 

Unless otherwise specified as contemplated by Section 3.1 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

	
SECTION 2.5.  
 	
FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION.
 

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

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

 

	
 
 	
The Bank of New York Trust Company, N.A.,
 	
 
 	
 
 	
 
 
	
 
 	
as Trustee
 	
 
 	
 
 	
 
 
	
By:
 	
 
 	
 
 	
Dated:
 	
 
 
	
 
 	
Authorized Officer
 	
 
 	
 
 	
 
 

 

	
SECTION 2.6.  
 	
FORM OF CONVERSION NOTICE.
 

Conversion notices shall be in substantially the following form:

To Energy Conversion Devices, Inc.:

The undersigned owner of this Security hereby irrevocably exercises the option to convert this Security, or portion hereof (which is $1,000 or an integral multiple thereof) below designated, into shares of Common Stock of the Company in accordance with the terms of the Indenture referred to in this Security, and directs that the shares issuable and deliverable upon the conversion, together with any check in payment for fractional shares and any Securities representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If this Notice is being delivered on a date after the close of business on a Regular Record Date and prior to the opening of business on the related Interest Payment Date (unless this Security or the portion thereof being converted has been called for redemption on a Redemption Date
during the period beginning at the close of business on a Regular Record Date and ending at the opening of business on the first Business Day after the next succeeding Interest Payment Date, or if such Interest Payment Date is not a Business Day, the second such Business Day), this Notice is accompanied by payment, in funds acceptable to the Company, of an amount equal to the interest payable on such Interest 

 

- 21 -

Payment Date of the principal of this Security to be converted. If shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect hereto. Any amount required to be paid by the undersigned on account of interest accompanies this Security.

Principal Amount to be Converted (in an integral multiple of $1,000, if less than all)

U.S. $

Dated:

Signature(s) must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program) pursuant to Securities and Exchange Commission Rule 17Ad-15.

	
Signature Guaranty
 

 

Fill in for registration of shares of Common Stock and Security if to be issued otherwise than to the registered Holder.

	
Name
 	
 
 	
Social Security or Other Taxpayer
 Identification Number
 
	
 
 	
 
 	
 
 
	
Please Name and Address
 (including zip code)
 	
 
 	
 
 

 

[The above conversion notice is to be modified, as appropriate, for conversion into other securities or property of the Company.]

ARTICLE 3.

THE SECURITIES

	
SECTION 3.1.  
 	
AMOUNT UNLIMITED; ISSUABLE IN SERIES.
 

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

The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 3.3, set forth, or determined in the manner 

 

- 22 -

provided, in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,

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

(2)       any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 3.4,3.5,3.6,9.6 or 11.7 and except for any Securities which, pursuant to Section 3.3, are deemed never to have been authenticated and delivered hereunder);

(3)       the Person to whom any interest on a Security of the series shall be payable, if other than 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 such interest;

(4)       the date or dates on which the principal of any Securities of the series is payable;

(5)       the rate or rates (which may be fixed or variable) at which any Securities of the series shall bear interest, if any, the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable on any Interest Payment Date (or the method for determining the dates and rates);

(6)       the place or places where the principal of and any premium and interest on any Securities of the series shall be payable;

(7)       the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced;

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

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

(10)     if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts shall be determined;

 

- 23 -

(11)     if other than the currency of the United States of America, the currency, currencies or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and the manner of determining the equivalent herefrom

(12)     thereof in the currency of the United States of America for any purpose, including for purposes of the definition of “Outstanding” in Section 1.1;

(13)     if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder thereof, in one or more currencies or currency units other than that or those in which such Securities are stated to be payable, the currency, currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined);

(14)     if other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.2;

(15)     if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined);

(16)     if applicable, that the Securities of the series, in whole or any specified part, shall be defeasible pursuant to Section 13.2 or Section 13.3 or both such Sections, or any other defeasance provisions applicable to any Securities of the series, and, if other than by a Board Resolution, the manner in which any election by the Company to defease such Securities shall be evidenced;

(17)     if applicable, the terms of any right to convert or exchange Securities of the series into shares of Common Stock of the Company or other securities or property;

(18)     if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 2.4 and any circumstances in addition to or in lieu of those set forth in clause (2) of the last paragraph of Section 3.5 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof;

	
 
  	
(19)
 	
any addition to or change in the Events of Default which applies to any Securities
 

 

- 24 -

‘the series and any change in the right of the Trustee or the requisite Holders of such Securities declare the principal amount thereof due and payable pursuant to Section 5.2;

(20)     any addition to or change in the covenants set forth in Article 10 which applies to Securities of the series;

(21)     any Authenticating Agents, Paying Agents, Security Registrars or such other agents necessary in connection with the issuance of the Securities of such series, including, without limitation, exchange rate agents and calculation agents;

(22)     if applicable, the terms of any security that will be provided for a series of Securities, including any provisions regarding the circumstances under which collateral may be released or substituted;

(23)     if applicable, the terms of any guaranties for the Securities and any circumstances under which there may be additional obligors on the Securities; and

(24)     any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 9.1(5)).

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 3.3) set forth, or determined in the manner provided, in the Officers’ Certificate referred to above or in any such indenture supplemental hereto.

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

	
SECTION 3.2.  
 	
DENOMINATIONS.
 

The Securities of each series shall be issuable only in registered form without coupons and only in such denominations as shall be specified as contemplated by Section 3.1. In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof.

	
SECTION 3.3.  
 	
EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
 

The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its principal financial officer, its President or one of its Vice Presidents, attested by its Treasurer, its Secretary or one of its Assistant Treasurers or Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile.

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such 

 

- 25 -

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.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be provided with, and (subject to Section 6.1) shall be fully protected in relying upon, a copy of such Board Resolution, the Officers’ Certificate setting forth the terms of the series and an Opinion of
Counsel, with such Opinion of Counsel stating,

(1)       if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 2.1, that such form has been established in conformity with the provisions of this Indenture;

(2)       if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 3.1, that such terms have been established in conformity with the provisions of this Indenture; and

(3)       that such Securities, 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 constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

Notwithstanding the provisions of Section 3.1 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers’ Certificate otherwise required pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has 

 

- 26 -

been duly authenticated and delivered hereunder. 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 3.9, 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.

Neither the Company nor the Trustee shall have any responsibility for any defect in the CUSP number that appears on any Security, check, advice of payment or redemption notice, and any such document may contain a statement to the effect that CUSP numbers have been assigned by an independent service for convenience of reference and that neither the Company nor the Trustee shall be liable for any inaccuracy in such numbers.

	
SECTION 3.4.  
 	
TEMPORARY SECURITIES.
 

Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.

If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series and tenor.

SECTION 3.5.   REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.

The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.

 

- 27 -

Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.

At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive.

All Securities issued upon any registration of 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 surrendered upon such registration of transfer or exchange.

Every Security presented or surrendered for registration of transfer or for 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 Security Registrar duly executed, by the Holder thereof or its 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 registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.4,9.6 or 11.7 not involving any transfer. *

If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities selected for redemption under Section 11.3 and ending at the close of business on the day of such mailing, or (B) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

The provisions of clauses (I), (2), (3) and (4) below shall apply only to Global Securities:

(1)       Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.

(2)       Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (A) such Depositary (i) has notified the Company 

 

- 28 -

that it is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security or (C) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 3.1.

(3)       Subject to clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct.

(4)       Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6 or 11.7 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

	
SECTION 3.6.  
 	
MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
 

If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, 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.

Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.

 

- 29 -

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

	
SECTION 3.7.  
 	
PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
 

Except as otherwise provided as contemplated by Section 3.1 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date 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 the Regular Record Date for such interest.

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 (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:

(1)       The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (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 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 deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest, which shall be not more than 15 days and not 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 therefor to be given to each Holder of Securities of such series in the manner set forth in Section 1.6, 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 so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2).

(2)       The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

- 30 -

Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of 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.

Subject to the provisions of Section 14.2, in the case of any Security (or any part thereof) which is converted after any Regular Record Date and on or prior to the next succeeding Interest Payment Date (other than any Security the principal of (or premium, if any, on) which shall become due and payable, whether at Stated Maturity or by declaration of acceleration or otherwise 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 any 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 or in Section 14.2, in
the case of any Security (or any part thereof) which is converted, interest whose Stated Maturity is after the date of conversion of such Security (or such part thereof) shall not be payable.

	
SECTION 3.8.  
 	
PERSONS DEEMED OWNERS.
 

Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 3.7) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

	
SECTION 3.9.  
 	
CANCELLATION.
 

All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee shall be disposed of in accordance with its customary procedures.

	
SECTION 3.10.  
 	
COMPUTATION OF INTEREST.
 

Except as otherwise specified as contemplated by Section 3.1 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

 

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ARTICLE 4.

SATISFACTION AND DISCHARGE

	
SECTION 4.1.  
 	
SATISFACTION AND DISCHARGE OF INDENTURE.
 

This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

	
 
  	
(1)
 	
either
 

	
 
  	
(A)
 	
all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.6 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Trustee or the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or
 

	
 
  	
(B)
 	
all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case
may be;
 

(2)       the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

(3)       the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.7, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive such satisfaction and discharge.

 

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SECTION 4.2.  
 	
APPLICATION OF TRUST MONEY.
 

Subject to the provisions of the last paragraph of Section 10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee.

ARTICLE 5.

REMEDIES

	
SECTION 5.1.  
 	
EVENTS OF DEFAULT.
 

 “Event of Default,” wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), unless in the Board Resolution, supplemental indenture or Officers’ Certificate establishing such series, it is provided that such series shall not have the benefit of said Event of Default:

(1)       default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or

(2)       default in the payment of the principal of or any premium on any Security of that series at its Maturity; or

(3)       default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or

(4)       default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

(5)       the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, 

 

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assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or

(6)       the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or

(7)       any other Event of Default provided with respect to Securities of that series in the Board Resolution, supplemental indenture or Officers’ Certificate establishing that series.

SECTION 5.2.   ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

Unless the Board Resolution, supplemental indenture or Officers’ Certificate establishing such series provides otherwise, if an Event of Default (other than an Event of Default specified in Section 5.1(5) or 5.1(6)) with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof), and premium, if any, together with accrued and unpaid interest, if any, thereon, to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holders), and
upon any such declaration such principal amount (or specified amount), and premium, if any, together with accrued and unpaid interest, if any, thereon, shall become immediately due and payable. If an Event of Default specified in Section 5.1(5) or 5.1(6) with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof), and premium, if any, together with accrued and unpaid interest, if any, thereon, shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable.

At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in 

 

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principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if

	
 
  	
(1)
 	
the Company has paid or deposited with the Trustee a sum sufficient to pay
 

	
 
  	
(A)
 	
all overdue interest on all Securities of that series,
 

	
 
  	
(B)
 	
the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,
 

	
 
  	
(C)
 	
to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and
 

	
 
  	
(D)
 	
all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and
 

(2)       all Events of Default with respect to Securities of that series, other than the non- payment of the principal of Securities of that series that have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

SECTION 5.3.   COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

The Company covenants that if

(1)       default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or

(2)       default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem necessary to protect and enforce any such rights, whether for the specific enforcement of 

 

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any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

	
SECTION 5.4.  
 	
TRUSTEE MAY FILE PROOFS OF CLAIM.
 

In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it
for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.7.

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.

SECTION 5.5.   TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

	
SECTION 5.6.  
 	
APPLICATION OF MONEY COLLECTED.
 

Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST:  To the payment of all amounts due the Trustee under Section 6.7;

 

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SECOND:  To the payment of the amounts then due and unpaid for principal of and any premium, if any, and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium, if any, and interest, respectively; and

THIRD:  The balance, if any, to the Company.

	
SECTION 5.7.  
 	
LIMITATION ON SUITS.
 

No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

(1)       such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;

(2)       the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(3)       such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

(4)       the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(5)       no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.

SECTION 5.8.   UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST AND TO CONVERT.

Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 3.7) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date), to convert such Securities in accordance with Article 14 to the extent that such right to convert is applicable to such Security, and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

 

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SECTION 5.9.  
 	
RESTORATION OF RIGHTS AND REMEDIES.
 

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

	
SECTION 5.10.  
 	
RIGHTS AND REMEDIES CUMULATIVE.
 

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy 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.

	
SECTION 5.11.  
 	
DELAY OR OMISSION NOT WAIVER.
 

No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given-by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee (subject to the limitations contained in this Indenture) or by the Holders, as the case may be.

	
SECTION 5.12.  
 	
CONTROL BY HOLDERS.
 

The Holders of a majority in principal amount of the Outstanding Securities of any series 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, provided that

(1)       such direction shall not be in conflict with any rule of law or with this Indenture and the Trustee shall not have determined that the action so directed would be unjustly prejudicial to Holders of Securities of that series, or any other series, not taking part in such direction; and

(2)       the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction or this Indenture.

 

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SECTION 5.13.  
 	
WAIVER OF PAST DEFAULTS.
 

The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except

(1)       a default in the payment of the principal of or any premium or interest on any Security of such series as and when the same shall become due and payable by the terns thereof, otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of interest, principal and premium, if any, has been deposited with the Trustee), or

(2)       to the extent such right is applicable to such Security, a failure by the Company on request to convert any Security into Common Stock; or

(3)       in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

	
SECTION 5.14.  
 	
UNDERTAKING FOR COSTS.
 

In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, including attorneys’ fees and expenses, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company or in any suit for the enforcement of the right to convert any Security in accordance with Article 14.

	
SECTION 5.15.  
 	
WAIVER OF USURY, STAY OR EXTENSION LAWS.
 

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

 

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ARTICLE 6.

THE TRUSTEE

	
SECTION 6.1.  
 	
DUTIES AND RESPONSIBILITIES.
 

The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or 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 provisions of this Section.

	
SECTION 6.2.  
 	
NOTICE OF DEFAULTS.
 

If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided, however, that except in the case of a default in the payment of principal of (or premium, if any) or interest on any Securities of such series or in the payment of any sinking fund installment or any conversion right applicable to Securities of such series, the Trustee shall be protected in withholding such notice if and so long as a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the holders of Securities of such series; provided, further, however, that in the case of any default of the character specified in Section 5.1(4) with respect to Securities of such
series, no such notice to Holders shall be given until at least 60 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event that is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.

Except with respect to Section 10.1, the Trustee shall have no duty to inquire as to the performance Of the Company with respect to the covenants contained in Article 10. In addition, the Trustee shall not be deemed to have knowledge of an Event of Default except (i) any Default or Event of Default occurring pursuant to Sections 5.1(1), 5.1(2) and 5.1(3) (defaults in payments on the Securities) or (ii) any Default or Event of Default of which the Trustee shall have received written notification or obtained actual knowledge.

Delivery of reports, information and documents to the Trustee under Section 7.4 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely conclusively on Officers’ Certificates).

	
SECTION 6.3.  
 	
CERTAIN RIGHTS OF TRUSTEE.
 

Subject to the provisions of Section 6.1:

 

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(1)       in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(2)       any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution;

(3)       whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) is entitled to and may, in the absence of bad faith on its part, rely upon an Officers’ Certificate;

(4)       the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

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

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

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

(8)       in no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;

(9)       the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice 

 

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of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; and

(10)     the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

SECTION 6.4.   NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity, sufficiency or priority of this Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof.

SECTION 6.5.   MAY HOLD SECURITIES AND ACT AS TRUSTEE UNDER OTHER INDENTURES.

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

Subject to the limitations imposed by the Trust Indenture Act, nothing in this Indenture shall prohibit the Trustee from becoming and acting as trustee under other indentures under which other securities, or certificates of interest of participation in other securities, of the Company are outstanding in the same manner as if it were not Trustee hereunder.

	
SECTION 6.6.  
 	
MONEY HELD IN TRUST.
 

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company.

	
SECTION 6.7.  
 	
COMPENSATION AND REIMBURSEMENT.
 

The Company agrees:

(1)       to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(2)       except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all expenses, disbursements and advances incurred or made by the Trustee in 

 

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accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance shall be caused by its own negligence or willful misconduct; and

(3)       to indemnify the Trustee for, and to hold it harmless against, any loss, liability, claim, damage or expense incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 5.1(5) or Section 5.1(6) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any applicable bankruptcy, insolvency, reorganization or similar law.

The Trustee shall have priority over the Securities as to all property and funds held by it hereunder for any amount owing it or any predecessor Trustee pursuant to this Section 6.7, except with respect to funds held in trust for the benefit of the Holders of particular Securities.

The provisions of this Section shall survive the termination of this Indenture or the resignation or removal of the Trustee.

	
SECTION 6.8.  
 	
CONFLICTING INTERESTS.
 

If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act and there is an Event of Default under the Securities of that series, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. 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 6.9.  
 	
CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
 

There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has (or if the Trustee is a member of a bank holding company system, its bank holding company has) a combined capital and surplus of at least $50,000,000. If any such Person or bank holding company publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person or bank holding company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

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SECTION 6.10.   RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

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

The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving 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 with respect to the Securities of such series.

The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.1 1 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the removed Trustee 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.

If at any time:

(1)       the Trustee shall fail to comply with Section 6.8 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

(2)       the Trustee shall cease to be eligible under Section 6.9 and shall fail to resign after written request therefor by the Company or by any such Holder, or

(3)       the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver 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, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security 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 with respect to all Securities and the appointment of a successor Trustee or Trustees.

If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a 

 

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successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 6.1 1, the retiring Trustee may petition, or any Holder who has been a bona fide Holder of a Security of such series for at least six months may petition, on behalf of himself and all others
similarly situated, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 1.6. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

	
SECTION 6.11.  
 	
ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
 

In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, 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 

 

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of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

SECTION 6.12.   MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee (including the administration of the trust created by this Indenture), shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such Securities. In the event that any Securities shall not have been authenticated by such predecessor Trustee, any such successor Trustee may authenticate and deliver such Securities in &her its own name or that of such predecessor Trustee, with the full force and effect which this Indenture provides for the certificate of authentication of the Trustee.

	
SECTION 6.13.  
 	
PREFERENTIAL COLLECTION OF CLAIMS AGAINST 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).

	
SECTION 6.14.  
 	
APPOINTMENT OF AUTHENTICATING AGENT.
 

The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or 

 

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partial redemption thereof or pursuant to Section 3.6, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having (or if the
Authenticating Agent is a member of a bank holding company system, its bank holding company has) a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or ally corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 1.6 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 6.7.

 

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If an appointment with respect to one or more series is made pursuant to this Section 6.12, the Securities of such series may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

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

 

	
 
 	
,
 
	
 
 	
as Trustee
 
	
By:
 	
as Authenticating Agent
 
	
By:
 	
Authorized Officer
 

 

ARTICLE 7.

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.1.   COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.

The Company will furnish or cause to be furnished to the Trustee

(1)       semi-annually, not later than 15 days after the Regular Record Date for each respective series of Securities, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as of such Regular Record Date, as the case may be, or if there is no Regular Record Date for such series of Securities, semi- annually, and

(2)       at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided that no such list need be furnished by the Company to the Trustee so long as the Trustee is acting as Security Registrar.

SECTION 7.2.   PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.1 upon receipt of a new list so furnished.

The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

 

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Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

	
SECTION 7.3.  
 	
REPORTS BY TRUSTEE.
 

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.

Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than May 15 in each calendar year, commencing with the first May 15 after the first issuance of Securities pursuant to this Indenture.

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

	
SECTION 7.4.  
 	
REPORTS BY COMPANY.
 

The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to the Trust Indenture Act; provided that any such information, documents or reports required to be filed with the commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission.

ARTICLE 8.

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.1.   COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

The Company shall not consolidate with or merge into any other Person (in a transaction in which the Company is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless:

(1)       in case the Company shall consolidate with or merge into another Person (in a transaction in which the Company is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation, limited liability company, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and 

 

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delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed and the conversion rights shall be provided for in accordance with Article 14, if applicable, or as otherwise specified pursuant to Section 3.1, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by the Person (if other than the Company) formed by such consolidation or into which the Company shall have been merged or by the Person which shall have acquired the Company’s assets;

(2)       immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or any Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and

(3)       the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

	
SECTION 8.2.  
 	
SUCCESSOR SUBSTITUTED.
 

Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 8.1, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

ARTICLE 9.

SUPPLEMENTAL INDENTURES

SECTION 9.1.   SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS

Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(1)       to evidence the succession of another Person to the Company, or successive successions, and the assumption by any such successor of the covenants of the Company herein and in the Securities in compliance with Article 8; or

 

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

(3)       to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or

(4)       to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Securities in uncertificated form; or

(5)       to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (A) shall neither (i) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such Security with respect to such provision or (B) shall become effective only when there is no such Security Outstanding; or

(6)       to secure the Securities, including provisions regarding the circumstances under which collateral may be released or substituted; or

(7)       to add or provide for a guaranty of the Securities or additional obligors on the Securities; or

(8)       to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 3.1; or

(9)       to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11; or

(10)     to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this clause (10) shall not adversely affect the interests of the Holders of Securities of any series in any material respect; or

(11)     to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Articles 4 and 13, provided that any such action shall not adversely affect the interests of the Holders of Securities of such series or any other series of Securities in any material respect.

 

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SECTION 9.2.  
 	
SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
 

With the consent of the Holders of a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

(1)       change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2, or change the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or modify the provisions of this Indenture in the case of Securities of any series that are convertible into Securities or
other securities of the Company, adversely affect the right of Holders to convert any of the Securities of such series other than as provided in or pursuant to this Indenture, or

(2)       reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

(3)       modify any of the provisions of this Section, Section 5.13 or Section 10.8, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 10.8, or the deletion of this proviso, in accordance with the requirements of Sections 6.1 1 and 9.1(8), or

(4)       if applicable, make any change that adversely affects the right to convert any security as provided in Article 14 or pursuant to Section 3.1 (except as permitted by Section 9.1(9)) or decrease the conversion rate or increase the conversion price of any such security.

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

 

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

	
SECTION 9.3.  
 	
EXECUTION OF SUPPLEMENTAL INDENTURES.
 

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be provided with, and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an Opinion of Counsel and an Officers’ Certificate each stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but 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.

	
SECTION 9.4.  
 	
EFFECT OF SUPPLEMENTAL INDENTURES.
 

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

	
SECTION 9.5.  
 	
CONFORMITY WITH TRUST INDENTURE ACT.
 

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.

	
SECTION 9.6.  
 	
REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
 

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

ARTICLE 10.

COVENANTS

	
SECTION 10.1.  
 	
PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
 

The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.

 

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SECTION 10.2.  
 	
MAINTENANCE OF’ OFFICE OR AGENCY.
 

The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange, where Securities of that series may be surrendered for conversion and where notices and demands to or upon the Company in respect of the Securities of that series and 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 such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices and demands. Unless otherwise provided in a supplemental indenture or pursuant to Section 3.1 hereof, the Place of Payment for any series of Securities shall be the Corporate Trust Office of the Trustee.

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

	
SECTION 10.3.  
 	
MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
 

If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, on or prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

The Company will cause each Paying Agent for any series of Securities other than the Trustee 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, that such Paying Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.

 

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The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for a period ending on the earlier of the date that is ten Business Days prior to the date such money would escheat to the State or two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in each Place of Payment, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

	
SECTION 10.4.  
 	
STATEMENT BY OFFICERS AS TO DEFAULT.
 

The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. The fiscal year of the Company currently ends on June 30; and the Company will give the Trustee prompt written notice of any change of its fiscal year.

	
SECTION 10.5.  
 	
EXISTENCE.
 

Subject to Article 8, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence.

	
SECTION 10.6.  
 	
MAINTENANCE OF PROPERTIES.
 

The Company will cause all properties used or useful in the conduct of its business to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as, and to the extent, in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and 

 

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advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business and not disadvantageous in any material respect to the Holders.

	
SECTION 10.7.  
 	
PAYMENT OF TAXES AND OTHER CLAIMS.
 

The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon the Company or upon the income, profits or property of the Company, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim (i) whose amount, applicability or validity is being contested in good faith by appropriate proceedings or (ii) if the failure to pay or discharge would not have a material adverse effect on the assets, business, operations, properties or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole.

	
SECTION 10.8.  
 	
WAIVER OF CERTAIN COVENANTS.
 

Except as otherwise specified as contemplated by Section 3.1 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Section 3.1(19), 9.1(2), 9.1(7), 10.6 or 10.7 for the benefit of the Holders of such series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of
any such term, provision or condition shall remain in full force and effect.

ARTICLE 11.

REDEMPTION OF SECURITIES

	
SECTION 11.1.  
 	
APPLICABILITY OF ARTICLE.
 

Securities of any series that are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 3.1 for such Securities) in accordance with this Article.

	
SECTION 11.2.  
 	
ELECTION TO REDEEM; NOTICE TO TRUSTEE.
 

The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.1 for such Securities. In case of any redemption at the election of the Company of less than all the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at least 45 

 

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days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction.

	
SECTION 11.3.  
 	
SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
 

If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by lot, or in the Trustee’s discretion, on a pro-rata basis, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not
more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.

If any Security selected for partial redemption 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 that 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.

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

The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.

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

	
SECTION 11.4.  
 	
NOTICE OF REDEMPTION.
 

Notice of redemption shall be given by first-class mail, postage prepaid, mailed not fewer than 30 nor more than 60 days prior to the Redemption Date, unless a shorter period is specified 

 

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in the Securities to be redeemed, to each Holder of Securities to be redeemed, at its address appearing in the Security Register.

All notices of redemption shall state:

	
 
  	
(1)
 	
the Redemption Date,
 

	
 
  	
(2)
 	
the Redemption Price (including accrued interest, if any),
 

 (3)       if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed,

(4)       in case any Security is to be redeemed in part only, that on and after the Redemption Date, upon surrender of such Security, the Holder of such Security will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed,

(5)       that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,

(6)       the place or places where each such Security is to be surrendered for payment of the Redemption Price,

(7)       if applicable, the conversion price, the date on which the right to convert the principal of the Securities or the portions thereof to be redeemed will terminate, and the place or places where such Securities may be surrendered for conversion,

	
 
  	
(8)
 	
that the redemption is for a sinking fund, if such is the case, and
 

 (9)       the CUSP number or numbers and/or common codes of the Security being redeemed.

Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company and shall be irrevocable.

	
SECTION 11.5.  
 	
DEPOSIT OF REDEMPTION PRICE.
 

On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.3)an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.

 

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If any Security called for redemption is converted, any money deposited with the Trustee or with a Paying Agent or so segregated and held in trust for the redemption of such Security shall (subject to the right of any Holder of such Security to receive interest as provided in the last paragraph of Section 3.7) be paid to the Company on Company Request, or if then held by the Company, shall be discharged from such trust.

	
SECTION 11.6.  
 	
SECURITIES PAYABLE ON REDEMPTION DATE.
 

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 3.1, installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to
their terms and the provisions of Section 3.7.

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

	
SECTION 11.7.  
 	
SECURITIES REDEEMED IN PART.
 

Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

ARTICLE 12.

SINKING FUNDS

	
SECTION 12.1.  
 	
APPLICABILITY OF ARTICLE.
 

The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 3.1 for such Securities.

The minimum amount of any sinking fund payment provided for by the terms of any Securities is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terns of such Securities is herein referred to 

 

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as an “optional sinking fund payment.” If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.2. Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities.

SECTION 12.2.   SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

The Company (1)may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption
through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

	
SECTION 12.3.  
 	
REDEMPTION OF SECURITIES FOR SINKING FUND.
 

Not fewer than 60 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 12.2 and will also deliver to the Trustee any Securities to be so delivered. Not fewer than 30 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 11.3 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 11.4. Such notice
having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 11.6 and 11.7.

ARTICLE 13.

DEFEASANCE AND COVENANT DEFEASANCE

SECTION 13.1.   COMPANY’S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.

The Company may elect, at its option at any time, to have Section 13.2 or Section 13.3 applied to any Securities or any series of Securities, as the case may be, designated pursuant to Section 3.1 as being defeasible pursuant to such Section 13.2 or 13.3, in accordance with any applicable requirements provided pursuant to Section 3.1 and upon compliance with the conditions set forth below in this Article. Any such election shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.1 for such Securities.

 

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SECTION 13.2.  
 	
DEFEASANCE AND DISCHARGE.
 

Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 13.4 are satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder:

(1)       the rights of Holders of such Securities to receive, solely from the trust fund described in Section 13.4 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due,

(2)       the Company’s obligations with respect to such Securities under Sections 3.4,3.5, 3.6, 10.2 and 10.3, and, if applicable, Article 14,

	
 
  	
(3)
 	
the rights, powers, trusts, duties and immunities of the Trustee hereunder, and
 

	
 
  	
(4)
 	
this Article.
 

Subject to compliance with this Article, the Company may exercise its option (if any) to have this Section applied to any Securities notwithstanding the prior exercise of its option (if any) to have Section 13.3 applied to such Securities.

	
SECTION 13.3.  
 	
COVENANT DEFEASANCE.
 

Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be,

(1)       the Company shall be released from its obligations under Sections 10.6 and 10.7 and any covenants provided pursuant to Sections 3.1(19), 9.1(2) or 9.1(7) for the benefit of the Holders of such Securities and

(2)       the occurrence of any event specified in Section 5.1(4) (with respect to any of Sections 10.6 and 10.7 and any such covenants provided pursuant to Section 3.1(19), 9.1(2) or 9.1(7)) and the occurrence of any other Event of Default specified pursuant to Section 3.1 shall be deemed not to be or result in an Event of Default, in each case with respect to such Securities or any series of Securities as provided in this Section on and after the date the conditions set forth in Section 13.4 are satisfied (hereinafter called “Covenant Defeasance”). For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 5.1(4) and
the occurrence of any Event of Default specified pursuant to Section 3.1), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any 

 

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reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

	
SECTION 13.4.  
 	
CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
 

The following shall be the conditions to the application of Section 13.2 or Section 13.3 to any Securities or any series of Securities, as the case may be:

(1)       The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 6.9 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities,

	
 
  	
(A)
 	
in the case of Securities of a series denominated in currency of the United States of America, (i) cash in currency of the United States of America in an amount, or (ii) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, an amount in cash, or (iii) a combination thereof, or
 

	
 
  	
(B)
 	
in the case of Securities of a series denominated in currency other than that of the United States of America, (i) cash in the currency in which such series of Securities is denominated in an amount, or (ii) Foreign Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, an amount in cash, or (iii) a combination thereof, in each case sufficient, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities.
 

(2)       For Securities denominated in United States dollars, in the event of an election to have Section 29.2 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that

	
 
  	
(A)
 	
the Company has received from, or there has been published by, the Internal Revenue Service a ruling or
 

	
 
  	
(B)
 	
since the date of this instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the 
 

 

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same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.

(3)       For Securities denominated in United States dollars, in the event of an election to have Section 13.3 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit and 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 deposit and Covenant Defeasance were not to occur.

(4)       The Company shall have delivered to the Trustee an Officers’ Certificate to the effect that neither such Securities nor any other Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit. 

(5)       No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 5.1(5) and (6), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day).

(6)       Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act).

(7)       Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound.

(8)       Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder.

(9)       The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with.

SECTION 13.5.   DEPOSITED MONEY, U.S. GOVERNMENT OBLIGATIONS AND FOREIGN GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; MISCELLANEOUS PROVISIONS.

Subject to the provisions of the last paragraph of Section 10.3, all money, U.S. Government Obligations and Foreign Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 13.6, the Trustee and any such other trustee are referred to collectively as the “Trustee”) pursuant to Section 13.4 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, 

 

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either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations or Foreign Government Obligations deposited pursuant to Section 13.4 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities. Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money,
U.S. Government Obligations or Foreign Government Obligations held by it as provided in Section 13.4 with respect to any Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities.

	
SECTION 13.6.  
 	
REINSTATEMENT.
 

If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture and such Securities from which the Company has been discharged or released pursuant to Section 13.2 or 13.3 shall be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 13.5 with respect to such Securities in accordance with this Article; provided, however, that if the Company makes any payment of principal of or any premium or interest on any such Security following such reinstatement of its obligations, the
Company shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.

ARTICLE 14.

CONVERSION OF SECURITIES

	
SECTION 14.1.  
 	
APPLICABILITY OF ARTICLE.
 

The provisions of this Article shall be applicable to the Securities of any series which are convertible into shares of Common Stock of the Company, and the issuance of such shares of Common Stock upon the conversion of such Securities, except as otherwise specified as contemplated by Section 3.1 for the Securities of such series.

	
SECTION 14.2.  
 	
EXERCISE OF CONVERSION PRIVILEGE.
 

In order to exercise a conversion privilege, the Holder of a Security of a series with such a privilege shall surrender such Security to the Company at the office or agency maintained for that purpose pursuant to Section 10.2, accompanied by a duly executed conversion notice to the Company substantially in the form set forth in Section 2.6 stating that the Holder elects to 

 

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convert such Security or a specified portion thereof. Such notice shall also state, if different from the name and address of such Holder, the name or names (with address) in which the certificate or certificates for shares of Common Stock, which shall be issuable on such conversion, shall be issued. Securities surrendered for conversion shall (if so required by the Company or the Trustee) be duly endorsed by or accompanied by instruments of transfer in forms satisfactory to the Company and the Trustee duly executed by the Holder or its attorney duly authorized in writing; and Securities so surrendered for conversion (in whole or in part) during the period from the close of business on any Regular Record Date to the opening of business on the next succeeding Interest Payment Date (excluding Securities or portions thereof called for redemption during the period beginning at the close of business on a Regular
Record Date and ending at the opening of business on the first Business Day after the next succeeding Interest Payment Date, or if such Interest Payment Date is not a Business Day, the second such Business Day) shall also be accompanied by payment in funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment Date on the principal amount of such Security then being converted, and such interest shall be payable to such Holder notwithstanding the conversion of such Security, subject to the provisions of Section 3.7 relating to the payment of Defaulted Interest by the Company. As promptly as practicable after the receipt of such notice and of any payment required pursuant to a Board Resolution and, subject to Section 3.3, set forth, or determined in the manner provided, in an Officers’ Certificate, or established in one or more indentures supplemental hereto setting forth the terms of such series of Security, and the surrender of such Security
in accordance with such reasonable regulations as the Company may prescribe, the Company shall issue and shall deliver, at the office or agency at which such Security is surrendered, to such Holder or on its written order, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such Security (or specified portion thereof), in accordance with the provisions of such Board Resolution, Officers’ Certificate or supplemental indenture, and cash as provided therein in respect of any fractional share of such Common Stock otherwise issuable upon such conversion. Such conversion shall be deemed to have been effected immediately prior to the close of business on the date on which such notice and such payment, if required, shall have been received in proper order for conversion by the Company and such Security shall have been surrendered as aforesaid (unless such Holder shall have so surrendered such Security and shall have instructed the
Company to effect the conversion on a particular date following such surrender and such Holder shall be entitled to convert such Security on such date, in which case such conversion shall be deemed to be effected immediately prior to the close of business on such date) and at such time the rights of the Holder of such Security as such Security Holder shall cease and the person or persons in whose name or names any certificate or certificates for shares of Common Stock of the Company shall be issuable upon such conversion shall be deemed to have become the Holder or Holders of record of the shares represented thereby. Except as set forth above and subject to the final paragraph of Section 3.7, no payment or adjustment shall be made upon any conversion on account of any interest accrued on the Securities (or any part thereof) surrendered for conversion or on account of any dividends on the Common Stock of the Company issued upon such conversion. In the case of any Security which is
converted in part only, upon such conversion 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 of the same series, of authorized denominations, in aggregate principal amount equal to the unconverted portion of such Security.

 

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SECTION 14.3.  
 	
NO FRACTIONAL SHARES.
 

No fractional share of Common Stock of the Company shall be issued upon conversions of Securities of any series. If more than one Security shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Securities (or specified portions thereof to the extent permitted hereby) so surrendered. If, except for the provisions of this Section 14.3, any Holder of a Security or Securities would be entitled to a fractional share of Common Stock of the Company upon the conversion of such Security or Securities, or specified portions thereof, the Company shall pay to such Holder an amount in cash equal to the current market value of such fractional share computed, (i) if such Common Stock is listed or admitted to unlisted trading privileges on a national
securities exchange or market, on the basis of the last reported sale price regular way on such exchange or market on the last trading day prior to the date of conversion upon which such a sale shall have been effected, or (ii) if such Common Stock is not at the time so listed or admitted to unlisted trading privileges on a national securities exchange or market, on the basis of the average of the bid and asked prices of such Common Stock in the over-the-counter market, on the last trading day prior to the date of conversion, as reported by the National Quotation Bureau, Incorporated or similar organization if the National Quotation Bureau, Incorporated is no longer reporting such information, or if not so available, the fair market price as determined by the Board of Directors. For purposes of this Section, “trading day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday other than any day on which the Common Stock is not traded on the Nasdaq National Market,
or if the Common Stock is not traded on the Nasdaq National Market, on the principal exchange or market on which the Common Stock is traded or quoted.

	
SECTION 14.4.  
 	
ADJUSTMENT OF CONVERSION PRICE.
 

The conversion price of Securities of any series that is convertible into Common Stock of the Company shall be adjusted for any stock dividends, stock splits, reclassifications, combinations or similar transactions in accordance with the terms of the supplemental indenture or Board Resolutions setting forth the terms of the Securities of such series. Whenever the conversion price is adjusted, the Company shall compute the adjusted conversion price in accordance with terms of the applicable Board Resolution or supplemental indenture and shall prepare an Officers’ Certificate setting forth the adjusted conversion price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at each office or agency maintained for the purpose of conversion of Securities pursuant to Section 10.2 and, if different, with the Trustee. The
Company shall forthwith cause a notice setting forth the adjusted conversion price to be mailed, first class postage prepaid, to each Holder of Securities of such series at its address appearing on the Security Register and to any conversion agent other than the Trustee.

	
SECTION 14.5.  
 	
NOTICE OF CERTAIN CORPORATE ACTIONS.
 

In case:

(1)       the Company shall declare a dividend (or any other distribution) on its Common Stock payable otherwise than in cash out of its retained earnings (other than a dividend for which 

 

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approval of any shareholders of the Company is required) that would require an adjustment pursuant to Section 14.4; or

(2)       the Company shall authorize the granting to all or substantially all of the holders of its Common Stock of rights, options or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights (other than any such grant for which approval of any shareholders of the Company is required); or

(3)       of any reclassification of the Common Stock of the Company (other than a subdivision or combination of its outstanding shares of Common Stock, or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any shareholders of the Company is required), or of the sale of all or substantially all of the assets of the Company; or

(4)       of the voluntary or involuntary dissolution, liquidation or winding up of the Company; then the Company shall cause to be filed with the Trustee, and shall cause to be mailed to all Holders at their last addresses as they shall appear in the Security Register, at least 20 days (or 10 days in any case specified in clause (1) or (2) above) prior to the applicable record date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, distribution, rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, rights, options or warrants are to be determined, or (ii) the date on which such reclassification, consolidation, merger, share exchange, sale, dissolution, liquidation or
winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, dissolution, liquidation or winding up. If at any time the Trustee shall not be the conversion agent, a copy of such notice shall also forthwith be filed by the Company with the Trustee.

	
SECTION 14.6.  
 	
RESERVATION OF SHARES OF COMMON STOCK.
 

The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of Securities, they full number of shares of Common Stock of the Company then issuable upon the conversion of all outstanding Securities of any series that has conversion rights.

	
SECTION 14.7.  
 	
PAYMENT OF CERTAIN TAXES UPON CONVERSION.
 

Except as provided in the next sentence, the Company will pay any and all taxes that may be payable in respect of the issue or delivery of shares of its Common Stock on conversion of Securities pursuant hereto. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of its Common Stock in a name other than that of the Holder of the Security or Securities to be converted, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Company the amount of any such tax, or has established, to the satisfaction of the Company, that such tax has been paid.

 

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SECTION 14.8.  
 	
NONASSESSABILITY.
 

The Company covenants that all shares of its Common Stock that may be issued upon conversion of Securities will upon issue in accordance with the terms hereof be duly and validly issued and fully paid and nonassessable.

SECTION 14.9.   PROVISION IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.

In case of any consolidation or merger of the Company with or into any other Person, any merger of another Person with or into the Company (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company) or any conveyance, sale, transfer or lease of all or substantially all of the assets of the Company, the Person formed by such consolidation or resulting from such merger or which acquires such assets, as the case may be, shall execute and deliver to the Trustee a supplemental indenture providing that the Holder of each Security of a series then Outstanding that is convertible into Common Stock of the Company shall have the right thereafter (which right shall be the exclusive conversion right thereafter available to said Holder), during the period such Security shall be convertible, to convert such
Security only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer or lease by a holder of the number of shares of Common Stock of the Company into which such Security might have been converted immediately prior to such consolidation, merger, conveyance, sale, transfer or lease, assuming such holder of Common Stock of the Company (i) is not a Person with which the Company consolidated or merged with or into or which merged into or with the Company or to which such conveyance, sale, transfer or lease was made, as the case may be (a “Constituent Person”), or an Affiliate of a Constituent Person and (ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer or lease (provided that if the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer, or lease is not the same for each share of Common Stock of the Company held immediately prior to such consolidation, merger, conveyance, sale, transfer or lease by others than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised (“Non-electing Share”), then for the purpose of this Section 14.9 the kind and amount of securities, cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer or lease by the holders of each Non-electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-electing Shares). Such supplemental indenture shall provide for adjustments which, for events subsequent to the effective date of such supplemental indenture, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article or in accordance with the terms of the
supplemental indenture or Board Resolutions setting forth the terms of such adjustments. The above provisions of this Section 14.9 shall similarly apply to successive consolidations, mergers, conveyances, sales, transfers or leases. Notice of the execution of such a supplemental indenture shall be given by the Company to the Holder of each Security of a series that is convertible into Common Stock of the Company as provided in Section 1.6 promptly upon such execution. Neither the Trustee nor any conversion agent, if any, shall be under any responsibility to determine the correctness of any provisions contained in any such supplemental indenture relating either to the kind or amount of shares of stock or other 

 

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securities or property or cash receivable by Holders of Securities of a series convertible into Common Stock of the Company upon the conversion of their Securities after any such consolidation, merger, conveyance, transfer, sale or lease or to any such adjustment, but may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, an Opinion of Counsel with respect thereto, which the Company shall cause to be furnished to the Trustee upon request.

	
SECTION 14.10.  
 	
DUTIES OF TRUSTEE REGARDING CONVERSION.
 

Neither the Trustee nor any conversion agent shall at any time be under any duty or responsibility to any Holder of Securities of any series that is convertible into Common Stock of the Company to determine whether any facts exist which may require any adjustment of the conversion price, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, whether herein or in any supplemental indenture, any resolutions of the Board of Directors or written instrument executed by one or more officers of the Company provided to be employed in making the same. Neither the Trustee nor any conversion agent shall be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock of the Company, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Securities and
neither the Trustee nor any conversion agent makes any representation with respect thereto. Subject to the provisions of Section 6.1, neither the Trustee nor any conversion agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of its Common Stock or stock certificates or other securities or property upon the surrender of any Security for the purpose of conversion or to comply with any of the covenants of the Company contained in this Article 14 or in the applicable supplemental indenture, resolutions of the Board of Directors or written instrument executed by one or more duly authorized officers of the Company.

	
SECTION 14.11.  
 	
REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.
 

Any funds which at any time shall have been deposited by the Company or on its behalf with the Trustee or any other paying agent for the purpose of paying the principal of, and premium, if any, and interest, if any, on any of the Securities (including, but not limited to, funds deposited for the sinking fund referred to in Article 12 hereof and funds deposited pursuant to Article 13 hereof) and which shall not be required for such purposes because of the conversion of such Securities as provided in this Article 14 shall after such conversion be repaid to the Company by the Trustee upon the Company’s written request.

[The remainder of this page is intentionally left blank.]

 

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

ENERGY CONVERSION DEVICES, INC.

	
By:
 	
/s/
 
	
 
 	
Name:
 
	
 
 	
Title:
 

 

THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee

	
By:
 	
/s/
 
	
 
 	
Name:  Benita A. Vaughn
 
	
 
 	
Title:  Vice President
 

 

 

 

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